Furloughs and federal pay at stake in dueling budget plans

March 14, 2013

Senate Democrats on Wednesday released a budget plan that unlike its House counterpart does not target federal employee compensation but does seek to replace the sequestration spending cuts that threaten workers of many agencies with unpaid furloughs.

“Federal workers play a key role in running a smart and efficient government,” says the plan from the Democratic-controlled Senate Budget Committee. “These workers have borne the brunt of recent deficit reduction efforts, with years of pay freezes and many workers facing furloughs in the coming months caused by the indiscriminate and untargeted sequestration cuts.”

It adds, “The Senate Budget supports a smarter approach to savings through federal employee and contractor reforms that will explore opportunities to better leverage the federal government’s buying power and to review contractor compensation. The President’s budget and bipartisan deficit reduction proposals have recommended reforms, which will save the taxpayers money, provide greater compensation parity between federal personnel and government contractors while encouraging the retention of an experienced, high‐quality federal workforce.”

(Victor J. Blue/Bloomberg)
(Victor J. Blue/Bloomberg)

It mentions selling excess federal property, reducing improper payments and consolidating duplicative programs. The reference to contractor compensation reflects proposals to reduce the maximum that contractors can pay their executives.

The plan would replace sequestration with alternate spending cuts, reduced defense spending reflecting the drawdown from Afghanistan, and repealing certain tax breaks that disproportionately benefit high-income individuals. Sequestration will be a multi-year process unless repealed, and because the budget resolution would not apply until the fiscal year that begins in October, the relief it could provide in the short run would be limited.

The committee is to consider amendments and vote on Thursday.

Meanwhile, the Republican-controlled House counterpart committee defeated a similar Democratic bid to replace sequestration with a mix of spending cuts, revisions to farm subsidies and tax policies for oil and gas companies, and minimum tax rates for those with incomes above $1 million.

The budget resolution before that panel, released Tuesday, calls for federal employees to contribute about 5.5 percentage points more of their salaries toward their retirement benefits and seeks to reduce the federal workforce by 10 percent through attrition. Committee Democrats released a report criticizing those provisions, calling increased retirement contributions “effectively an additional pay cut.”

“For the purpose of paying down the deficit, the Republican budget adds to the $103 billion financial burden already shouldered by federal employees in previously‐enacted deficit reduction bills,” it says. “Federal workers are hardworking, middle class Americans who are struggling through difficult times and yet no one group has been asked to contribute more to deficit reduction.”

The committee was voting on amendments into the evening.

The full Senate on Wednesday meanwhile began floor consideration of a separate measure, to provide agency funding for the remainder of the current fiscal year. Like a counterpart bill passed earlier by the House, the Senate bill denies a 0.5 percent federal employee raise that otherwise is scheduled to take effect in April.

Both versions also would allow agencies to move some money among accounts to lessen the impact of sequestration in the immediate months ahead. The Senate bill provides greater potential for relief than the House bill.

The measure is needed because a temporary law expires March 27; without renewed authority, the government would partially shut down and federal employees would go unpaid, with some of them required to continue working. A vote is planned for Thursday.

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