A budget plan unveiled Tuesday by House Republicans is largely silent on federal employee pay and benefits, but the details to come could tell a familiar story.
A spending outline to be considered by the House Budget Committee on Wednesday “is very short on specifics, but I don’t think we’re off the hook yet,” said Jessica Klement, legislative director for the National Active and Retired Federal Employees Association.
NARFE and other federal employee organizations have called on Congress to leave federal employees alone in the budget process, citing recent hits including a freeze on salary rates from 2011 to 2013 and requirements that some employees pay more toward their retirement benefits.
However, a Capitol Hill official said that a report set to be released this week to flesh out the plan will again include what prior versions have called “illustrative policy options” for federal benefits.
One would be to increase the amount all federal employees must pay toward their retirement benefits. Prior plans have suggested making the employee and government shares equal; for most employees, that would mean an increase in required contributions of about 6 percent of salary.
The official said that the report also will repeat earlier suggestions, including tying the growth in the government contribution toward federal employee health-care premiums to general inflation instead of the usually higher actual growth in the program’s premiums; lowering the government’s share of those premiums for future retirees who had relatively short working careers; and generally reducing the civilian federal workforce by 10 percent through attrition.
Another is reducing the rate of return — and thus the government’s cost in interest payments — in the largest investment fund in the Thrift Savings Plan, the 401(k)-style program for federal and military personnel. The government securities fund, or G Fund, yields a return about equal to mid-length government bonds, in the 2 percent range the past several years, even though it does not have the same risk of losses of principal if interest rates go up.
The TSP opposed that change when it was first proposed last year in a similar House budget plan, saying it would reduce the G Fund return to nearly zero.
An accompanying document does specify one new proposal regarding the TSP, to allow veterans to deposit disability compensation in those accounts. The TSP said Tuesday that while it “is very sympathetic to the desire to assist disabled veterans,” the idea would raise several issues, including that it would create a benefit available only for those veterans who have such accounts, through their military service or through reserve service as a federal employee.
One area in which the silence may continue involves a federal employee raise for January 2017. President Obama has proposed a 1.6 percent increase, and if Congress goes through the entire year without staking a position, that increase will be paid by default. Congress has followed that strategy for the past three years, resulting in raises from 2014 to 2016 of 1, 1 and 1.3 percent.
The document also calls for combining or ending what it calls unnecessary, duplicative or inefficient federal programs in job training, food aid, housing assistance and other areas.
It also suggests “reforms in the area of awards and bonuses” at the Department of Veterans Affairs and for continued efforts aimed at “reducing the number of senior and middle managers” and “streamlining the disciplinary process.”
The budget “resolution,” if passed, serves only as guidance for later policy and spending bills. The House typically has passed the measure each year, although the Senate has not always followed suit; in addition, there are internal disputes in the House this year.