According to some interpretations of the Mayan calendar, our days are numbered.
My dry cleaner, who is usually right about these things, says starting in December, he’s only taking next-day orders. And I will have to pay in advance. Doesn’t look good.
But for federal and postal workers the big bang could come a lot sooner. Like Feb. 29. That’s when the payroll tax deal — along with the extension of unemployment benefits — will end, unless Congress and the White House keep them running. To do that, they would have to come up with a combination of savings and new revenue sources, which is where you come in:
House-Senate conferees are expected to approve the extensions — which all-up-for-reelection politicians favor (or better favor) if they want to keep their jobs. But continuing the reduction in the Social Security payroll tax, and extending unemployment benefits until 2013 will cost a lot.
House members of the conference committee have a solution:
Freeze your pay for another year, and
Increase the percentage you kick into the FERS and CSRS retirement funds each paycheck.
Eliminate the FERS minimum supplement currently paid to employees who retire before age 62 and are eligible for Social Security.
The conference committee is made up of eight Republicans and five Democrats.
The House has already approved the proposals. It was pretty much a party line vote with most Republicans voting for the changes and most (but not all) Democrats against them. Rep. Frank Wolf (R-Va.) broke ranks with his party and voted against the proposals.
If approved, the changes would go into effect in 2013. For employees under the FERS program, their contributions to the retirement fund would go from 0.8 percent of salary at present to 4 percent in three years. For those under the CSRS program, contributions would go from 7 percent to 8.5 percent of salary over a three-year period.
Retirement benefits for current FERS and CSRS employees would continue to be based on the high-three formula. But for those hired after Dec. 31, 2012, annuities would be based on their highest five-year average salary.
Eliminating the FERS supplement, as proposed in the House plan, would not apply to firefighters, law enforcement personnnel, air traffic controllers and others whose jobs have a mandatory retirement age that is less than 62.
So what are the odds any or all of this will happen? After all, feds feared (rightly so) the end of their pay and benefits world several times last year. And nothing happened.
The difference, some insiders say, is that this is an election year, so something’s got to give. Politico, the insiders inside journal, yesterday speculated that the payroll deal may happen fast and easily. Some insiders feel that the White House will go along with major portions of the GOP plan to preserve the payroll tax break.
Today at 10 a.m., on our Your Turn radio show, Colleen M. Kelley, president of the National Treasury Employees Union will talk about the various threats facings feds and what — if anything — can be done to block or minimize them.
At 10:30 a.m.,Sean Reilly and Andy Medici from the Federal Times will also analyze the situation from another angle, and talk about the president’s proposed reorganization of financially-oriented federal agencies. The show is live at 10 a.m. EST. You can listen via your computer or, in the D.C. area, by old-fashioned radio at 1500 AM. Questions or comments? E-mail me at: firstname.lastname@example.org
In the 1975 Steven Spielberg thriller, “Jaws,” three shark models, each seven yards long, brought the title character to life. The shark models were actually dubbed “Bruce” after Spielberg’s lawyer.
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