Bills that affect federal workers begin moving through Congress

April 27, 2012

Several measures that could have big consequences for federal workers began moving through Congress this week, including bills requiring employees to contribute more to their pensions and offering buyout and early-retirement incentives for 100,000 postal workers.

It could be months before any of the changes become law, and some may not make it through the House and the Senate. But they reflect a growing sentiment, particularly among Republicans, that cutting government costs will involve more austerity for its workforce.

First, the long-awaited Senate vote to help the U.S. Postal Service become solvent: Among other provisions, the bill would allow postal officials to tap $11 billion in surplus contributions to the Federal Employees Retirement System to offer buyout and early-retirement incentives to as many as 100,000 workers by October 2015.

Restrictions on the Postal Service’s plan to close thousands of rural post offices and mail-distribution centers — and a two-year delay in the end of Saturday mail delivery — could protect some jobs that postal unions fear would disappear. Postal workers also would pay the same health insurance premiums as other federal employees, who contribute more to their health plans.

The postal bill also scales back workers’ compensation benefits for government workers, long a source of frustration for some lawmakers who say the terms are too open-ended.

Workers injured on the job would collect 50 percent of their pay when they reach retirement age, down from the current 75 percent, tax free. Postal workers make up about half of the federal employees on workers’ compensation. Unions oppose the change.

A significantly different postal overhaul proposed by Rep. Darrell Issa (R-Calif.) is pending in the House.

Voting along party lines, the House Oversight and Government Reform Committee, chaired by Issa, approved legislation this week to require federal employees to pay 5 percent more toward their retirement over five years, beginning in 2013. Members of Congress would have to contribute an additional 8.5 percent to their defined benefit plan starting the same year.

The increase means employees in the Federal Employees Retirement System would pay 5.8 percent of their salaries by 2017, plus contributions to Social Security and Thrift Savings Plan accounts. Those in the older Civil Service Retirement System — who contribute 7 percent of each paycheck to their defined benefit plan but don’t participate in Social Security — would give 12 percent by 2017.

New employees hired after 2012 would contribute the additional 5 percent immediately.

Issa said after the vote that the higher contributions are driven by a need to reduce the federal deficit. But National Treasury Employees Union President Colleen M. Kelley called the vote “yet another attack on federal employees,” who already are under a two-year pay freeze.

The Senate has not drafted a counterpart to the Issa bill.

Also awaiting action by both chambers is a proposed overhaul of the Hatch Act, the law restricting political activities by federal employees.

A pending bill, based on recommendations from the Office of Special Counsel, would allow state and local employees whose offices receive federal money to run for partisan political office.

The bill also would allow a wider range of penalties when violations are found, including reprimands. A House hearing is scheduled for May 16.

After a spending scandal at the General Services Administration, the Senate also voted this week to curb federal agency spending on conferences and limit the number of employees who can attend from a single agency.

The expense of a single conference would be capped at $500,000 and all expenses would be posted online. Agencies could spend no more than 80 percent of what they spent on conferences in 2010. Attendance at international meetings would be limited to 50 employees from a single agency.

Sen. Tom Coburn (R-Okla.), the bill’s sponsor, said his reforms could save $65 million a year.

Staff writer Eric Yoder contributed to this report.

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