Coalition's letter opposing cuts in benefits carries risk

Washington Post Staff Writer
Thursday, January 13, 2011; 8:35 PM

Fighting for its members in the face of proposed budget cutbacks, a coalition of federal employee organizations has asked President Obama to reject proposals to cut health and retirement benefits, reduce the federal workforce by 10 percent and freeze pay for three years.

The recommendations were made in December by the bipartisan National Commission on Fiscal Responsibility and Reform. Congress has already approved Obama's proposal for a two-year freeze, which was implemented this month.

The 15 organizations in the Federal-Postal Coalition that signed a letter to the president probably will have a tough fight. Congress and the administration are looking for ways to save money, as evidenced by the current pay freeze. It's probably a good bet that the coalition will not get its every wish.

Obama has "the utmost respect for federal employees," said an Office of Management and Budget statement. It went on to say the administration has "been clear that it will take some tough choices and shared sacrifice to get our country on a sustainable fiscal path- so that we can focus our resources on what is critical to growing the economy, spurring job creation, and make the U.S. more competitive."

The letter carries a risk. By opposing so much of what the commission recommended, the coalition could appear unwilling to participate in a broad-based effort to get the nation's finances under control.

For example, the coalition opposes the recommendation to cut the federal workforce through attrition by 10 percent by 2015, saying it "is more about politics than good human resource management." That may well be true, yet hiring would continue under this proposal, just at a slower pace. Because the cuts would come through attrition, no employees would lose their jobs.

The coalition argument on this point would have been stronger had it cited possible cuts to customer service that could result from reduced agency staffing.

Realizing the pay freeze is a done deal, at least for two years, the organizations give primary attention to proposals affecting retiree and health benefits. The letter says the organizations "are deeply troubled by the commission co-chairs' proposal to calculate federal civilian retirement annuities on the highest five years of salary instead of the highest three years."

Citing Congressional Budget Office figures, the letter says the commission's plan "would reduce a Civil Service Retirement System (CSRS) annuity by an average of $1,424 in 2010 and by an average of $7,148 over five years. A Federal Employees Retirement System (FERS) annuity would be cut by an average of $462 in 2010 and would be reduced by an average of $2,322 over five years."

As the letter points out, if FERS employees are required to contribute a higher percentage of their salaries toward their defined retirement benefits it would amount to a significant cut in their pay.

Making annuitants pay a greater share of health insurance premiums "would impose an unfair burden on retirees and survivors whose medical costs are significantly higher than younger enrollees," the letter said.

Regarding the pay freeze, the coalition says it "sends the wrong signal to the best and brightest workers federal agencies will need to recruit and retain to make government operate more efficiently, prevent the next terrorist attacks, fight two wars, cure diseases, provide assistance to unemployed and disabled Americans and treat wounded military personnel and veterans."

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