Treasury Won’t Alter Operations If Budget Talks Fail, Wolin Says

The U.S. Treasury Department has told its employees that they shouldn’t expect day-to-day operations to be disrupted even if the government fails to reach accord on a plan to avoid across-the board spending cuts.

Deputy Treasury Secretary Neal Wolin sent a message to Treasury employees, including Internal Revenue Service workers, telling them that the so-called sequestration would lead to no immediate changes, such as furloughs. If the government is forced to operate with reduced funding for an extended period, furloughs or other actions might be considered, he said.

“If such action proves to be necessary, we would provide affected employees the requisite advance notice,” Wolin said in the e-mail. “We would also immediately cancel any scheduled personnel actions should a deficit reduction agreement be reached that restores our agency funding.”

The government moved closer to going over the so-called fiscal cliff yesterday after House Speaker John Boehner scrapped a plan to allow higher tax rates on annual income above $1 million. Boehner, an Ohio Republican, had been negotiating with President Barack Obama in an effort to avoid automatic spending cuts and tax increases that would take effect after Dec. 31.

To contact the reporters on this story: Cheyenne Hopkins at Chopkins19@bloomberg.net;

To contact the editor responsible for this story: Maura Reynolds at mreynolds34@bloomberg.net

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