Congress should freeze the pay of federal employees for a third year and retool calculations of their retirement benefits to help pay down the federal deficit, two senators responsible for federal personnel issues said Friday.
Sens. Joseph I. Lieberman (I-Conn.) and Susan Collins (R-Maine), the chairman of and ranking member on the Senate Homeland Security and Governmental Affairs Committee, said they regret recommending a third year of pay freezes, “but people across the country are struggling, most especially those who are suffering from historic levels of unemployment. And all Americans, including those of us in the public sector, must help get our country out of the hole we are in.”
Lieberman and Collins also endorsed tallying federal workers’ retirement benefits based on an employee’s five highest years of compensation, instead of the three highest years. But any change should limit any adverse effects on workers nearing retirement eligibility.
The senators submitted a series of recommendations to the Joint Select Committee on Deficit Reduction, better known as the “supercommittee,” which asked lawmakers to submit their thoughts on spending cuts by the end of the week.
Lieberman and Collins, two moderate senators who frequently back Democrats and President Obama on key pieces of legislation, carefully track federal employment concerns and are generally lauded by federal worker unions for their thoughtful consideration of personnel issues. But their endorsement of pay freezes and changes to federal retirement system could provide valuable political cover to Democrats who may also agree with their proposals.
Obama ordered a two-year federal worker pay freeze last year in an effort to trim federal spending, after ordering similar salary freezes for White House aides and top political appointees. Union leaders blasted the move, saying it would affect struggling federal employees and prevent the federal government from attracting fresh talent seeking the security that government work has historically offered.
Lieberman and Collins said that extending the pay freeze for another year would save an estimated $32 billion “without significant disruption to agency mission and activities.”
The pay freeze should also include Capitol Hill, they said, noting that “While this will not save significant sums of money, it does represent sacrifice for members of Congress and their staff, and sends an important signal to our nation.”
The pair, who have led the panel for years, said they endorse Obama’s deficit reduction plans that would require federal workers to contribute two percent of their salaries toward retirement benefits, which the administration says would save about $21 billion over the next decade. But the senators said the changes also should apply to the judicial and legislative branches — including members of Congress.
Colleen M. Kelley, president of the National Treasury Employees Union, blasted the recommendations, saying they would “put serious roadblocks in the way of agency recruitment and retention efforts and place an unfair burden on federal workers.”
Sen. Daniel K. Akaka (D-Hawaii), chairman of a subcommittee on federal personnel, also asked the supercommittee to spare the federal workforce from further cuts, saying that they should share in the sacrifice, but that “I believe they have already done so.”
Lieberman and Collins also called for:
— Reexamining a change to the Federal Employees Retirement System that allows feds to earn employment credit for unused sick leave upon retirement. “If the reexamination suggests significant savings from repealing the statute that conferred this benefit, we would recommend doing so,” they wrote.
— Capping the federal reimbursement for the pay of all federal contractor executives -- not just senior management, as under the current cap -- because “federal government contractors should also share the efforts at cost-savings measures during these tough fiscal times.”
The senators also said that their committee is considering reforms to the Federal Employees’ Compensation Act (FECA).
The senators’ recommendations contrast with those of House Democrats who also oversee federal personnel issues.
On Thursday, Democrats on the House Oversight and Government Reform Committee urged the supercommittee to reject additional cuts targeting federal employees.
But on Friday the House committee Republicans reiterated their support for several measures regarding federal workers that were already enacted as part of the GOP-backed House budget. Those include plans to trim the federal workforce by 10 percent through attrition, to have federal workers make higher contributions to their retirement accounts and to adopt the “high five” calculation of retirement benefits.
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