Congressional negotiators put the finishing touches Thursday on a new economic plan worth more than $150 billion that relies in part on forcing new federal employees to pay more for their retirement benefits.
Much of the deal hinged on the support of Sen. Benjamin Cardin (D-Md.) and Rep. Chris Van Hollen (D-Md.), Maryland lawmakers who represent tens of thousands of current and former federal employees.
As negotiations continued into early Thursday, the pair opposed plans to force all federal employees to pay more toward their retirement benefits to help pay for unemployment insurance and the payroll tax cut extension. They agreed to the deal when both sides agreed to shield current federal employees from any pension changes.
In an interview, Cardin shared details from the negotiations and said he plans to block any other Republican attempt to curtail federal pay and benefits. A transcript of the interview follows, edited for length and clarity:
What happened during the negotiations Wednesday and early Thursday?
We negotiated the better part of the day as it related to the federal workers. The whole scope of the negotiations changed Monday night when the Republicans conceded the payroll holiday and then we were only concentrating basically on a $30 billion package on the unemployment benefits.
By Tuesday night, that became the focal point of negotiations. We knew that we were being challenged, we argued very strenuously that there should be no offset, and if there were, that there shouldn’t be any with the federal worker.
The barometer we were given we considered wrong. Chris Van Hollen and I worked on it, we disagreed with it, we thought it was wrong, but working within the premise, we had a few options. We made some progress on some, we worked with the White House, they were very helpful.
We ended up with an option that we recognize would protect current workers – which was a goal that Chris and I felt we wanted to do.
So there was no budging by the Republicans on federal pay or compensation?
Once the parameters were established that a.) there would be offsets and b.) half of it would come from federal workers, there was no budging. That’s where we started yesterday morning.
Let me make it clear: I did not think there should be any contribution increases in this bill, but I do think there’s a differential between people who are currently working and new hires. I think we have a moral obligation to someone who made a commitment going into public service. They may now be at an age where their options might not be as good as when they started in public service.
But to now change the rules on something they planned on, we thought was wrong. So there’s a policy reason, plus a moral obligation reason to not change the rules for the current worker.
We’re not happy about the additional contributions for the new hires, but for people who come into federal service, it’s something they’re going to have to consider.
Will you support any other GOP proposed changes to federal pay?
The GOP transportation bill is going to be a non-starter. The president has a very modest cost of living increase, .5 percent, and we’re going to fight to maintain that.
Federal workers have had additional pension contributions, pension benefit reductions and they had a freeze. What we got in this bill, first, we eliminated the freeze, we eliminated the pension benefit reductions, we eliminated any increase for current workers and the increase for new hires is less than what they had in their bill.
But I’m disappointed, I’m very much opposed to that provision in the bill, I think it’s wrong, although I feel strongly that this process has to move forward and we’ve got to end the gridlock. I’m certainly holding my options on what I’ll do when this bill is voted on on the floor of the Senate.
So even though you cut this deal, you might vote against it?
I don’t think I helped cut this deal. Given the parameters I was given, I did the best I could. But this wasn’t an agreement of my making.
Will there be enough new federal hires in the coming years to actually help pay for this?
That’s a great question. I don’t always agree with the Congressional Budget Office estimates, but knowing what’s been done with the federal workforce in recent years, I don’t know. I don’t know how they got their projections.
But I come from the view that unemployment insurance should not be offset, it’s an emergency situation, and the fairness of saying we don’t have to offset a tax cut, but we do have to offset insurance, escapes me. That’s why I say this wasn’t my deal. I just did a piece of it based on where I could negotiate.
Aren’t you creating a multi-level federal retirement system by doing this? What message does that send to the workforce – that you’re willing to make new, future hires become essentially second-class feds?
Well, we already have that. We already have a two-tier system. Now we have three. Because we have the [Federal Employee Retirement System], we have the [Civil Service Retirement System], so we had two different systems that we’ve had before. So it’s nothing different than we’ve had in the past.
We did this in Maryland also. When you implement a new system, we often say that we won’t do this for people already in the system, we do it just for the new hires. So it’s not uncommon.
Did President Obama’s budget proposal of forcing all federal employees to pay 1.2 percent more toward their retirement over three years make this an easier deal for Democrats to stomach?
The fact that the president had it in his budget made it much more difficult for us. ... It made it more challenging for us to keep it out of the package.
So the president made your life more miserable?
That’s not the term I would use, but he made it more difficult for us to be able to keep the federal contribution from workers out of the package, since his budget included a 1.2 percent increase in pension contributions.
Does Obama’s proposal essentially establish a floor for future negotiations on fed eral compensation? And will Republicans push for other changes to their pension and pay?
We know that the Republicans will continue to send over new proposals on the federal workforce. But I think from the point of view of my colleagues on the Democratic side, this is it. If we’re able to talk about a long-term budget agreement, I’m not going to make any predictions of what would be in there. But I think when you look at the legislation that’s going to pass in this Congress, how you pay for it, how you deal with this year’s appropriations bills, I think we have an excellent chance of preventing any other erosion to the federal workforce.
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