Pay raise on way out, furloughs on way in

March 19, 2013

This post has been updated.

Congress is poised to close the door on the possibility of a federal employee pay raise for the remainder of this calendar year while leaving in place spending cuts that threaten many workers with unpaid furloughs.

The Senate could finish work Tuesday on a bill that wraps up the budget for the current fiscal year and which denies a 0.5 percent raise that otherwise would have taken effect next month. The House  had passed a separate version also keeping federal salary rates frozen through the calendar year.

(David Snodgress/AP)
(David Snodgress/AP)

Leaders hope to finalize work by the end of the week on the bill, which is needed to keep the government operating past the March 27 expiration of a stopgap law that has been funding the government since last October. The House may accept the Senate bill rather than go into a conference to resolve the differences.

Federal salary rates have not been increased since January 2010, although if eligible, employees may continue to receive raises for performance, on promotion, or on successfully completing a waiting period in grade-and-step-type pay systems. The extension of the freeze also would apply to members of Congress and top political appointees.

Both versions of the “continuing resolution” leave in place the sequestration cuts that took effect March 1 and that have threatened furloughs in many agencies. Each would allow certain new flexibilities in how agencies can achieve the required savings, the Senate bill to a greater extent than the House bill. However, those changes likely won’t lift the threat of furloughs.

Announced plans vary widely, with some agencies saying they won’t need to require employees to take unpaid days off, while others have projected furloughs ranging from several days to 22 days. Where furloughs are planned, timing also differs. Several agencies, including the largest, the Defense Department, expect to start the week of April 21, while some don’t expect to begin until later.

Also  Tuesday, the House is taking up a budget plan for the upcoming fiscal year which would require federal employees to increase their contributions toward their retirement benefits by about 5.5 percentage points. The bill also would seek a cut in the workforce of 10 percent by attrition over two years.

Many federal agencies already have imposed general hiring freezes due to sequestration.

The House expects to vote  Wednesday on several alternative budgets, including one sponsored by the ranking Democrat on the House Budget Committee, Rep. Chris Van Hollen (Md.). That plan would not require higher retirement contributions or a workforce cut, while proposing to replace sequestration with spending cuts in defense and certain domestic programs, reductions in agriculture subsidies and reduced tax breaks for the wealthy.

However, an alternative from the Republican Study Group, a caucus of House conservatives,  would raise employee retirement contributions and calls for limiting the “size and scope of government” — although it does not specify a workforce reduction goal. It also would change the health insurance premium sharing formula to a voucher system, base retiree inflation adjustments on a less generous measure, and end the practice of “official time,” in which federal employees who serve as union officials can conduct certain union business during working hours.

After finishing its work on the temporary funding bill, the Senate is set to turn to its counterpart budget resolution that does not seek a reduction in the federal workforce nor an increase in retirement contributions. One provision of special interest to federal workers, added in committee voting by Sen. Mark R. Warner (D-Va.), would allow shifting of funds within the Office of Personnel Management to support efforts to reduce the backlog of federal retirement applications pending there.

The Senate version also would seek to replace sequestration in ways similar to those proposed in the House Democratic alternative.

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Josh Hicks · March 19, 2013