Budget deal brings some stability to federal workforce

Joe Davidson
Columnist December 18, 2013

The new federal budget means Frankie and Flo Fed don’t have to worry about being shut out by a government shutdown at least for a couple of years.

With the Senate vote Wednesday, Congress gave final approval to the measure and managed to overcome the brinksmanship form of governing that’s become so familiar in Washington.

Joe Davidson writes the Federal Diary, a column about the federal workplace that celebrated its 80th birthday in November 2012. View Archive

Now, Frankie and Flo can breathe at least a partial sigh of relief. But they should not get too comfortable.

The budget agreement, approved last week by the House, does allow a 1 percent pay raise for most federal workers and some stability for a workforce that repeatedly had been threatened with government shutdown. The threat materialized in October, when a 16-day closure of many government offices and functions demonstrated how inept Congress, essentially corralled by obstinate House Republicans, could be.

That experience seems to have shocked some good sense into lawmakers. The result is a spending plan that mandates no additional hits on current federal workers, but does make federal employment less attractive by making new workers pay more for their retirement benefits.

And while the agreement brings a level of increased stability, it does not eliminate the possibility of agencies cutting their staffs through buyouts, early retirements and even layoffs.

“We’re in a moment of relative calm,” said Rep. Chris Van Hollen. “It’s been a very turbulent period with the furloughs and government shutdown and constant attacks on government employees. I think this agreement represents a small but positive step in the right direction.”

Van Hollen, whose suburban Maryland district is home to many federal employees, is the top Democrat on the House Budget Committee and was a key player in the effort to protect federal workers. Through a three-year freeze on basic pay rates, furloughs and increased retirement contributions for employees hired in 2013, the workforce already is contributing an estimated $114 billion over 10 years to close the budget deficit. The budget deal does not give wage grade workers, the lowest paid group, the 1 percent raise their colleagues will get, but legislation to do that has been introduced. Note: The 1 percent raise is less than the 1.2 percent inflation rate the Bureau of Labor Statistics reported Tuesday.

With the freeze and everything else, federal labor leaders said enough is enough.

House Democrats refused to consider any additional hits on the workforce, Van Hollen said, but did agree to having employees hired after Jan. 1, with less than five years previous federal experience, pay an additional 1.3 percent of their pay for retirement.

That sets up a three-tier system. Those hired after Jan. 1 will pay 4.4 percent of their salary under the budget agreement. Employees hired this year pay 3.1 percent. Staff members employed before this year pay 0.8 percent of their salary. The increased payments from future employees will save the government an additional $6 billion, meaning the federal employee contribution to closing the deficit comes to $120 billion over 1o years.

This deal, even with its confusing tiers, is better for feds than what both House Republicans and the White House had proposed. Rep. Paul Ryan (R-Wis.) wanted feds to pay an additional 5.5 percent of salary for retirement. President Obama had called for all federal workers to pay 1.2 percent more. Ryan’s plan would have saved the government, which is to say take from its workers, $120 billion over 10 years. In addition, Republicans also suggested continuing the three-year freeze on basic pay rates. Obama’s proposal would have cost workers $20 billion.

Neither the Republican proposal nor the White House plan was acceptable to Democrats. But it was difficult for them to get around a plan advanced by Obama, their leader. Republicans essentially said if the $20 billion hit was good enough for the Democrat in the White House it should be good enough for Democrats in Congress.

It seemed like a deal might get stuck.

“It’s only right and fair,” Ryan said when he and Sen. Patty Murray (D-Wash.), chairman of the Senate Budget Committee, announced the agreement last week, that “hardworking and dedicated” federal employees “pay something more toward their pensions just like the hardworking taxpayer that pays for those pensions in the first place.”

Murray pointed to the federal worker hurdle in the negotiations: “One of the most difficult challenges we faced was the issue of federal employees and military.”

House Democrats refused to go along with Obama’s plan for feds. Murray didn’t like it, either. They held their ground. The result was no hit on current federal employees but increased retirement contributions from future workers.

This is not ideal for the workforce, but it’s certainly better than what could have been. The two largest federal unions, the American Federation of Government Employees and the National Treasury Employees Union, do not support the increased retirement payments for new employees but praised the efforts of Van Hollen and other members of Congress for not accepting something worse.

Sitting in his Longworth House Office Building suite, with a picture of Martin Luther King Jr. overlooking just enough clutter to make his room look busy, Van Hollen seems cautiously pleased with the agreement. But he is not sanguine.

He knows “this little moment of calm” might not last.

“I wouldn’t be at all surprised,” he said, “if the Republican budget proposal for next year takes another big swipe at federal employees.

“We’ll see.”

Twitter: @JoeDavidsonWP

Previous columns by Joe Davidson are available at wapo.st/JoeDavidson.

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