Sequester scenarios: $100 million in funding cuts at ORNL, furloughs at Y-12

Operating costs have already been cut by 7 percent at Oak Ridge National Laboratory, and all employees are expected to report to work on Friday, even if automatic federal spending cuts go into effect at midnight.

The federal cuts could reduce lab funding by 5 percent to 8 percent, ORNL Director Thom Mason said. That could translate into $70 million to $100 million in funding cuts, depending upon how the reductions are allocated.

Meanwhile, at the Y-12 National Security Complex, the automatic spending cuts could lead to furloughs, or temporary layoffs. Democrats on the U.S. House Appropriations Committee have said between 700 and 1,000 employees could be furloughed for up to six months.

But in a Feb. 14 message to employees, B&W Y-12 General Manager Chuck Spencer did not say how many employees might be affected.

“Should funding reductions become necessary, we will make every effort to minimize the impact to you while safely and securely meeting as many of our mission commitments as possible,” Spencer said. “One of those impacts could be a furlough, which is essentially mandatory time off work without pay. Clearly, we hope a furlough will not be needed, but if it is, a likely scenario for most employees would be a reduced work schedule.”

House Democrats said furloughs would not begin immediately on March 1, if they happen, because employees must generally be given at least 30 days’ notice for furloughs lasting 22 or fewer workdays and 60 days’ notice for more than 22 days of furlough.

Although he didn’t provide specifics, Spencer said Y-12 is working to determine what work could be performed with reduced funding.

“I want to stress that this is just an exercise; we don’t know whether we will be required to implement cuts,” he said.

Also known as sequestration, the spending cuts were approved in the Budget Control Act of 2011. They were meant to encourage compromise on deficit reduction efforts. The sequestration includes $1.2 trillion in automatic discretionary spending cuts over the next 10 years, including $85 billion in the fiscal year that ends Sept. 30. The cuts were scheduled to go into effect at the start of the year, but Congress delayed them.

Spencer said B&W Y-12 has already taken actions to diminish the potential effects by limiting, for example, procurements, travel, and hiring.

Mason has previously said ORNL is as well-prepared as it can be. He sounded a similar message in internal ORNL blog posts this month, saying the lab has reduced costs through workforce restructuring, changes in benefits, reductions in energy consumption, and operational improvements.

“As I’ve shared in recent months, the work we’ve done to reduce operating costs by 7 percent will help a great deal should funding cuts come,” Mason said. “Based on preliminary information from the (U.S. Department of Energy) Office of Science, we don’t anticipate dramatic lab-wide impacts this fiscal year, but until various DOE programs determine how to apportion reductions, it’s impossible to predict effects with certainty. In addition, we will need to be prepared for the enduring impacts of sequestration in 2014 and beyond.”

If more reductions are needed, the lab could temporarily suspend training and travel, limit procurements, and delay staff hiring.

“But no matter where sequestration ends up, come March 1, we’ll all report to work,” Mason said. “We’ll continue to operate as safely and efficiently as possible, and to focus resources on our scientific missions.”

Mason said the potential $70 million to $100 million in cuts at ORNL will be “somewhat mitigated by the fact programs have held back funding during the continuing resolution currently funding the government.”

Despite the high-stakes political debate in the nation’s capital, Mason and Spencer hope employees concentrate on their work.

“The political climate right now offers potential for a lot of distraction, but our goal remains to allow you to focus on your work,” Mason said.

The DOE Oak Ridge Office referred questions about its operations to the DOE Public Affairs Office in Washington, D.C. A representative there did not return a phone call seeking comment Wednesday afternoon.

U.S. Sen. Lamar Alexander has scheduled a teleconference with reporters this afternoon to discuss the sequester, and President Barack Obama is scheduled to meet with top congressional leaders tomorrow to talk about ways to avoid the fallout of the spending cuts, which could affect everything from military readiness and international affairs to schools and the economy.

It’s not clear if Democrats and Republicans will reach a last-minute deal, as they have in previous fiscal crises.