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Vilsack: Sequester’s impact is undecided

Associate Editor

KISSIMMEE, Fla. — As he spoke to farmers, their representative organizations and the press Friday at the annual Commodity Classic in Florida, USDA Secretary Tom Vilsack had on his mind the day’s looming deadline for President Barack Obama to sign $85 billion in federal sequestration cuts into law.

One task his department was tackling was responding to a Feb. 26 letter signed by nine Republican senators (including former USDA Secretary Mike Johanns) questioning Vilsack’s recent assertions the sequester will reduce the number of federal meat inspectors.
In the letter, the senators – led by Chuck Grassley of Iowa – said Vilsack’s remarks “suggest you view there is a rigid legal duty to furlough all employees at USDA without concern for USDA’s statutory duties, or for the health and safety of consumers.”

They questioned USDA’s efforts to reduce expenses elsewhere, such as for travel, seminars and operating costs, and on Vilsack’s legal justifications for his comments about reduced meat inspections, asking “why USDA cannot use furloughs in other mission areas in order to keep (Food Safety and Inspection Service) inspectors on the job.”

“They know that the operating budget of USDA, when the sequester goes into effect 11:59 tonight, is less than it was in 2009,” Vilsack said, adding his people were pulling together the legal opinions and numbers necessary to answer by the senators’ March 4 response deadline.

Already looking for savings

He said last year, he asked USDA employees nationwide for suggestions to make the agency more efficient and received 340 recommendations, 100 of those the USDA was already doing to some degree. New ones included looking at offices and labs that could be closed or consolidated to save on rent and utilities, and implementing early retirement and “early separation,” which he said has reduced the workforce by approximately 6,800 people so far, or 8 percent of the agency’s full-time workforce.

Vilsack said USDA also began looking at what it could save by offices collaborating on contracts to buy supplies, instead of making individual purchases, as well as what technological expenses were necessary. And, he said employees have cut supplies, travel and conference expenses.

The sum total of savings so far, he said, is between $700 million-$1 billion. “And, we did this before anyone asked us to do it,” he said, adding the USDA spent “an enormous amount of time” on this problem. And there are still unknowns – such as, if a year’s worth of cuts have to be realized in the seven months until the end of the fiscal year on Sept. 30, this will mean more immediate deeper cuts than if they could be spread out over more months, for example.
“Honestly, instead of writing letters, it would be helpful if Congress would write a bill and get it passed. It’s in their hands to solve this,” he said. “All these problems are manmade; it’s not like a drought.”
Vilsack was referring to the fact the sequester went into effect because Congress didn’t pass any measures to either stop it or specifically allocate the broadly mandated cuts by March 1. The deadline was set in 2011 as agreement between Obama and Congress, to be impetus to federal legislators to agree on deficit-reducing measures – whether that was spending cuts, more taxes paid or a combination of both.

Cuts still to be determined

For USDA alone, Vilsack said he and division leaders still have to decide how the mandated cuts will spread out. Do they apply only to monies not yet paid out, or will some of what’s already been paid out in programs and grants have to be recalled?
As for meat inspectors, “It’s not as if in the inspection area in particular, we can take money from some other mission area and shift it over to food safety so we don’t have to do what we have to do,” he explained. “It’s not as if within the food safety budget we have flexibility.

“Here’s why: Roughly 87 percent of that budget is people who are inspectors and the money that supports the people who are inspectors.”

Another 5 percent, he said, is for operating expenses and the other 8 percent is for people who do the testing and analysis for inspectors and other “backroom work” – people the inspectors need in order to fully do their jobs.

USDA could furlough employees other than these inspectors for 22 days, and he said the inspectors would still face furlough, as well. This week, he added notices about proposed furloughs will be sent to various bargaining groups for inspectors and other federal employees; there is a legal process the agency has to navigate to change the work requirements and pay for such employees.
USDA will also be notifying universities and other grant recipients about what they might expect. Divisions such as the Natural Resources Conservation Service will not be filling vacancies, so Vilsack said producers will likely be seeing effects of the cuts soon. The sequester will likely even affect how long it takes federal employees to finish the Ag Census and compile data.
He said with Congress’ temporary extension of the 2008 farm bill through September, USDA is fully prepared to continue direct payment programs and conduct signups as planned.

While the amount of payments will likely be reduced by the sequester, he said he’s not sure if the cuts will impact whether some producers even receive a payment.

He feels it would be difficult for Congress to “change the game in the middle of the game.” But, he also noted, “I shouldn’t imagine what Congress is going to do.”

In addition to sequester cuts and no new multiyear farm bill yet in place, Vilsack pointed out later this month Congress has yet another financial deadline, from when both chambers agreed Jan. 1 to push back action on the much-discussed “fiscal cliff” from late 2012.

There is a human element to this uncertainty, he said.
He spoke of having to tell a young federal employee last week, when asked if she would still have a job soon, that he honestly didn’t know. He asked his audience to imagine trying to do their individual jobs with that kind of knowledge in the back of their minds.

“But yet, they still do the job,” Vilsack said. “Record farm loans, record conservation acres enrolled, record expansion of bioeconomy, record expansion of local and regional food systems ... I’m really proud of the work they’re doing, but I feel for them right now, because it is very stressful.”