Nobody likes tax increases.
But federal employees have more reason than most to wish the White House had been as successful in getting a balanced approach to debt reduction as the intransigent House Republicans were at winning a deal that is not balanced, an agreement that does not include new tax revenue.
Why? Because increasing tax revenue could mean a decreasing need for budget cuts and budget cuts likely would be felt in federal employee pocketbooks. It’s true that more money would not automatically mean fewer budget cuts. The additional funding also could have been used to speed the pace of debt reduction.
But a package without tax revenue provides no alternative. All federal employees are left with are trillions in budget cuts over the next decade. Expect that to translate into cuts in services and operations, which could lead to layoffs, furloughs, pay caps and other ways to make employees pay to reduce the debt.
This means some federal workers would pay twice: Once in the form of reduced services that would affect everyone in the country and again as federal employees when lawmakers look for payroll savings.
About the best thing that can be said about the concerns of federal employees is — for the moment — they dodged a bullet with the debt deal. White House and congressional negotiators had considered proposals that, among other things, would have had employees pay more for smaller retirement benefits and extended the two-year pay freeze that was imposed on federal workers in January.
Those proposals, however, may still pop up, not necessarily as part of a debt reduction package, but as stand-alone pieces of legislation from a House Republican caucus focused on creating a smaller government and reining in federal workforce spending.
The debt deal calls for only $7 billion of cuts in the first year, but even that “could mean cutting tens of thousands of federal jobs like Social Security claims representatives, doctors and nurses at VA hospitals, Border Patrol agents and EPA scientists,” said John Gage, president of the American Federation of Government Employees.
“More spending cuts are just around the corner, and this debt deal lays the groundwork for substantial cuts to vital federal programs like Social Security, Medicare and Medicaid,” he added. “In the meantime, this agreement does nothing to roll back the Bush-era tax cuts that have benefited the wealthiest Americans and corporations. In fact, there is no guarantee that the government will generate any additional revenue under this debt deal.”
At this point, it is too early to tell exactly how the debt deal would impact federal employees. Yet you’d have to be naive to think the federal workforce will not be significantly affected, said International Federation of Professional and Technical Engineers President Gregory Junemann, who couldn’t resist a reference to “an uncompromising and morally deficient House of Representatives.”
“Federal workers in agencies throughout the government will no doubt be facing furloughs and even RIFs (reduction in force),” he said, “and private-sector workers working for contractors will also be impacted.”
One reason so little is now known about the impact is a bipartisan super committee would not have to recommend $1.5 trillion in cuts until November. That panel, half Democrats and half Republicans, could provide another opportunity for federal employees to press for measures that would limit the harm to the federal workforce.
“As the ‘super committee’ develops its legislative package, NTEU will continue to carefully monitor negotiations and be on guard for proposals that unfairly target federal employees,” said Colleen M. Kelley, president of the National Treasury Employees Union.
There’s certainly no guarantee the super committee will recommend increased tax revenue. In fact, a Power Point presentation used by House Speaker John A. Boehner (R-Ohio) says the deal “requires baseline to be current law, effectively making it impossible for Joint Committee to increase taxes.”
The White House disagrees.
An administration official said there is nothing in the agreement that says the committee has to operate under any specific baseline. “The Joint Committee could decide to use whatever baseline they want,” the official said.
Added White House press secretary Jay Carney, “Everything is on the table for that committee, everything including both entitlement reform and tax reform.”
Everything also includes the federal employee pocketbook.