Budget Plan Could Drive Agency Decisions Hiring, Separation Incentive

The White House budget plan, set to be released soon, typically describes government management initiatives to be pursued, along with recommending funding levels for entire agencies and programs within them. It also typically includes projections of employment that, while not binding pending the final outcome of the congressional budget process, indicate the direction the White House wants.

For the upcoming budget, that direction almost certainly will be down. A preliminary budget released earlier projected specific employment numbers only for the EPA–a planned job cut of 20 percent there–while the larger document likely will project cuts at many others, although apparently of a lower magnitude.

The administration already has separately ordered a government-wide plan to restructure agencies and programs while reducing the federal workforce. Preliminary versions of those plans are due to OMB at the end of June.

In anticipation of planned budgetary cuts, agencies including EPA and State have continued general hiring freezes even though the government-wide freeze has been lifted. But even some agencies that stand to come out in better shape are continuing to restrict hiring. These include the TSA, part of DHS, which is hiring only for front-line positions, and the VA, which says it will hire into administrative positions only on a very restricted basis (most of the VA’s workforce, involved in health care, had been excluded even from the broader freeze).

Release of the budget could trigger more agencies to continue or impose their own hiring restrictions, which shift more work to current employees and limit their promotional potential. Federal unions meanwhile remain on the lookout for increased use of contractors to make up for the loss of in-house capability, although the largest department, DoD, recently banned that practice.

Also being watched closely is the potential for an increase in buyout and early retirement offers. The administration so far has been neutral on use of those incentives, although OPM recently put out a guide on how to use them, and OMB guidance on the reorganization promised that agency requests for such authority would get prompt consideration.

The EPA so far is the only agency to have announced buyout and early retirement offers, although State reportedly is set to announce its own and there is a general expectation that others will follow.