From the U.S. Government Accountability Office, www.gao.gov

Transcript for: Impacts of Fiscal Year 2013 Sequestration 

Description: Audio interview by GAO staff with Michelle Sager, Director,
Strategic Issues

Related GAO Work: GAO-14-244: 2013 Sequestration: Agencies Reduced Some
Services and Investments, While Taking Certain Actions to Mitigate
Effects
 
Released: March 2014

[ Background Music ]

[ Narrator: ] Welcome to GAO's Watchdog Report; your source for news and
information from the U.S. Government Accountability Office. It's
February 2014. On March 1st, 2013, the president ordered an
across-the-board reduction in federal agency budgets, also known as
sequestration. A team led by Michelle Sager, a director in GAO's
Strategic Issues team, recently examined the effects of sequestration on
agency performance and how agencies planned for and implemented the
cuts. GAO's Sarah Kaczmarek sat down with Michelle to talk about what
they found.

[ Sarah Kaczmarek: ] What were the effects of sequestration in 2013?

[ Michelle Sager: ] Sequestration had a wide range of effects on agency
operations, as well as on services to the public. Some of these effects
we know and can measure, while others are more difficult to measure or
simply can't be known. I'll focus on those that we do know about and
these fall into basically three main categories: reductions, delays, and
effects on the federal workforce. So first, with regard to reductions,
these included things such as smaller and fewer grants and vouchers so
things such as Head Start or housing vouchers; decreased amounts of
public assistance provided, and also less oversight and monitoring of
federal funds. Second, there were delays and these covered activities
such as awarding contracts, conducting training, procurement, and also
deferring planned maintenance. And then third, there were effects on the
federal workforce and these included everything from furloughing 770,000
federal employees between 1 and 7 days, to cancelling or limiting
monetary awards, reducing travel and training, and also curtailing
hiring.

[ Sarah Kaczmarek: ] It's been a long time since the last sequestration,
were agencies able to plan and prepare for this?

[ Michelle Sager: ] Agencies were able to eventually plan for
sequestration but this happened in an environment of uncertainty, so all
of the agencies did some planning in 2012 anticipating sequestration,
but their activities were difficult to finalize because of the
considerable uncertainty regarding if and also when sequestration would
actually occur.

[ Sarah Kaczmarek: ] How did agencies end up implementing sequestration
then?

[ Michelle Sager: ] Generally agencies told us they followed two key
principles in implementing sequestration so all of the agencies told us
that one of their priorities was to protect the agency mission and then
about half of the agencies told us that another key priority was
protecting the people that were charged with implementing that mission.
So to follow those two key principles, some of the actions that they
took included transferring and reprogramming using funding flexibilities
to shift funds either between accounts or within accounts. So by doing
these kinds of actions, they had additional flexibility. In addition,
Congress also took some actions that helped mitigate the sequestration;
so for example, they passed a law called the Reducing Flight Delays Act
of 2013 and that gave the Department of Transportation some authority to
transfer funds and they could prevent reduced operations and air traffic
controller furloughs.

[ Sarah Kaczmarek: ] Given the challenges here, what's GAO recommend be
done?

[ Michelle Sager: ] GAO makes two recommendations in this report; both
of these recommendations are intended to help agencies plan and
implement future sequestration, as well as to enhance public
understanding of sequestration, what actually happened, and why certain
decisions were made. So we recommend to OMB that they make publicly
available the criteria they used to determine which accounts were
temporarily sequestered and then we also recommend that OMB direct
agencies to document the decisions they made so that both of these could
be guide post, looking ahead to the future.

[ Sarah Kaczmarek: ] Finally for taxpayers, what's the bottom line here?

[ Michelle Sager: ] The bottom line is sequestration did happen and
agencies did manage to plan, prepare for and implement the
sequestration. However, the short term responses they had to take to
implement sequestration are not a substitute for long-term budget
reduction strategies that are sustainable. And as I mentioned earlier,
although many of the effects are difficult to isolate or identify, there
are known effects, reduced public services, reduced benefits, and then
lost wages for those 770,000 furloughed federal employees.
[ Background Music ]

[ Narrator: ] To learn more visit GAO.gov and be sure to tune in to the
next episode of GAO's Watchdog Report for more from the Congressional
Watchdog, the U.S. Government Accountability Office.