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Sequester: DoD to Start Civilian Furloughs

Today, the Department of Defense (DoD) will begin implementing civilian furloughs to 650,000 civilian employees at installations across the country. The furloughs amount to a 20 percent cut in pay over the next three months. This means most furloughed employees face one day without pay for each week through the end of September.

Initially, the Pentagon projected that civilian employees would need to take 22 furlough days to meet its sequester targets. However, Secretary of Defense Hagel announced in May that the number would be reduced to 11 days.

Many federal agencies have managed to avoid furloughs and layoffs, but the DoD decided it could not meet the mandated cuts without them. The furloughs are projected to save approximately $1.8 billion

While furloughed, workers are prohibited from performing any work-related assignments while away from their jobs.

The furloughs could bolster the arguments of workers and lawmakers who oppose sequestration, tipping the scales against the automatic cuts. Or they could roll out with a whimper, further solidifying the cuts as a long-term fiscal reality for the Pentagon.

In other defense news, the Senate is beginning to focus on how the department will proceed in the next fiscal year.

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Congress Back to Work this Week

Congress returns today after a weeklong recess period to begin a four-week work schedule leading into the August recess. The next four weeks will focus largely on FY14 spending bills. But this week the Senate Democrats will certainly attempt to reverse an interest rate hike on federal student loans that kicked in July 1st and House Republicans will launch multiple inquiries into the Obama administration’s July 2nd decision to delay the part of the health-care law requiring employers with 50 or more full-time workers to pay a penalty if they do not offer health insurance. Prepare for a lot of partisan messaging coming out of these two issues. Continue reading “Congress Back to Work this Week”

Federally Subsidized Student Loan Rates Double Today

Congress adjourned last week for the 4th of July recess without passing legislation to halt the rise of student loan interest rates. That means that today the interest rate on Federally Subsidized student loans doubles from 3.4% to 6.8%. The rate hike is expected to affect 7 million students and will add an average of $3,000 on a $23,000 loan over the 10-year repayment period.

Senate Reports Student Loan Progress

Senate Democrats, Republicans and the White House are reporting progress in negotiations to a student loan interest rate fix. A group of Democratic senators, including Jack Reed RI), Joe Manchin III (WV), and Elizabeth Warren of Massachusetts, along with independent Angus King (ME), have been conferring with Senate Republicans over the past 24 hours.

The plan, which is broadly based on the president’s budget proposal, may be finalized as soon as this week, according to one of the principal negotiators. All that is known at this time is that the proposal calls for shifting from the current 3.4 percent fixed interest rate to a market-driven variable interest rate. While the White House, including Education Secretary Arne Duncan and chief economic advisor Gene Sperling, have been kept in the loop about the negotiations, there is no word that the Senate is talking to the House.

Meanwhile, the House continues to debate both the Farm Bill and an abortion measure.

 

House Proceeds on Farm Bill as White House Threatens Veto

The House will begin consideration of the Farm Bill (HR 1947) today and finish consideration on Thursday. While the House Rules Committee is still determining which amendments will be made in order, 220 amendments have been submitted to the Rules Committee.The House Rules Committee has proceeded with a rare two day consideration of the rule to determine which amendments should be made in order. The bulk of these amendments pertain to the SNAP program.

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