FEDweek

Buyout Amount Boost May Not Open Floodgates

Legislation (S-1888) pending a committee vote in the Senate to increase the buyout maximum to $40,000 government-wide would not necessarily spur agencies to increase the numbers of offers they make. The bill would not change the policy that–subject to OPM approval–agencies have wide discretion over whether to offer the incentives, to which categories of employees, and when.

OMB has encouraged agencies to use buyout authority–as well as early retirement offers, which commonly are offered in tandem–for downsizing or reorganization purposes. However, so far this year only the EPA has made a substantial number of offers, while the Interior Department has said it has a request for the authority pending at OPM.

Another issue is whether agencies could afford to pay the higher amount, since a main reason for making the offers is as a response to a tight budget, or at least the prospect of one. Offering buyouts makes the most sense for agencies early in a fiscal year, since they would have time to recoup the up-front costs within that same budget year by not filling the vacancy created–or by restructuring so that the departed employee is replaced by one making substantially less.

However, agencies currently are being funded largely at fiscal 2017 levels (which were set during the Obama administration) through December 8, with budget amounts for the remainder of the fiscal year that started October 1 still uncertain. There is no guarantee that budgets for the full year will be settled even in December–another temporary extension, at least for some agencies, is one possible outcome–and even after a topline budget is approved for an agency, it takes time for the potential impact on staffing to be decided. Also, agency funding levels advancing in Congress to date are generally above the administration’s proposals.

For the meantime, some agencies are continuing to restrict hiring, which creates vacancies in positions that can later be abolished just as buyout offers would.

Further, since agencies could pay up to the maximum at their discretion, the result might be a patchwork of differing amounts among agencies.