Shutdowns, Furloughs, COLAs, Congress and the 2008 Pay Raise

Congress has gone home even though the Senate says it is still technically open for business. While they may enjoy their time away from DC, their departure leaves open the possibility of furloughs in DoD, funding for most federal agencies still up in the air and uncertainty about the 2008 pay raise for current federal employees. Retirees are set though. Enjoy your holiday.

Congress has left the building.

Federal employees are still working this week though–unless they are taking annual leave–with the exception of Thanksgiving day. Anyone trying to find government employees at work on Friday may have to wait until next week though as the halls of federal buildings will look quite empty as it seems that many people think using a day of leave to have a four-day weekend is an efficient way to get the best use of annual leave. It is not usually a big problem as many businesses close for the day after Thanksgiving anyway.

But, while Congress has left town, the Senate is still in session. No doubt most Americans will be impressed that the august body is still hard at work.

In reality, the Senate is closed. But, to protect its bureaucratic prerogatives, Senate Majority Leader Harry Reid has declared that the Senate will consider itself to be working in Washington anyway. The reason is to prevent his enemy and leader of the evil Republicans, George Bush, from making recess appointments while those elected to America’s legislative branch go home for a couple of weeks.

So, while Congress decides to take off for a couple of weeks, does anyone care? Unfortunately, their timing for this particular vacation (rather, home district working sessions) leaves most of America in the lurch. That may be one reason why the approval rating for Congress is down under 20 percent in recent polls.

Many readers probably would have liked to have seen a resolution to the budget stalemate. No one knows how much money most agencies will have to spend during the rest of the fiscal year. The current continuing resolution expires on December 14th. It is possible there will be a budget passed by then but probably more likely that the stalemate will still be on-going. 11 appropriations bills are still pending. It is possible there will be an omnibus bill or another continuing resolution but nothing will happen until the legislators decide to go back to work.

The 2008 federal pay raise is tied to the budget stalemate. It is likely that the final raise will be 3.5% but no one can guarantee the final outcome. Don’t plan on spending the money untll the dispute is over–it could go on for awhile.

There seems to be, at the moment at least, a consensus that there will not be a government shutdown. But there is concern about furloughs as the Secretary of Defense says it may be necessary to furough as many as 200,000 federal employees and contractors. Those siding with the Republicans paint the Democrats as not caring about the troops fighting in hot spots around the world and putting our military at risk while they try to satisfy the far left supporters who provide campaign money and want to see us pull out of Iraq quickly. Those siding with the Democrats think the Pentagon is bluffing and there is money available so there is no danger to our troops overseas and that not approving the budget is a good political move to force the withdrawal of troops from Iraq.

DoD Secretary Robert Gates says furloughs would be “the least undesirable” of the limited options if the military runs out of money. The Defense Department would begin laying off nonuniformed defense workers, effectively shutting down all Army bases by February. The system for furloughing federal employees requires a 60-day advance notice that a furlough may be coming. Presumably, this will be enough time to allow you to start saving money since you may not get a paycheck for a few days, weeks or months while the issue gets resolved.

The politcal interests of the politicians debating the issue are probably of little concern to those with a son or daughter serving our country in Iraq or Afghanistan. It is a good bet that the parents of the soldiers would rather have seen Congress give up going home for a couple of weeks and, instead, stay in Washington and finish the job most people think they were elected to do–and to make sure what we can to ensure the safety of those we have sent overseas to protect America.

Some readers may wonder about the difference between a government shutdown and a government furlough. The reality is that there isn’t much of a practical difference if you are the one told you are not an essential federal employee and to stay home because there is no budget for your agency (a shutdown) or if you are told to stay home because there is not enough money to pay for your services (a furlough).

I am not aware of any large-scale shutdown or furlough in which the people impacted did not get paid for the time they were sent home. Usually, it amounts to a free vacation with different types of stress than the usual vacation. You don’t have to go to work and, after the shouting is over and the last press release has been filed, everyone goes back to work and gets paid for the time they were sent home.

But, if you are the person who is furloughed or sent home, it can be an uncomfortable feeling of uncertainty but unlikely to be a traumatic experience. During the last government shutdown, it seemed like many in Uncle Sam’s civilian army used the time to go shopping in the local malls as Christmas was coming, they had not purchased Christmas gifts yet, and felt fairly certain their pay would be forthcoming eventually. Their confidence was justified and things quickly went back to normal.

COLA Increase

What about federal retirees and the COLA increase?

Federal retirees will be getting a 2.3 percent increase. While some readers refer to their annual “COLA increase,” the reality is that the federal pay raise is determined through the political process. The annual cost of living increase for retirees is determined through a formula based on statistics from the Department of Labor. Those under the FERS system will be getting a smaller increase but the stalemate and the political battle in Washington won’t impact your retirement check.

Welcome to our annual holiday season and the usual political disputes. Be sure to give thanks for all of our many blessings on Thanksgiving Day. Just don’t plan on spending any of your next pay raise until you actually have the money in your account.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47