No one whose prime responsibility is to look out for the federal workforce was there, even though it is only federal workers who so far have been targeted in deficit reduction. And they could be called on to sacrifice more.
When Obama and Congress found $75 billion in savings over 10 years, through a freeze on basic pay rates and changes to retirement, it was federal employees who paid the price. With the pay freeze extended beyond its original two years, the cost to feds will be more.
Certainly it’s good that leaders of the National Education Association and the Service Employees International Union were at the meeting, along with representatives from the other two unions, but no one should expect them to use their limited time with the president to say feds already have paid enough.
It wasn’t a big meeting, and more people always want the president’s ear than he has time to meet. But having one seat at the table for a federal union leader, especially when the think tank Center for American Progress had two, is only reasonable because federal employees and retirees will be hit directly by deficit reduction efforts and probably more than any other group.
“It was our understanding that the meeting involved a relatively small group of labor leaders who were taking the lead on Social Security and Medicare issues in regard to the fiscal cliff,” said Colleen M. Kelley, president of the National Treasury Employees Union (NTEU). “NTEU has made its position on federal employee pay and retirement issues very clear to the Obama administration and congressional leadership and we will continue to do so.”
She might need to do so fairly soon.
There are a number proposals afloat that would reduce the deficit by reducing compensation for federal employees.
One, revived last week by the Congressional Budget Office (CBO), would “adopt a voucher plan and slow the growth of federal contributions for the Federal Employees Health Benefits program.”
A March 2011 CBO report explained how this would save Uncle Sam money, by taking it from his staff:
“This option would offer a voucher for the FEHB program that would cover roughly the first $5,000 of an individual premium or the first $11,000 of a family premium beginning on Jan. 1, 2013.”
The vouchers would increase annually, but not as much as the increase in premiums, which “are predicted to grow significantly faster than inflation,” according to CBO.
So if FEHB premiums increase faster than inflation, who pays the difference under the voucher program?
“If the next 20 years look like the last 20 years [in terms of health-care inflation], in 20 years federal employees will pay 80 percent of their premiums,” instead of the 30 percent they now pay, said Jacqueline Simon, the American Federation of Government Employees’ public policy director.
The additional charge to employees would amount to a “massive, massive compensation cut for federal employees and families.”
The voucher plan was included in the deficit reduction program outlined two years ago in the Simpson-Bowles plan, which is again drawing attention. Federal unions didn’t like Simpson-Bowles when it was released and while some folks are giving it a second look, for federal labor leaders it hasn’t improved with age.
Among other things, Simpson-Bowles said changing the federal retirement formula should be considered. Now retirement calculations are based on the highest three years of an employee’s pay. Using the highest five years, according to Simpson-Bowles, would “bring the benefit calculation in line with the private sector standard” and save $5 billion over 10 years.
That would be $5 billion out of the pockets of federal employees and retirees.
“The Simpson and Bowles plan died two years ago when their commission failed to endorse it, and I don’t see any reason to dig it up now,” AFGE President J. David Cox Sr. said last month. “Simpson-Bowles is an ugly, unfair, and immoral assault on the federal workforce, and their ideas deserve total rejection and repudiation.”
Previous columns by Joe Davidson are available at wapo.st/JoeDavidson.