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Defense employees frustrated by furloughs

DefenseUnemployment and LayoffsFinance

Mary Theresa Nipwoda, a lab technician at Aberdeen Proving Ground, did what she could to prepare for the 20 percent pay cut she knew was coming this week.

The Harford County woman, who earns about $67,000 annually, switched her prescription medications to generic drugs once it became clear Congress was not going to roll back the $85 billion in federal budget cuts known as sequestration. She skipped a AAA membership for her car.

Nipwoda, one of tens of thousands of Defense Department employees in Maryland who began taking unpaid leave this week, is prepared. But she's no less frustrated.

"I'll make it through," said Nipwoda, 58, who is also a steward with the National Federation of Federal Employees. "But it's one of those things where I go to church and pray, 'Dear God, please don't let anything else break.'"

Some 45,000 civilian employees in Maryland are to be furloughed one day for each of the next 11 weeks to help the Pentagon save $37 billion as required under the controversial spending cuts that began in March. The furloughs will continue through the end of the fiscal year in September.

The pay cuts, which will hit as many as 650,000 military employees nationwide, are one of the first tangible impacts from sequestration to reach Maryland, and analysts believe they will almost certainly have some effect on the economy.

Despite dire warnings from the Obama administration that sequestration would spin the nation into a second recession, economists now believe the impact has been small. Some federal parks, including Baltimore's Fort McHenry, have cut hours to deal with leaner budgets. The Blue Angels canceled their show at the Naval Academy graduation this year.

But there has been little in the way of wide-ranging economic impact to date, even in Maryland, which is home to some 300,000 federal workers. Most federal agencies with a large presence here, including the Social Security Administration in Woodlawn and the National Institutes of Health in Bethesda, have managed to avoid furloughs altogether.

And that is partly why economists are watching the Defense furloughs closely. As required under their contracts, employees received notice last month.

Uniformed military personnel are exempt from furloughs, but a broad swath of support staff, from base security to scientists, will be affected. And the reductions will be felt at every military facility in Maryland, including as many as 27,000 employees at Fort Meade, about 4,900 at Fort Detrick and 2,400 at the Walter Reed National Military Medical Center, according to Sen. Ben Cardin's office.

"The furloughs will not only affect civilian employees, but also will hurt local businesses, restaurants and gas stations that will have less customers as DoD civilians and their families stretch to make ends meet," Cardin, a Maryland Democrat, said in a statement.

"A 20 percent cut in pay is drastic and takes a toll on individual employees, their families and communities," he said.

The furloughs, which have been expected for months, are the latest cuts to hit a department already challenged by the sequester.

At Fort Meade, commanders have chosen to spend their diminished funds on programs and services that affect the health and safety of service members, civilian employees and their families before addressing maintenance and repairs at the World War I-era base in Anne Arundel County.

"I'm not going to say the cup is half-full, because reality is that this does present some very significant challenges for personnel and for the community," said Col. Edward Rothstein, the commander of Fort Meade. "But it's also been a catalyst for bringing folks together and focusing on our priorities."

With more than 52,000 military and civilian workers at the National Security Agency, U.S. Cyber Command, the Defense Information Systems Agency and other organizations, Fort Meade is the largest employer in the state. As furloughs approached, Rothstein directed the base newspaper to produce a special section offering advice to affected employees. The insert lists agencies on the base and in the surrounding counties to which workers may turn for help with finances, housing, education and stress.

Rothstein has been talking with fellow commanders and workers about furloughs since March.

"Expectation management is critical," he said.

George Matthews oversees the program at Fort Meade that prepares soldiers for life after the military — a role in which he's used to giving financial advice.

Furloughs have now forced the 59-year-old Glen Burnie man to do some extra planning of his own.

"Instead of being spread over a year, we're looking at a 20 percent pay cut over a short period of time," he said. "It creates an economic difficulty."

In his case, he said, the immediate challenge is the tuition bill for his son, an undergraduate at the University of North Carolina at Greensboro.

"He's studying abroad right now, so it's not like he's making any money this summer," he said. "And in August, he goes back to school on the George Matthews Scholarship Plan."

Economist Anirban Basu said the statewide economic impact of sequestration has been difficult to assess because cuts have been phased in over time and the economy has slowly improved despite the reductions.

"To date, the impacts of sequestration are hardly visible in the data," said Basu, head of Sage Policy Group, a Baltimore economic and policy consulting firm.

But when it comes to the furloughs and other expected future reductions, he added, "all of our models would suggest that this would have a pretty significant impact on the local economy."

Sequestration is the result of the messy 2011 agreement to raise the nation's debt ceiling — the amount of money Congress allows the administration to borrow.

In return for raising the limit, lawmakers scheduled budget cuts that were designed to be so painful that Republicans and Democrats would agree to a deficit-reduction deal to avoid them.

But that never happened.

Congress has tweaked some of the more onerous restrictions — giving more flexibility to the Department of Transportation to avoid furloughs of air traffic controllers, for instance. The Pentagon initially contemplated 22 furlough days, but Defense Secretary Chuck Hagel said in May that the number would be cut in half.

There is little indication lawmakers will undo the cuts in the next fiscal year. Democrats, led by Senate Appropriations Committee Chairwoman Barbara A. Mikulski of Maryland, are pushing to erase the cuts as they craft next year's spending bills.

But many Republicans view the cuts as a critical tool in reducing budget deficits.

Lawmakers may have to consider raising the debt ceiling again this year.

The Federal Employee Education and Assistance Fund, a nonprofit created in 1986 to help federal employees through natural disasters and personal emergencies, is expecting a spike in requests for assistance this month. The organization has so far made 106 loans to families hit hardest by furloughs, said Robyn Kehoe, director of field operations.

The group has made loans worth $5,900 in Maryland, she said.

For John Statham, a 44-year-old biomedical technician at Aberdeen, the pay cut won't be dire — though Statham believes tax withholding will pull his actual check down by more than 20 percent.

The Halethorpe man, also an NFFE steward, said he anticipated the cuts a long time ago and made adjustments such as paying off his car loan rather than going out to dinner. Statham said he is concerned, though, about younger employees who were unable to make those choices.

"I was trying to get the jump on this," he said. "When I actually start getting those lower checks — when they do come — I'm going to be able to cover my bills."

Matthews says sequestration and furloughs have also taken another kind of toll. Family and friends who know he works for the Defense Department keep asking how he has been affected, and he's grown tired of talking about it.

"When you've been involved in a car crash, the thing you want to have happen is for the whole thing to go away," he said. "After you tell that story a couple of times, you say, 'Hey, guys, I've had enough.'

"I don't want to tell it over and over."

john.fritze@baltsun.com

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matthew.brown@baltsun.com

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Copyright © 2014, The Baltimore Sun
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