With Congress inching closer to a budget deal, federal employee unions are turning up the heat on lawmakers not to increase the amount feds contribute to their retirement as part of the compromise.
Once again, the American Federation of Government Employees and National Treasury Employees Union are saying enough is enough with the attempts to find savings on the backs of federal employees.
Colleen Kelley, the president of NTEU, said the union sent a letter this week to all 10 members of the conference committee requesting they not reduce employee compensation as a replacement for sequestration.
“Only a very small portion of sequestration funding levels are likely to be replaced, which would mean federal employees would likely continue to face more unpaid furlough days and a resulting loss of pay in both 2014 and 2015,” Kelley said during a call with reporters Thursday. “In addition to that, cuts to federal compensation and negative impacts on both federal and Postal employees could account for 25 to 50 percent of the entire amount of these spending cuts that are under consideration to replace sequestration. I think that is outrageous and totally unacceptable.”
Kelley added federal employees and retirees already have faced a three-year pay freeze, which saved or helped the government avoid spending $99 billion.
Additionally, Congress passed and the President signed into a law a bill in February 2012 that requires employees hired after Dec. 31, 2012, to contribute 3.1 percent, or 2.1 percent more than other feds, to their retirement benefits. Kelley said that change saved or helped the government avoid spending another $15 billion. She said employees have been part of a total of $114 billion in savings or cost avoidance over the last three years.
Congress is only considering making changes to one part of federal employees’ retirement package. Under the Federal Employees Retirement System, the main plan for employees hired since 1986, employees are also required to contribute part of their salaries to Social Security and to their Thrift Savings Plan accounts. The FERS defined-benefit pension only makes up between 34-44 percent of a retiree’s full benefits package, depending on years of service.
Legislative language still a mystery
J. David Cox, the national president of AFGE, said the union hasn’t seen the actual language yet and, based on a recent conversation with Rep. Nancy Pelosi (D- Calif.), the minority leader, is not sure what’s in and what’s out.
“We’ve been working very hard with Majority Leader [Harry] Reid and Sen. [Patty] Murray and [Wednesday night] I did a tele-townhall meeting with all of our membership in Washington and Nevada and encouraged them to call and share their concerns about any increases in federal employee pension contributions,” Cox said. “The House is pushing this and at the same token I believe we have a lot of friends in the Senate. It was a big package deal when the President proposed it. It is now being narrowed down where everything falls on the backs of federal employees.”
The unions are trying to get ahead of the curve in protesting against possible cuts and drumming up support across the Congress and public.
The conference committee, led by Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D- Wash.), both chairmen of their respective budget committee, hasn’t made public its exact plans.
“Congressman Ryan, Senator Murray, and their staffs remain in communication with each other,” said a spokesman for Ryan. “Ryan is committed to finding common ground. He hopes both parties can work together to cut spending in a smarter way. They are making progress.”
An email to Murray’s office seeking comment was not returned.
Murray and Ryan are focusing on a potential pact that leaves politically toxic proposals such as taxes off the table, and instead focuses on less controversial proposals left over from prior budget rounds.
Aides following the talks Thursday say any agreement is likely to include the increased airline ticket fee, a proposal to require both military and civilian federal workers to contribute more to their pensions, and higher premiums on companies whose pension plans are insured by the government. Hospitals that treat a “disproportionate share” of people without medical insurance could see their Medicaid payments trimmed, and the government may be able to squeeze a few billion dollars from leases of government-controlled electromagnetic spectrum.
Additionally, just this week Reps. Jim Bridenstine (R-Okla.) and Doug Lamborn (R- Colo.) introduced a bill that would add an additional 0.4 percent to employees’ contribution a year starting in 2014 and going through 2016, for a total of a 1.2 percent increase. The bill also would require the use of a chained consumer price index to determine the cost of living increase.
Looking under seat cushions for money
Union officials say Congress needs to stop coming back to federal employee pay and benefits to scrounge for money during these tight budget times.
But at least one expert says that’s unlikely.
Andrew Biggs, a resident scholar at the American Enterprise Institute, who studies public sector pay and benefits issues, said it’s not surprising lawmakers keep coming back to tap federal employees’ benefits for money.
“I don’t see this as a vindictive move. I see this as a sign that the federal government really needs money,” Biggs said. “They’re not going to be getting much money out of federal employees in terms of the big picture of the budget deficit. This shows they are scrambling to get cash wherever they can.”
Biggs added federal employee retirement benefits are a great deal for the employees. He said the benefits need to be brought more in line with the private sector and state and local governments.
“The Congressional Budget Office found federal employees’ retirement package, of a defined benefit pension, a defined contribution 401k plan and retiree healthcare, is worth about three times as much as a typical private sector worker can get,” Biggs said. “You could make that plan a little less generous without you making it not competitive with the private sector.”
Additionally, he said state and local government employees pay about 6 percent of their wages toward their retirement, so federal employees going up by 2 percent wouldn’t be a huge burden.
Biggs said the notion that most federal employees haven’t gotten raises in three years is not necessarily true. He said many have received step increases and promotions that came with raises.
But AFGE and NTEU claimed raising their contributions would be seen as a pay cut across the board because more would come from their checks each month.
Both unions have been canvassing the Hill and meeting with members to both stop this latest attempt and educate lawmakers about why this is a bad idea.
NTEU’s Kelley said these issues continue to bubble up to the top because the elected officials have the power to make all the decisions about the future of federal employees, which makes it an easy one.
“The repeal of the Budget Control Act is not just an underlying issue in all of this, but it ends up driving the criticality of this discussion every six months. That has been an added layer on to the discussion that always takes place anyways,” she said. “The bottom line is Republicans keep drawing lines in the sand and will be reckless and will go to a government shutdown if this can’t be resolved. We need Democrats to make sure that they speak out against that. These can’t be side-on-side conversations. These have to be very public commitments and confirmations of where the members of Congress stand on this for members of the American public and for federal employees.”
Local lawmakers vow to push back
Several Democrats have spoken up. Minority Whip Steny Hoyer (D-Md.) released a statement saying he “vehemently opposes efforts to target and single out these hardworking, middle-class Americans who play a critical role in maintaining the safety, security, and well-being of our nation.”
Reps. Gerry Connolly (D-Va.) and Jim Moran (D-Va.) released a joint statement as well, saying, “Congress must find a budget deal that protects federal employees, removes sequester level spending caps, and finally acknowledges the value of federal service.”
Republicans with large federal employee constituencies also have started to speak out.
Rep. Frank Wolf (R-Va.) wrote a letter to the members of the budget committee asking them to stop picking on federal employees. Wolf said he can’t support a budget agreement that asks the federal workforce to once again disproportionately feel the brunt of the cuts.