Thursday, December 20, 2012

Easing over the Fiscal Cliff

So far, the only victim of the fiscal cliff is Speaker Boehner, whose Republican House refused to support him on his "Plan B." Even they saw the phoniness of it. But it does seem that the secret tea party plan to destroy the Republican Party is working just fine.

Today, we got a memo by email about the fiscal cliff and possible effects on the Department of the Interior. I don't see any problem in sharing it here as it appears to be a public document and the Press has the Department of Defense memo which says essentially the same thing.

December 20, 2012
To: All Department of the Interior Employees
From: David J. Hayes /s/
Deputy Secretary
Subject: Implications of Ongoing Fiscal Cliff Negotiations
As you are likely aware, the Administration and Congress are continuing to work to resolve a series of economic or fiscal events, collectively referred to as the “fiscal cliff,” that are scheduled to occur around the end of the year. One of the key issues involves potential across-the-board reductions in Federal spending— also known as “sequestration”—which were put in place by the Budget Control Act of 2011. Under current law, these reductions are scheduled to take effect on January 2, 2013. Many of you have raised questions regarding the impact of a potential sequestration for the Department of the Interior and its bureaus and offices, and I would like to take a moment to clarify a few things.
First and foremost, it is important to keep in mind that the Administration remains focused on working with Congress to reach agreement on a balanced deficit reduction plan that avoids such cuts. Sequestration was never intended to be implemented, and there is no reason why both sides should not be able to come together and prevent this scenario.
Nevertheless, with only a couple of weeks left before sequestration could occur, should a deal not be reached, it is important to clarify the potential implications. Let me start by explaining what sequestration is and what it is not. Sequestration is an across-the-board reduction in budgetary resources for all accounts within the Department of the Interior that have not been exempted by Congress. If it occurs, sequestration will reduce our budgetary resources for the remainder of the fiscal year (which runs through September 30, 2013). These cuts, while significant and harmful to our collective mission as an agency, would not necessarily require immediate reductions in spending. Under sequestration, we would still have funds available after January 2, but our overall funding for the remainder of the year would be reduced. Accordingly, this situation is different from other scenarios we have encountered in recent years, such as threats of Government shutdown due to a lapse in appropriations.

For these reasons, I do not expect our day-to-day operations to change dramatically on or immediately after January 2, should sequestration occur. This means that we will not be executing any immediate personnel actions, such as furloughs, on that date. Should we have to operate under reduced funding levels for an extended period of time, we may have to consider furloughs or other actions in the future. Let me assure you that we will carefully examine other options to reduce costs within the agency before taking such action, taking into consideration our obligation to execute our core mission. Moreover, if such action proves to be necessary, we would provide affected employees the requisite advance notice before a furlough or other personnel action would occur. We would also immediately cancel any scheduled personnel actions should a deficit reduction agreement be reached that restores our agency funding.
If you have unanswered questions or wish to discuss issues surrounding the potential sequestration, I encourage you to reach out to your bureau/office budget officer. And I will do my very best to provide clear information about the status of events as they unfold.

Finally, on behalf of the President, Secretary Salazar, and the entire leadership team, I want to express our gratitude during this holiday season for your continued hard work and dedication to the vital mission of the Department of the Interior. Your contributions touch people’s lives in many significant ways, and we want you to know how deeply appreciative we are for all that
you do.
The federal government, as the 500 pound gorilla in the room, I guess better stated as the one that can pre-empt the states and has a Constitutional Supremacy Clause, will figure out ways to keep going for some time. Well, at least the Executive which has a Treasury. The Congress may be floundering around for yet awhile. 

Here is where it gets interesting. With Congress's continued failures, the markets and economic powers that be will react and lobby to get the problem solved. And then there's the states. I imagine that unlike the usual pattern when we get the public's attention by shutting down the infamous "non-essential" aspects of government (as in, yours truly), it won't be the Washington Monument shuttered, but the risk of all the federal treasury checks to the states that they need under the laws of federal pre-emption and supremacy. The state governors, Republican and Democratic alike, will be all over the Congress.

The President still holds all the cards. He's playing a winning hand. And the Republican Party will break because it has no option but to violate its "modern" principles and raise taxes on somebody. Let's hope they catch the spirit of Teddy Roosevelt for the good of the Country and raise them on those who have benefited the most from our great American Nation as a step forward to the more perfect Union to ensure domestic Tranquility and provide for the general Welfare.

[Check my caveats again, I do not speak for the United States, the President, the Executive Branch or the Department of the Interior. These are my personal opinions in my private capacity only.]

(Later, same night)

To be fair, you only could have predicted this House vote situation if you were awake at some point in the last two years.

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