Debate over government’s role ensnarls federal employees

August 15, 2012

The battle between Republicans and Democrats over the size and scope of the U.S. government has put federal workers — their numbers, their pay and their benefits — at center stage this campaign season.

While cutbacks enacted so far apply only to future potential hires, the outcome of the fight could have a significant impact on current employees, according to members of Congress and union officials.

A case in point is the federal retirement program. The White House budget plan proposed to increase the required contributions from all employees by 1.2 percent of salary, phased in over three years. House Republicans upped the ante by proposing a 1.5 percent increase as part of a bill extending unemployment benefits.

The final version of that law left current employees untouched but required a contribution increase of 2.3 percentage points from those hired into government starting next year, unless they have at least five years of prior federal service.

But higher contributions by current employees have remained under active consideration, with the House later passing a deficit-cutting bill calling for a 5-percentage-point increase over three years. That plan stalled in the Senate, as had an earlier House Republican budget seeking to reduce the workforce by 10 percent over four years through a partial hiring freeze.

“The Republican to-some-degree hostility toward government in general is reflected in their treatment of federal employees, unfortunately,” said House Democratic Whip Steny H. Hoyer of Maryland.

“The bright spot is, it’s not as bad as it could have been,” said Hoyer. “The Senate was unprepared to do some of the things that the Republicans wanted to do vis-à-vis federal employees.”

After Congress returns from its recess in September, one immediate task will be to provide funding for agencies for the fiscal year starting Oct. 1 or face the risk of a partial government shutdown, since no regular spending bills have been enacted. Before the recess, leaders announced a tentative deal to generally extend current funding through March.

Also to be decided is whether the two-year freeze on federal salary rates will continue. The House has voted several times to extend it by a year or more and has been crafting spending bills reflecting that assumption. The White House has objected to each in turn, advocating for the 0.5 percent increase it proposed in its budget plan in February.

Hoyer, who represents a district with many federal employees, said he expects the freeze to continue for another year, even though federal workers are supposed to get a raise under a law calling for salary bumps when private-sector pay rises. “I think there is a general public view, which is absolutely not accurate, that a federal employee is paid better than their private-sector counterpart and their benefits are better,” he said.

A long-running controversy over comparing federal and non-federal pay, with different methods and sets of data producing widely varying results, has continued. A recent Government Accountability Office report that could have served as a tiebreaker refused to endorse any of the approaches.

Meanwhile, automatic cuts of about $110 billion from agency budgets, roughly equally split between defense and non-defense spending, are to begin in January unless they are prevented. That has raised concerns about possible furloughs, layoffs, office closings and other steps that could hit federal employees directly.

Just before Congress returns, the administration is to report on the potential impact of this “sequestration,” under a bill that President Obama signed last week. Earlier this year, in reaction to the House Republican budget plan, the administration said that agency budget cuts could hit air traffic control services, workplace safety inspections, national parks, federal law enforcement, student grants, clean energy initiatives and scientific investment, among other programs.

Some agencies already are feeling a budgetary squeeze. Several have offered buyout and early retirement incentives. The Social Security Administration this month offered early retirement to 9,000 of its 62,000 employees, with a deadline to leave of Sept. 30.

In the months ahead, Congress could revisit the idea of raising retirement contributions, along with cutting the federal workforce, according to those on each side of those issues.

“Looking forward, the overall pension costs of federal retirees as well as the size of the workforce should be our focus. . . . We have the largest non-defense federal workforce in two decades,” House federal workforce subcommittee chairman Rep. Dennis A. Ross (R-Fla.) said in an e-mailed statement.

Ross said Congress should consider moving to a defined-contribution pension plan for all future federal employees, requiring greater employee contributions, and reducing the workforce through attrition.

Employee organizations argue that federal workers already have been singled out to make substantial contributions to deficit reduction. They point to the freeze on salary rates — raises based on performance, promotion or longevity still are paid — and the higher retirement contributions that future employees will face.

“Federal employees are offered up as sort of the poster child for everything that’s wrong in this country,” said William R. Dougan, National Federation of Federal Employees (NFFE) president. “They’re offered up as these overpaid, underworked, less-than-productive folk who have these Cadillac benefits.”

“It is getting harder and harder as a manager to keep morale up when the federal workforce is consistently singled out as the first call for greater sacrifices,” Patricia Niehaus, president of the Federal Managers Association, said in an e-mail.

Federal employee supporters also challenge assertions about the growth of the government. They point to budgetary data showing that counting both defense-related and non-defense civilian employees, the workforce is about the same size as during the Reagan administration and is slightly smaller than during the George H.W. Bush administration at around 2.1 million work-year equivalents.

Measured as a percentage of the population, the federal workforce now is several percentage points lower, they say. Those accountings do not include military, postal or contractor employees.

Dougan of NFFE said it has been difficult for employee advocates to get their message heard in the current political climate.

“With all this debate in Congress and the media about the size of government and the role of government . . . the taxpayers are not being asked what they want to be the role of government in this country — what services are they willing to give up or reduce,” he said. “Until that happens, we’re going to continue to see these broad-brush approaches.”

The scandal involving General Services Administration awards and conferences was especially damaging to federal employees in the current atmosphere, noted Max Stier, president and CEO of the Partnership for Public Service, which has a content-sharing relationship with The Washington Post.

“Way too much is made of mistakes and not as much is made of the good things that happen,” Stier said. He cited as positive developments for the government a new law to streamline the confirmation process and the landing of the rover Curiosity on Mars.

“It’s unfortunate that it’s become accepted wisdom that beating up on federal employees is good politics,” Stier added.

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