The Federal-Postal Coalition, representing about two dozen organizations of federal employees, is urging President Obama and congressional leaders “to reject proposals that will prove damaging to federal employees in any final agreement over raising our nation’s debt ceiling.”
The major concern is “the proposal to require federal workers to contribute a much higher share of their salary toward their defined benefit annuity, which would have the effect of an immediate and significant net pay cut,” the Coalition said in letters to the White House and Congress. “Additionally, the increased contribution would not result in any corresponding increase in an employee’s retirement annuity.”
An increase in the amount paid by workers without any increase in annuities “represents a selective payroll tax increase that could exceed five percent of the entire income of federal workers,” the letters said.
Republicans have insisted on no increase in taxes. And the letter to Obama said “increasing the employee contribution to contribute more to their pensions would be a violation of your campaign pledge not to raise any taxes on those earning less than $250,000.”
In both letters, the Coalition said: “Without a doubt, the proposed increase in federal employee pension contributions is a payroll tax increase as surely as any payroll tax increase to Social Security would be.”
The Coalition previously protested proposals to increase the employee contribution to federal pensions in a letter to the Senate Budget Committee in May, as the Federal Diary reported in May.
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