House action amounts to federal pay cut
By Joe Davidson,
It’s been a good week for federal employees.
There was one event after another praising their work and sacrifice as part of Public Service Recognition Week. On Tuesday, the Senate passed legislation that would strengthen protections for federal whistleblowers. On Thursday morning, the National Academy of Public Administration sponsored a scholarly discussion on the founding fathers and the federal civil service.
Then, Thursday afternoon, House Republicans pounced.
They brought federal employees back to earth by approving what amounts to a 5 percent pay cut for the workforce, as part of a larger budget saving package.
The 218 to 199 vote was on a “reconciliation” bill designed to find reductions that would allow the government to avoid automatic hits to Defense and other programs scheduled to take effect in January. No Democrats voted for the bill, which would cost federal workers about $83 billion. Sixteen Republicans joined the opposition.
Under the bill, federal paychecks aren’t directly slashed, but workers would be required to pay an additional 5 percent of salary for retirement benefits, with no increase in those benefits.
“After this goes into effect, they will in fact not have as much take-home as they did the day before,” Rep. Darrell Issa (R-Calif.) acknowledged on the House floor. Issa is chairman of the House Oversight and Government Reform Committee that earlier approved the 5 percent hike.
It would be phased-in, starting with 1.5 percentage points next year, then half a percentage point in 2014 and an additional full percentage point in each of the following years. New employees hired after this year would pay the extra 5 percent immediately.
“Instead of using this week to celebrate the good work of government employees who dedicate their lives to serving others, the Republican Majority has put legislation on the House floor today that would take billions of dollars out of their pockets.,” Rep. Elijah E. Cummings (D-Md.) said shortly before the vote. He is the top Democrat on the committee.
“Our middle-class federal employees have already contributed $75 billion towards deficit reduction and other government programs, while millionaires and billionaires have not been asked to contribute one additional cent to improve our government’s financial condition,” Cummings added.
The $75 billion represents the $60 billion the government is saving over 10 years through the current two-year freeze on basic federal pay rates. The other $15 billion comes from earlier congressional action requiring those hired after this year to contribute an additional 2.3 percent of salary for retirement.
The Obama administration also opposes the reconciliation bill, although its statement on the legislation made no mention of the hit on federal employees.
Now the bill goes to the Senate, where the Democratic majority is much less likely to pass it.
Much of the discussion during Public Service Recognition Week focused on the many ways talented and dedicated federal employees serve the nation. This bill could hamper hiring others like them and make some on the payroll consider leaving.
The reconciliation measure “undercuts the ability to recruit and retain the talented individuals our government needs, and further endangers the critical services that our nation depends on by seeking to replace the majority of the automatic sequester defense cuts with additional domestic discretionary spending cuts, which would force agencies to cut services,” said a statement by the National Treasury Employees Union.
Members of Congress also would pay more for retirement under the bill. Their required contributions would rise by 8.5 percent of salary over the five years. Issa says this would mean all federal employees would pay their “fair share” toward retirement.
There’s nothing fair about it say union leaders.
Under federal budget rules, the mandatory pension contribution increase is considered a tax increase, according to the American Federation of Government Employees, and that violates a cardinal rule of Republicanism.
The “bill’s drastic tax increase,” Beth Moten, the union’s legislative and political director said in a letter to Congress, could result in lower employee contributions to their Thrift Savings Plan, savings that for most employees get a government match.
“So employees will pay much more now,” she wrote, “and are virtually guaranteed to receive much less when they retire.”
Staff writer Eric Yoder contributed to this story.