Budget-cutting proposals could affect federal employees
By Joe Davidson,
The congressional “supercommittee” charged with cutting trillions from the nation’s deficit is moving into the final stretch with a range of proposals affecting federal employees.
Officially called the Joint Select Committee on Deficit Reduction, the 12-member bipartisan panel is looking for ways to reduce the deficit by $1.5 trillion over 10 years. The committee, whose plan is due by Thanksgiving, has been getting advice from all over, including a flurry of letters last week from congressional colleagues who have oversight responsibility for the federal workforce.
That advice ranged from right to left, spanning partisan and ideological approaches to managing the workforce. No one knows yet what joint committee members will decide regarding federal employees, but the recommendations by their colleagues and from President Obama outline the main policy choices the committee will consider.
Rep. Chris Van Hollen (D-Md.), a federal workforce supporter on the panel, has repeatedly made it clear that “we cannot balance the budget on the backs of federal employees and they should not be unfairly singled out as we work to reduce the deficit,” his spokeswoman, Bridgett Frey, said recently.
But some hits, in addition to the two-year pay freeze already imposed on federal workers in January, seem likely. Even if the joint committee agrees with Democrats on the House Committee on Oversight and Government Reform and calls for no other measures directly aimed at the workforce, potential cuts to agency budgets could affect employees.
Federal workers also should not be surprised if they are called on to pay more for retirement benefits. Obama has proposed an increase of 1.2 percentage points in employee retirement contributions. Rep. Darrell Issa (R-Calif.), chairman of the oversight panel, recommended significantly larger employee retirement payments. And, significantly, the chairman and the top Republican on the Senate Homeland Security and Governmental Affairs Committee , Sens. Joseph I. Lieberman (I-Conn.) and Susan Collins (Maine), respectively, together called for basing retirement income on the highest five years of salary instead of the highest three, with less impact on those close to retirement.
Issa also wants retirement based on the high-five calculation, saying that method “is much more common in the private sector.”
It’s notable that Sen. Daniel K. Akaka (D-Hawaii), chairman of the governmental affairs federal workforce subcommittee, did not agree with Lieberman and Collins. “While I agree it is important that Federal employees share the sacrifice in these challenging economic times,” he wrote in a letter to the joint committee, “I believe they have already done so.”
In another budget-related matter, the Internal Revenue Service commissioner has warned Congress that plans to cut the tax collector’s budget would worsen the nation’s deficit and erode customer service.
Senate appropriations legislation that would slice $525 million from the IRS and a House bill that would reduce agency spending by $650 million “would lead to noticeable degradation of both service and enforcement and would have a serious detrimental impact on voluntary compliance for years to come,” Commissioner Douglas H. Shulman said in a letter to congressional committees. The IRS budget is about $12.5 billion.
The budget cuts also would result in long waits for customer service, he said.
Rep. John Lewis (Ga.), the ranking Democrat on the House Ways and Means oversight subcommittee, said the proposed IRS budget “makes no sense, particularly at a time when Medicare, Medicaid and Social Security are under attack in the name of deficit reduction.”
Shulman said that because the IRS workforce accounts for 92 percent of enforcement spending, the proposed cuts “would mean that front-line IRS staffing levels must be substantially reduced, leading to a measurable decrease of approximately $4 billion in revenue annually. . . . In other words, these budget cuts will result in a direct increase to the nation’s deficit.”
Customer service also would suffer through the budget cuts, Shulman’s letter said. Responses to taxpayer letters “would be delayed up to 5 months,” he wrote, adding: “Approximately half of the nation’s taxpayers attempting to call the IRS would either be unable to get through or hang up in frustration.”
Colleen M. Kelley, president of the National Treasury Employees Union that represents IRS workers, has been waging a vigorous campaign against agency budget cuts. She said “Congress must act to avoid the devastating impact on taxpayer services and deficit reduction that these proposed funding cuts would have.”