July 9 (Bloomberg) -- Furloughs of the U.S. military’s civilian workers that began yesterday will show their effects as the week goes on, from elimination of Saturday hours at a base pharmacy in Washington state to a potential slowdown in repairs on Patriot missile interceptors in Pennsylvania.
Months after Pentagon officials began warning that the automatic spending cuts called sequestration would force unpaid leave, the rolling furloughs started for 85 percent of its civilian workforce.
While most of those affected are in the U.S., the cuts will require that workers on American bases abroad take time off as well, from 8,394 civilian employees of the Army and Air Force in Germany to a single Navy worker in Ghana, according to a Defense Department report.
“Our core mission is to defend the American people and U.S. national security interests,” Pentagon spokesman George Little told reporters at the Pentagon yesterday. “It’s not going to be easy” under the reductions, which will be staggered over each two-week pay period.
The move will cost as many as 651,542 employees 11 days’ pay through Sept. 30, according to Pentagon figures. The goal is to generate $1.8 billion of the $37 billion in reductions the Pentagon must come up with in the current fiscal year under the cuts.
The cuts include 72,000 civilian defense workers facing furloughs in Virginia, the hardest-hit state, according to the Pentagon report released last week. Virginia is home to the Pentagon and major naval and Defense Department installations.
Representative Gerry Connolly, a Democrat who represents Virginia suburbs of Washington with a high concentration of defense workers, said the furloughs will make it hard to recruit replacements for the 47 percent of the federal workforce eligible for retirement by the end of the decade.
“How are you going to replace them?” Connolly said in an interview. “Can you go on college campuses and talk about a career in federal service, which may mean you get 20 percent pay cut and disruption?”
For investors and analysts of defense stocks, “a minor unknown” is how furloughs will affect the award and oversight of defense contracts for the remainder of the year, said industry analyst Byron Callan.
“It’s an issue that analysts will be drilling down on when defense companies report” earnings this month, Callan, director of Capital Alpha Partners LLC in Washington, said in an e-mail.
The forced leave also is hurting production at some government facilities, according to Bill Dougan, president of the Washington-based National Federation of Federal Employees.
At the Letterkenny Army Depot in Chambersburg, Pennsylvania, work on Patriot anti-missile interceptors is being slowed and “that could have a direct impact on military readiness,” Dougan said in an interview.
Letterkenny is responsible for repairing and resetting Army equipment including the Patriots, route-clearance vehicles, and power-generation equipment, Lindsay Bryant, a spokeswoman for the depot, said in a phone interview.
Even with people taking one day a week off for furloughs, the “workload is there, so getting it done in the same time frame is a challenge,” she said.
At Joint Base Lewis-McChord near Seattle, the base posted a series of office and service closings on its website. The outpatient pharmacy at the Madigan Army Medical Center on the base will be closed on Saturdays and customers were warned that they also may experience longer waits due to reduced staff.
In the base’s military personnel division, the pass and identification office, retirement services, and soldier readiness center will be closed on Fridays.
Altogether, about 16,000 Army, Air Force and Navy civilian employees face furloughs in Washington state, according to Pentagon figures.
At MacDill Air Force Base in Tampa, Florida, Colonel Scott DeThomas, commander of the 6th Air Mobility Wing, said furloughs will affect everything from family services to maintenance and flying operations, according to the Tampa Bay Times.
The 72,000 workers placed on furlough in Virginia will lose a combined $237 million in wages, according to Pentagon data. California will see about 57,000 civilian workers furloughed at a cost to them of about $189 million, followed by Texas with 45,000 workers idled with losses of $149 million, according to the data.
Maryland, Georgia, Florida, Alabama, Ohio, Oklahoma and Pennsylvania fill out the ranks of the 10 states set to experience the biggest furlough effects.
The National Federation of Federal Employees, one of the oldest unions representing U.S. workers, has started a Fight the Furloughs campaign. It’s intended to “gain Congress’s attention and action” to avoid further furloughs throughout government, Dougan said.
The average federal worker earns $25,000 to $75,000 a year, and a 20 percent cut in pay hurts the ability to pay routine bills and meet home mortgage payments, Dougan said.
“A lot of them are not higher-grade employees, and a lot of folks are living paycheck to paycheck,” he said. “Forcing them to sit at home is bad for the country and bad for the economy.”
For the Pentagon, the group is calling on lawmakers to “grant the Defense Department the flexibility they need to shift funds between accounts, to drastically reduce furloughs or potentially eliminate furloughs.”
While Little said the Pentagon won’t be able to provide day-by-day totals for furloughs, “my assumption is that the vast majority of that population will be on furlough at least one day this week.”
“Make no mistake about it: We’re in a rough period,” said Little, who said he is going on furlough on Fridays starting this week.
Asked about the possibility that a continuation of sequestration next year will require eliminating jobs, Little said that “at this stage we are in the furlough period and no decisions have been reached about what may happen going forward.”
The Pentagon is planning to send Congress a letter as soon as today outlining the impact of the additional $52 billion in sequestration cuts scheduled to take effect when the new fiscal year begins on Oct. 1.
This report is “very important as ideally it will provide more granularity to what has so far been a vague discussion about the fiscal 2014 sequester cut,” Callan said. “At the least, it should show the hits to procurement and research and development and ideally will highlight specific program impacts.”
To contact the editor responsible for this story: John Walcott at email@example.com