Business as usual at the lab

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Sequestration > McMillan still waiting on budget numbers

By John Severance

Los Alamos National Laboratory Director Charlie McMillan reiterated it will be business as usual as automatic budget cuts to planned spending increases are expected to take effect.

McMillan has said previously that the actions the lab took in 2012 to control spending has given it some flexibility to deal with budget uncertainties in 2013.

Here is the text of McMillan’s memo that was sent to employees Thursday.

“We are now hours away from March 1, the day federal budget cuts are scheduled to take effect in an action called “sequestration,” and I wanted to keep you posted on where things stand here at Los Alamos.

“We will be in business as usual here tomorrow and next week. I will be at work and you should plan to be as well. What remains uncertain is the final budget reduction numbers to each NNSA site. Once those numbers are shared with us, we will know which one or combination of options will make the most sense for the laboratory.

“I remain convinced that a reduction of the permanent workforce here is not viable. However, further reductions in purchasing and subcontracts, use of carryover funds, and — as a last resort — short-term furloughs remain on the table.

“As I have said in past messages, the actions we all have taken to control costs and spending over the past 16 months were in preparation for the funding reductions we have already seen and the uncertainty to follow. We’ve been told to expect further guidance from NNSA next week. As that comes in, I will update you.”

At a community leaders breakfast last year, McMillan outlined the lab budget cuts. McMillan said the lab finished 2012 with $383 million less in funding than 2011. The 2011 reductions include $183 million for operations and maintenance and $200 million for construction.

In addition, McMillan said the lab finished 2012 with 1,295 fewer employees than in the previous year.

Of the 1,295 employees that left the lab, 557 departed under the voluntary separation program last spring.
McMillan said other the other numbers could be attributed to contactor cuts, normal attrition and slightly fewer students.

McMillan said procurements are down by close to $200 million from FY 11. In September of last year, the lab racked up $894 million in procurements compared to $696 million in FY12.

So what will happen if the full impact of sequestration takes effect?

According to the Nuclear Weapons and Materials Monitor, the cuts, which may be implemented in March barring action by Congress, are set to reduce the National Nuclear Security Administration’s budget by 7.3 percent. That adds up to about $721 million for NNSA’s weapons and nonproliferation programs, based on enacted funding levels.

Meanwhile in Washington, President Barack Obama met with congressional leaders at the White House Friday, hours before a series of mandatory budget cuts start to kick in, for intense talks where Democrats and Republicans were most likely to stake out fiscal positions with the threat of a government shutdown looming.

With no expectations of a breakthrough, Obama was to once again argue for a big fiscal deal that would raise taxes and trim billions from expensive and ever-growing entitlement programs. But with automatic federal spending cuts ready to start taking their toll, the path toward that grand bargain Obama campaigned on last year has significantly narrowed.

“I’m happy to discuss other ideas to keep our commitment to reducing Washington spending at today’s meeting,” Senate Minority Leader Mitch McConnell, R-Ky., said in a statement ahead of the session. “But there will be no last-minute, back-room deal and absolutely no agreement to increase taxes.”

For Obama, Friday’s session would be his first opportunity to spell out his 10-year, $1.5 trillion deficit reduction plan in a face-to-face meeting with congressional allies and adversaries.

His chances are squeezed by anti-tax conservatives, by liberals unwilling to cut into Medicare and Social Security, and by a Republican leadership that has dug in against any new revenue after ceding to Obama’s demands two months ago for a higher tax rate for top income earners.

Associated Press contributed to this story.