Customs & Border Protection Shifted $7M From Border Fence to Salaries

    As sequestration bore down in February 2013, the threat of furloughs for thousands of government workers was a common refrain from those warning of the dire effects of the across the board budget cuts.  Janet Napolitano, then-director of the Department of Homeland Security (DHS) told Rep. Bennie Thompson in a letter that sequestration could force her department to idle law enforcement personnel for up to 14 days.  As it turned out, DHS did not furlough any personnel, but rather relied on cuts to other areas and shifting funds from other budgets to cover salaries.  For instance, Customs and Border Protection (CBP) shifted $7 million from its Border Security Fencing account to Salaries and Expenses.
    The details are spelled out in a new wide-ranging report by the Government Accountability Office (GAO) on how 23 different agencies and their various departments handled sequestration.  The CBP's actions were explained as follows:

DHS reported that 7 of its 15 components planned up to 22 furlough days for employees in 2013. For example, in February 2013, DHS's Customs and Border Protection (CBP) notified employees of the possibility of 14 furlough days, but ultimately required no furlough days. According to agency officials, CBP was able to avert furloughs in part because the agency transferred $7 million from its Border Security Fencing Infrastructure and Technology accounts to its Salaries and Expenses account and reprogrammed at least $69 million between various PPAs within the Salaries and Expenses account.

    DHS was not alone in avoiding furloughs.  Of the 23 agencies reviewed in the GAO report, only seven ended up utilizing furloughs to achieve the needed cuts, affecting about 770,000 employees from 1 to 7 days.  The Department of Defense (DOD) reported the lion's share of the furloughs, accounting for 88%, or $1.2 billion, of the dollars saved by the federal government via furloughs.  Of the 774,366 workers impacted by furloughs, 82% worked for the DOD.
    Overall, furloughing employees was one of the least utilized means of achieving the cuts required by sequestration.  The report detailed the more common methods: "19 agencies reported curtailing hiring; 16 reported rescoping or delaying contracts or grants for core mission activities; 19 reported reducing employee training; and 20 reported reducing employee travel."
    The GAO produced an infographic as part of its report, which includes this summary of the primary methods that agencies used to cut the $80.5 billion that was ultimately required:

    The GAO recommended that agencies publish the criteria used to determine how sequestration was implemented and how exemptions were determined, and also how the principles used to make decisions in 2013 could be applied to future sequestrations should the occasion arise.


Note: A version of this post first appeared at The Weekly Standard.

Syriaquestration: Governing by Hobson's Choice

    On Wednesday, I posited the following on Twitter:

Asking Congress for Syria authorization seems like foreign policy version of #sequestration. Obama admin can't *Imagine* Congress won't act.
— Jeryl Bier (@SpeakWithAuthor) September 4, 2013

    Thursday, James Taranto, in his Best of the Web column, also reflected on the president's actions regarding Congress and the authorization vote:

If we take Obama and Kerry at their word, then the president did not even consider the possibility that Congress would reject his request. Given the haste in which he made the decision and the desultoriness of his own effort to make the case for the request, that is a plausible reading of what happened. 

Failing to consider this contingency would be a stunning failure of planning... 

The other possibility is that Obama did not regard approval as a sure thing but figured that he'd win either way--that if Republicans balked, he could blame them for inaction in Syria, and if they went along with intervention, they'd share the blame for anything that went wrong...

    Taranto's take, which I excerpted here, is worth reading in full (almost invariably the case,) and I believe it supports my Syriaquestration thweesis (as long as I am coining words, why not two?)  The president and his spokespersons have often said that the sequestration, which the White House has only grudgingly acknowledged the president's role in proposing, was purposely designed to be so bad that no one would allow it to kick in.  As the country learned this spring, the president miscalculated.  Congress did not blink and the sequestration took effect.  The time-release poison pill was apparently not strong enough to kill opposition to the president's taxing and spending priorities.  So far, consequences of the sequester have been mixed, better or worse depending on which party is asked.
    Now the president has thrown down the gauntlet again, apparently not considering the possibility that Congress might pass on picking it up.  Or that Congress would pick it up, depending how you read the president's challenge.  That possibility has quickly almost become a fait accompli with many observers saying the president might not only lose on the Syria authorization vote, but lose "big", according to a Thursday night Politico report.  Whatever the president's reason or reasons for passing the buck to Congress, he may come to regret it.  Even if he was initially hoping Congress would vote down his proposal to get him off the hook for his "red line" remark, he and his subordinates in the last few days have portrayed the consequences of no military response as so dire that anything short of a disaster in Syria after a no vote would seriously damage the credibility of the administration.
    While there are similarities between the sequestration and Syriaquestration, and whatever harm has come from the former, the consequences of the latter are likely to be far worse, whatever the outcome of the current debate in Congress.  The president may learn too late that Hobson's Choice politics is a dangerous game, and the people of Syria, the entire Middle East, and the United States may all end up paying a high price for his ill-advised gamble.

Sequestration: Federal Court-Appointed Attorneys Face $15/Hour Cut

    If last week's announcement by the IRS that corporate tax credits were the latest victim of sequestration didn't garner much sympathy, then an even smaller violin might be needed for this week's victim: lawyers.  As of September 1, court-appointed panel attorneys for the federal defender program will be hit with a $15/hour reduction in compensation.  The following announcement appeared Monday on the United States Courts website:

In an emergency move to preserve Federal Defender staffing in FY 2014, the Executive Committee of the Judicial Conference of the United States has reduced hourly rates for court-appointed panel attorneys by $15 an hour. Payments to panel attorneys for up to four weeks of work done in FY 2014 will be deferred to FY 2015. An Aug. 16 letter described the moves as temporary and undesirable, but said they "are necessary to avoid permanent damage to the federal defender program."

    In the letter explaining the decision, the Executive Committee of the Judicial Conference raised concerns that the move could "impact the delivery of justice":

In taking these measures, the Executive Committee shares your view that reducing panel attorney compensation rates, deferring panel attorney payments, and limiting federal defender organization funding to the maintenance of current on-board staff are undesirable, and may impact the delivery of justice, but are necessary to avoid permanent damage to the federal defender program.  Measures of this kind, however, are not sustainable in the long term, and certainly would not be required if the judiciary were receiving an appropriate level of funding in this account.  The Committee nonetheless remains committed to the goal of ensuring that the defender program can operate within its annual appropriations.  With that in mind, we will continue to monitor developments and intend to revisit the matter when, in our opinion, events warrant.

    Currently, the maximum hourly rate in such cases is $125.  The $15/hour cut reduces the maximum back to 2010 levels.  The maximum rate in capital cases is $178/hour.


Note: A version of this article first appeared at The Weekly Standard.

Latest Sequestration Victim: Corporate Tax Credits

    Sequestration has been blamed for everything from cancelled White House tours to military cutbacks that threaten national security to government worker furloughs.  The latest victim of sequestration might have a more difficult time garnering sympathy, however: corporate tax credits.  The Internal Revenue Service has just announced that for corporate tax returns filed or amended on or after August 13, 2013, the "refundable portion of the credit for prior year minimum tax liability" will be cut by 38%. The announcement was made on the IRS website under the heading "Effect of Sequestration on the Alternative Minimum Tax Credit for Corporations":

The Balanced Budget and Emergency Deficit Reduction Act of 1985, as amended, requires certain spending cuts during Fiscal Year 2013 due to the sequester triggered earlier this year. These required cuts reduce the refundable portion of the credit for prior year minimum tax liability made to corporations, which will be effective for original or amended tax returns beginning August 13, 2013.  As a result, the refundable portion of these credits will be reduced by 38 percent.  The sequestration reduction rate will be applied until the end of fiscal year (September 30, 2013) at which time the sequestration rate is subject to change depending on congressional action. 

A corporation that can claim an additional first-year depreciation deduction under section 168(k) can choose instead to accelerate the use of its prior year minimum tax credits, treating the accelerated credits as refundable credits.  Corporations making this section 168(k)(4) election and claiming a refund of prior year minimum tax credits should complete Form 8827.  These corporations will be notified that a portion of their requested refund was subject to the sequester reduction. 

Corporations making the section 168(k)(4) election but not claiming a refund of prior year minimum tax credits are not subject to this reduction. 

Note: A version of this article first appeared at The Weekly Standard. 

Defense Dept. Urges Furloughed Workers to Use ‘Free or Low-Cost’ Recreation During Time Off [TWS]

    While furloughs of civilian employees of the defense department have not lived up to the pre-sequester billing, the Pentagon is doing what it can to ease the pain for those who will be taking involuntary time off.  The American Forces Press Service is reporting that the director of the Pentagon's Morale, Welfare and Recreation (WMR) program is urging furloughed civilians to tap into "fitness, recreational and educational services, often at no charge or for significantly less than one might pay just outside an installation’s gates."  The list of "free or low-cost" offerings is extensive:

A common access card gives DOD civilian employees access to free or low-cost use of base fitness centers, swimming pools, libraries, movie theaters, bowling alleys, clubs, arts-and-craft centers, auto repair shops, golf courses, campgrounds, shooting ranges, beaches and marinas. 

Depending on the location, DOD civilians also can rent camping, boating, snorkeling, skiing and other outdoor gear at their base outdoor recreation office. They can visit the installation tickets and tours office to buy discount tickets to civilian movie theaters, theme parks and travel and tour packages. 

Some civilian employees may not realize they’re also qualified to rent the recreational campgrounds, cabins, cottages, trailers and trailer or recreational vehicle parks with hook-ups found on many military installations.

    There is even access to resorts that the article refers to as the "crown jewels" of the program:

That extends to the crown jewels of the MWR program: Armed Forces Recreation Center resorts at popular vacation spots. All run by the Army but open to military and civilian employees from every service, these include Shades of Green on the grounds of Walt Disney World in Orlando, Fla.; the Hale Koa in Honolulu; the Edelweiss Lodge and Resort in Garmisch, Germany; and the Dragon Hill Lodge in Seoul, South Korea. 

The Navy runs a similar resort-type facility, the New Sanno Hotel, in Tokyo. In addition, the Air Force has a partnership with Keystone Resort, Colo., to offer discounts at Rocky Mountain Blue, with a variety of lodging options and recreational discounts.

    The WMR director said it's too early to say whether or not DOD civilians are utilizing the program more since sequestration, but he expects an increase due to the low cost and convenience.  He speculated that the WMR program may soon be subject to cost-cutting, but that in the meantime, civilian employees should "make the most of the furlough situation."

“MWR is here for them,” he said. “There’s no better time than now to check out what’s available.”

Note: A version of this article appeared first at The Weekly Standard. 

For $221k, July 4th Fireworks Show on National Mall in Washington Will Go On

    The show will go on.  Sequestration may have cost Washington D.C. tourists a chance to tour the White House, but the Independence Day fireworks will go off as planned.  A contract was awarded today to Garden State Fireworks of Millington, NJ for $221,819.77.  The listing for bids on the typically business-like fbo.gov website contained this somewhat colorful solicitation:

Provide supervision, labor, materials, supplies and equipment necessary to present an innovative, bounteous, dynamic and attractive fireworks display for Independence Day on the Grounds of the Washington Monument, Washington, D.C. on July 4, 2013.

    The National Park Service that puts on the fireworks show each year offers several suggestions for enjoying the show which is scheduled to begin at 9:10 on the evening of the 4th:

• Consider wearing hearing protection. These fireworks are BIG and LOUD.
• Consider wearing eye protection to protect yourself from falling debris.
• Consider not bringing pets.

Note: This article first appeared at The Weekly Standard.

Veterans Administration Spends $378K on Signs for Civil War-Era Cemeteries

    Last week, a contract totaling more than $378,000 was awarded to develop and manufacture signs for Civil War-era cemeteries, including "18 unique interpretive signs for Confederate lots."  The contract was awarded by Department of Veterans Affairs (VA).

    The "interpretive signs" provide context and analysis of the information presented as opposed to strictly informational or directional signs.

    In the original solicitation for bids, the project is described this way:

The scope of work for this project includes, but is not limited to providing all labor, material and design services needed to analyze and distill into one to three interpretive signs to be placed in 79 Civil War-era National Cemeteries and 24 other NCA-managed cemeteries. The purpose of this contract is to procure one generic interpretive sign for 79 National Cemeteries and 18 unique interpretive signs for Confederate lots; with up to 90 unique interpretive signs for the same National Cemeteries. The content of generic interpretive signs to be produced has been developed in draft by NCA; the content for the other signage to be produced will require research, development and design by the contractor.

    Care of the cemeteries falls under the National Cemetery Administration, which is a division of the VA.

    The Department of Veterans Affairs (VA) largely escaped the automatic budget cuts, widely known as sequestration, that hit in March. As the Washington Post reported at the time, a bipartisan consensus spared the VA's $140 billion budget from the legislation.

    The new signage may relate to the Civil War Sesquicentennial, which runs from 2011 through 2015.


Note: This article first appeared at The Weekly Standard.

In Spite of Sequester: $63K for Russian Walrus Skin Biopsies

    While Vice President Biden's limo and hotel costs certainly attracted a lot of attention a few weeks ago after my Weekly Standard posts, those expenses arguably served national security purposes.  But while Drudge is currently headlining "Bagpipes for Homeland Security," my current personal favorite sequester-busting government spending example involves the Fish and Wildlife Service's latest contract award:

    Although the description is a little different, the bid solicitation a few months back explained a little more about the need to sample the skin of the large marine mammal:

The U.S. Fish and Wildlife Service has a requirement procuring all necessary permits and working with our Russian partners to coordinate all Russian logistics associated with conducting a biopsy sampling program in the Bering and Chukchi Sea in the spring and summer of 2013.

    I'm not a marine biologist so I do not know how large a sample is taken from a walrus for a biopsy.  But it's a safe bet that most taxpayers won't believe a pound of flesh from a walrus is worth a pound of theirs.

U.S. Embassy in Macedonia Hosts Fashion Show

    Last week, the US Embassy in Macedonia hosted a fashion show "with a goal of supporting Macedonia’s economic development, the fashion and textile sectors, and youth entrepreneurship." While the continuing sequester had White House Press Secretary Jay Carney speculating that the "damage" done by the sequester might not be immediately known, that "damage" will apparently not include the Macedonian fashion scene.  According to the Washington Post, the sequester cut the State Department's diplomatic functions by $650 million.  However, the day after Carney's comment, the US Embassy put on the fashion show for the second year in a row.  Called “POP! Fashion”, the show was held on a runway constructed in the atrium of the embassy building:

Ambassador Wohlers opened the “Pop! Fashion” fashion show yesterday as part of Skopje Fashion Weekend. Government ministers, donors, and invited guests from the business, fashion, textile, and media communities attended the event that was hosted in the Embassy Atrium. Working with Fashion Weekend Skopje, the Embassy selected a mix of fifteen established and new designers from thirty two applications, with a goal of supporting Macedonia’s economic development, the fashion and textile sectors, and youth entrepreneurship.

The embassy's Facebook page included numerous photos of the event:

    The local Macedonian Information Agency reported on the event as well, providing some additional photos of the fashions on display.

    An email to the embassy inquiring about the cost of the event was not immediately returned.


Note: The article first appeared at The Weekly Standard.

Feds Sign $6M Helicopter Contract for 'Wild Horse and Burro' Program

    As the sequester bore down on Washington, the dire warnings from the Obama administration gave the impression that wild horses couldn't drag another dime out of the treasury for a whole host of vital government services.  Aircraft carrier refueling, the Head Start program, and White House tours were among the high profile victims.  However, as it turned out, wild horses, with a little help from burros, managed to drag $6,000,000 out of the taxpayers' wallets for Helicopter Flight Services two weeks after the sequester went into effect.  The same government website that posted the contracts for Vice President Biden's London and Paris hotel costs and Paris limo costs has the details:

    Related documents show that the purpose of the contract is to provide

on call helicopter flight services to support transportation of personnel and/or cargo in support of natural resource missions along with other administrative and related activities as directed by the Government in support of the Wild Horse and Burro (WHB).

When asked for clarification on the contract, Joshua Carter of the Interior Department replied via email:

The contract awarded to Skyhawk Helicopter Services is an indefinite delivery indefinite quantity type contract, which means that while the Government knows they will need these services at some point over the course of the next year, we don't know exactly when we'll need them nor do we know exactly how much of the service.  Actual services will be ordered via the issuance of task orders for specific amounts and timeframe.  The $6M figure is the contract ceiling meaning that the total of all orders issued over the life of the contract will not exceed $6M.  So while the contract is considered a $6M contract, the likelihood of the actual workload reaching that amount is minimal.

    According to a Bureau of Land Management budget document, a total of $76,758,000 was included for the National Wild Horse and Burro Program in the Fiscal Year 2012 continuing resolution passed by Congress and signed by the president.

    Days after the sequester took effect, a two-day Wild Horse & Burro Advisory Board Meeting was held at the Sheraton Oklahoma City Hotel in Oklahoma and included discussions on Population Growth Suppression, Ecotourism, and Herd Area Repopulation.

Note: This article first appeared at The Weekly Standard (minus the photo.)

Student Loans and Sequestration: More Devastation?

    The White House has been trumpeting the devastating effects of sequestration for weeks.  Everything from the military to Head Start to White House tours have been cited as victims.  However, some effects are less than disastrous.  For instance, student loans.  Here's a sample letter to prospective recipients of direct student loans from the Department of Education:

Dear <first name of borrower>:

Our records indicate that you either recently received or are scheduled to receive a Direct Loan from the U.S. Department of Education to help meet your educational expenses.  We want to bring to your attention some recent changes in the law that will affect your Direct Subsidized and/or Direct Unsubsidized Loan.  

On August 2, 2011, Congress passed the Budget Control Act of 2011, which put into place automatic federal budget cuts, known as the “sequester.”  While this law does not otherwise change the amount or terms or conditions of your Direct Loan, it does increase loan fees on Direct Subsidized and Direct Unsubsidized Loans first disbursed after March 1, 2013.  Specifically, the fee on your loan will increase from 1.0 percent of your loan amount to 1.051 percent.  For example, the fee on a $5,500 loan will increase by $2.80 from $55.00 to $57.80. 

If you accept the loan that has been or will be disbursed for you, you will be agreeing to this higher fee and there is nothing you need to do at this time.  However, if you wish to cancel or reduce your loan, you may do so by contacting your school’s financial aid office.  Requests for cancellation should be made as soon as possible.  If you have additional questions about your loan, please do not hesitate to contact your school’s financial aid office. 

We wish you good luck in your educational pursuits.

    While $2.80 might not seem like much, the Obama administration made quite a big deal back in the summer of 2012 over saving student loan recipients 25¢ a day, so perhaps the president can spin this as yet another tragic result of the heartless intransigence of Congress.

President Obama Appears to Have Exaggerated Effects of Sequester on 'Head Start'

    In the days leading up to sequestration, President Obama and other administration officials often singled out Head Start as one of the vital programs that would be severely impacted by the automatic spending cuts.  Phrases like "70,000 kids get thrown off of Head Start" and "70,000 young children would be kicked off Head Start" were common refrains.  On Friday, as the sequester went into effect, President Obama himself said:

[F]olks who suddenly -- might have been working all their lives to get an education, just so that they can get that job and get out of welfare and they've got their kid in Head Start, and now, suddenly, that Head Start slot is gone and they're trying to figure out how am I going to keep my job, because I can't afford child care for my kid...

    That same day, the Department of Health and Human Services (HHS) put out a memo to Head Start personnel echoing the same claims, albeit in less dire language:

As you are likely aware, in accordance with the Budget Control Act of 2011, a series of spending cuts, called sequestration, will cancel approximately $85 billion in budgetary resources across the federal government for the remainder of the federal fiscal year.  The President is required to issue a sequestration order today, March 1, resulting in spending reductions of approximately 5 percent for the remainder of the federal fiscal year.  We estimate that approximately 70,000 children will lose access to Head Start services because of this reduction.

    The Obama administration has not released its calculations on how its arrived at the 70,000 figure, but based on past experience, it seems likely that the number is simply an estimate based on the dollars that will not be spent.  However, a look at recent Head State enrollment numbers and budgets calls the assertion into question.

    Just a little over a year ago, HHS issued this memo regarding Head State after President Obama signed the Consolidated Appropriations Act of 2012.

TO: Head Start and Early Head Start Grantees and Delegate Agencies 

SUBJECT: FY 2012 Head Start Funding Increase 

INSTRUCTION:
President Obama signed the Consolidated Appropriations Act of 2012 on December 23, 2011. This Act included the Fiscal Year (FY) 2012 appropriation for programs under the Head Start Act of $7,968,543,933. This represents an increase of approximately $409 million over the FY 2011 appropriation level.

    So the amount budgeted represented an increase of $409 million over the previous year, an increase of approximately 5%.  The bottom line is that the 5% cut by the sequester simply brings head start levels back to where they were a year ago, hardly a doomsday scenario.  And the 70,000 children who will be thrown off Head Start?  According to the Annie E. Casey foundation, an organization that compiles numbers on Head Start enrollment, Head Start enrollment for 2012 totaled 1,128,030.  Enrollment for the year before, 2011, was 1,125,209, a difference of less than 3,000, a far cry from 70,000.

    Obviously these enrollment figures are not unimpeachable and the time periods may not match up precisely, but it would appear ludicrous to say that 70,000 will be kicked off.  Unless the administration can back up its claims with hard data, questions may continue to be raised about the dire consequences being predicted by the president and his officials.


Note: The story first appeared at The Weekly Standard.