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Federal Eye
Posted at 03:09 PM ET, 04/05/2011

GOP budget plan freezes federal pay through 2015

The budget outline unveiled Tuesday by House Republicans seeks to freeze federal salary schedules through 2015, reduces the federal workforce by 10 percent, and requires employees to pay more toward their retirement benefits.

The document, an early step in writing a federal budget for the fiscal year that begins Oct. 1, further seeks to reduce spending on non-security agencies to the levels of 2008, while accepting savings the Pentagon has proposed in its budget.

“The federal government’s responsibilities are dependent on a strong federal workforce. Federal workers deserve to be compensated for their important work but pay levels, pay increases and benefit packages need to be reformed to be in line with the private-sector,” says the report released by House Budget Committee chairman Rep. Paul Ryan (R-Wis.).

The report says the government has added 155,000 federal employees since the Obama administration took office and cites data that average wages in the federal workforce “far eclipse” those of the private sector. Ryan’s estimates on the growth of the federal workforce fall between official government statistics and White House budget estimates.

Congress and the White House agreed last year to freeze federal salary schedules for 2011 and 2012, although certain forms of raises remain allowed, including those based on performance and “within-grade” raises that are based primarily on longevity. Some members of the House have said they would like to prevent those types of increases as well.

A modified hiring freeze under the budget plan would allow federal agencies to hire only one new employee for every three federal workers who retire, which the report says would cut the workforce by a tenth by 2014 through a “gradual, sensible attrition policy.”

Ryan’s freeze proposal is consistent with other GOP proposals that go beyond Obama’s National Bipartisan Fiscal Commission, which recommended replacing every three departures from the federal workforce with two new workers.

Government officials and federal employee organizations have challenged both the pay and jobs figures when similar numbers and arguments were raised in the recent past. They argue that official government data show that federal employees on average are substantially behind comparable private-sector jobs in salary, in part due to the more senior and more professional nature of government work, and that jobs numbers vary according to how employment is counted and in part reflect decisions made during the Bush administration.

Ryan’s proposal also would require federal employees to share equally with the government the cost of their retirement benefits, a proposal mirroring one made by the fiscal commission. It mentions a “Federal Employee Pension Plan” to which employees contribute 0.8 percent of their salaries. That apparently is a reference to the Federal Employees Retirement System, in which employees pay that contribution, along with the standard Social Security contribution paid by most American workers.

There is a separate federal retirement system called the Civil Service Retirement System. Employees under that system pay 7 percent of salary but do not get Social Security coverage. It was unclear from the document whether the proposal would affect both systems.

According to Congressional Research Service figures, requiring an equal split between enrollees and the government would require increasing the employee share by about 6 percent of salary under each system.

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RELATED: Full Coverage of the 2012 budget debate

By and  |  03:09 PM ET, 04/05/2011

Categories:  Budget, Congress, Workplace Issues

 
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