DOE letter raises questions
Politics > Are the impacts of sequestration real or just a bunch of hype?

By John Severance
Saturday, March 9, 2013 at 8:00 pm (Updated: March 10, 8:49 am)

The Department of Energy’s Daniel Poneman recently sent Gov. Susana Martinez a letter regarding how the state would be affected by the sequestration order.

Was it just a bunch of hype? Or are their dire consequences ahead?

It’s hard to tell.

Poneman estimated that reductions to contractors are estimated at $67 million and contractors may be forced to furlough or lay off more than 8,200 employees in New Mexico.

As far as Los Alamos National Laboratory is concerned, Poneman wrote that DOE would decrease funding to the lab by approximately $61 million. He also said that could result in the furlough or layoffs of another 8,200 employees.

Poneman also said there would be decreased funding to the Waste Isolation Pilot Plant in Carlsbad, which would decrease the number of radioactive waste shipments.

The Governor’s office, meanwhile, responded to the DOE letter Saturday.

“Governor (Susana) Martinez believes we, as New Mexicans, must put aside partisan differences and fight to protect ourselves from indiscriminate federal cuts,” the statement said.

Martinez recently met with the National Nuclear Security Administration (NNSA) while in Washington to discuss funding for Los Alamos and Sandia, and her staff has met dozens of times with the agency’s leaders since she took office. She has met with New Mexico’s Congressional delegation on various issues and they are committed to working together.

There are some, however, who believe Poneman went overboard in his letter.

“This logically-challenged letter exaggerates and obscures rather than reveals the nature, magnitude, and timing of possible sequestration impacts,” Los Alamos Study Group director Greg Mello said. “Its purpose appears to be to hype the impacts of sequestration in order to generate dire headlines and political capital for the administration.  It reflects badly on the Department of Energy and on Dan Poneman, who signed it.  

It states that as a result of the sequester, DOE contractors will “furlough or lay off more than 8,200 employees” in the state.  Furloughs are quite variable, and certainly not commensurate with layoffs —so why are these lumped together?  

“More than 8,200” is an open interval and doesn’t commit to any particular number even as an estimate.  So what does this mean — anything?  On top of that, the ‘8,200’ figure is used to describe the whole state in one place and Los Alamos National Laboratory in another.”

The lab, meanwhile, says it is business as usual.

“It would be inappropriate for the laboratory to answer questions regarding a letter from the Department of Energy to the Governor of New Mexico. From our perspective, little has changed in our preparations and planning for sequestration impacts since the Laboratory Director informed all employees of our position in a February 13, 2013 memo,” LANL Spokesman Kevin Roark said.

In that memo, McMillan said workforce reduction was not a viable option in dealing with sequestration impacts.

McMillan said at the time that should sequestration occur, the lab would look at four main levers to reduce costs including:
•Further controlling procurements
• Examining the subcontracted labor force
• Effectively using carryover balances, and
• Furlough of the permanent workforce for a short duration.

In Washington, meanwhile, the House of Representatives passed a measure 267-151 that would continue to fund most Department of Energy programs, including cleanup work, at Fiscal Year 2012 levels for the remainder of the current fiscal year. The measure extends a Continuing Resolution that would last until September. Sequestration cuts, though, remain a part of the Continuing Resolution.

Rep. Ben Ray Luján (D-N.M.) voted against the continuing resolution that included the sequestration cuts.

“The Department of Energy has warned that it estimates $67 million in reductions to the department’s contractors in New Mexico is expected, as well as $61 million in cuts to funding for contractors at Los Alamos National Lab.

“The vote on the Continuing Resolution today provided the House with an opportunity to offer a balanced solution to address this manufactured crisis. Unfortunately, the Republican bill locks in the steep cuts for the rest of the fiscal year that will deliver a blow to New Mexico’s economy while impacting many small businesses that contract with the national labs and families that rely on federal funding for vital services.”

This isn’t the first time that a government entity has been accused of crying wolf by a watchdog group.

A couple of weeks ago, the Regional Coalition of LANL Communities issued a press statement supporting a state House memorial that “recognizes the critical importance of New Mexico’s National Laboratories and DOE facilities to the state’s economic welfare and the dramatic negative effects that sequestration will have on New Mexico’s economy.” Its statement also “recognizes that Northern New Mexico is highly dependent on federal spending in the area of nuclear technology and sequestration may cause tens of thousands of New Mexicans to lose their jobs through direct and indirect job losses at Los Alamos National Laboratory.”

Nuclear Watch New Mexico took exception to the coalition’s statement.

The watchdog group points out that specific impacts of the sequester are nearly impossible to pinpoint in advance, but if general cuts of 10 percent to military programs are applied to the number of LANL employees and subcontractors and indirect jobs then there would be a loss of about 2,000 positions."