Feds concerned with pay, pensions and health premiums will be closely monitoring the outline President Obama is scheduled to present today for consideration by the bipartisan joint Congressional supercommittee.
The Joint Select Committee on Deficit Reduction — its formal name — is supposed to come up with a number of spending and program cuts by Thanksgiving. Then, if the script is followed, the House and Senate will vote, sometime in December, up-or-down on some or all of the proposals. Democratic and GOP leaders in Congress have urged the committee (setup something like the Base Realignment and Closure committee a decade ago) to be bold in proposing fixes that will be unpopular with many groups.
Federal workers have already been hit with a two-year federal pay freeze, which official bean-counters say will save the government (and therefore mean a loss of wages) $60 billion over the next 10 years. President Obama proposed the freeze in lieu of the three-year freeze the Bowles-Simpson panel recommended. There are strong hints that freeze might be extended at least another year. And possibly for three more years.
So what’s at stake, and what are the odds?
Your guess is as good as (or in some cases probably a lot better) than mine. But here’s what may be on the menu:
Adopting a new system, called the chained COLA, to measure and set inflation-triggered cost of living adjustments for retirees. Currently those January adjustments are tied to the consumer price index. Although retirees have not had a COLA in two years, critics say the CPI system overestimates inflation. They argue that using a different yardstick would take into account spending adjustments people make in hard times (like now) and produce a truer estimate of costs. Bottom line, going to the chained COLA would reduce, by some estimates, future inflation-adjustments by half a percentage point, or more. Net effect would be smaller raises in future for federal, military retirees and people who get Social Security benefits. Reducing Social Security increases even a small amount each year would rack of billions of dollars in future savings. Estimated saving over 20 years is $100 billion.
Require federal workers — those working now and those hired in future — to contribute significantly more toward their own retirement. Increases would apply to those under the CSRS and FERS programs. In addition to saving the Treasury money down the road, the impact would be an immediate (and permanent) reduction in take-home pay for federal and postal workers. In one version, FERS employees (who now contribute .8 percent of pay) would have that increased to as much as 6 percent over the next several years. CSRS employees who now contribute between 7 and 8 percent would have to kick in as much as 12 percent under one plan. That would mean a substantial and permanent reduction in take-home pay.
Introduce a sort of voucher system which either would give feds-postals-retirees a fixed amount of money to purchase health insurance or require them to pay a larger share of the plan’s total premium each year. Currently nonpostal federal workers pay about 30 percent of the total premium. Under the voucher-like system the amount they pay would go to 50 percent or more. Again a major reduction in take home pay as health premiums (as they do almost every year) go up more more than the actual rate of inflation.
The Federal-Postal Coalition, a coalition of 30-plus union and management groups, has been lobbying the White House not to propose, endorse or buy into any plans to have feds make further sacrifices, beyond the already-in-place two-year pay freeze. Most of the unions in the coalition endorsed President Obama. They had high hopes that pay and benefits would improve and that upwards of 150,000 “inherently governmental” federal jobs in the private sector would be returned to the civil service fold.
But all that has changed. Majority Republicans in the House have made it clear they would like a smaller, less expensive government which in some cases is code for bureaucrats-are-evil. Today people will find out how far the White House is prepared to go to cut the deficit.
And at whose expense?
NEARLY USELESS FACTOID
Wired magazine reports that seagulls may be contributing to the problem of antibiotic-resistant bacteria. How? By pooping — that’s a scientific term — such resistant bacteria along beaches.