While his civil service reform ideas are vague, Trump’s plan on federal compensation is clear — cut it.
Compensation cut No. 1: Freeze federal pay in 2019.
In justifying the administration’s call for a pay freeze, the budget document says that “Across the board pay increases have long-term fixed costs, yet fail to address existing pay disparities, or target mission critical recruitment and retention goals.”
It’s true that pay raises cost money. Yet freezing pay comes with other costs, including lower morale and increased hardship for employees. But how does no raise for anybody address pay disparities? And freezing pay hurts — not helps — recruitment and retention. As other costs rise, frozen pay is a reduction in the real wages of federal workers.
Compensation cut No. 2: Slow the frequency of “tenure-based ‘step-increase’ promotions that white-collar workers receive on a fixed, periodic schedule” while increasing pay-for-performance.
Pay-for-performance riles federal union leaders, who recall the troubled system the Defense Department employed during the George W. Bush administration. It was repealed by Congress, following a flood of complaints, including charges of racial discrimination in pay in favor of white employees.
Compensation cut No. 3: Have the government pay less and federal employees pay more toward their retirement.
Trump and Mulvaney would do this in four ways:
- Decrease the government’s share and increase employees’ payments toward the Federal Employees Retirement System (FERS) that covers most feds by 1 percent per year, effectively cutting their pay by 6 percent.
- Reduce or eliminate cost-of-living increases for current and future retirees.
- Base annuity calculations on the highest five salary years instead of the “High-3.”
- Eliminate the special supplement for FERS annuitants who retire before their Social Security eligibility.
Compensation cut No. 4: Reduce federal employee sick days and vacation time.
Trump and Mulvaney say federal sick time and vacation days are “disproportionate to the private sector.” Under the guise of giving federal employees “maximum flexibility,” the administration wants to combine “all leave into one paid time off category.” As the budget acknowledges, “This would reduce total leave days,” which is another way to cut compensation.
Compensation cut No. 5: Reduce the interest rate on the G Fund, a popular investment vehicle in the 401(k)-like Thrift Savings Plan (TSP) for federal employees.
This would render the fund “inadequate and ineffective,” Kim Weaver, a TSP spokeswoman, told my colleague Eric Yoder.
Ironically, or dastardly, in the same paragraph outlining the plan to gut the defined-contribution G Fund, the budget document says the administration will study adopting a defined-contribution-only annuity benefit for new federal workers. Trump and Mulvaney think killing pensions and providing only a diluted TSP might have a “recruitment benefit.”
Federal employees rallied against the administration’s proposals, as the American Federation of Government Employees (AFGE) held its legislative conference when the budget plan was released. AFGE President J. David Cox Sr. accused the administration of “trying to suck the life blood” out of federal workers.
“To that, we don’t say, ‘No’; we say, ‘Hell no,’ ” he shouted to cheers as he promised to give the administration “a jar of whoop-a–.”
At an AFGE rally Tuesday outside the AFL-CIO headquarters, just across Lafayette Square from the White House, Sen. Bernie Sanders (I-Vt.) warmed the crowd by saying, “You are here today not only on behalf of hundreds of thousands of federal workers who want decent pay and decent working conditions, but you are here today on behalf of 300 million Americans who understand that what this country is about is providing quality care for veterans, to the elderly, to the children, to the poor and to the sick. That’s what you do. Thank you very much for doing it.”
Amid the cheers for Sanders, no one spoke about his leading role in laying the groundwork for today’s effort to fire feds faster. When Sanders chaired the Senate Veterans Affairs Committee in 2014, he pushed legislation that provided needed improvements to the scandal-plagued Department of Veterans Affairs but also hit civil service protections for its senior executives by significantly weakening their appeal rights against adverse personnel actions. The bill won bipartisan approval, and then-President Barack Obama signed it without a word of dissent about the employee-offending provisions. To the Obama administration’s credit, in 2016 it told Congress the Justice Department would not defend the section of the law that prohibited appeals to the presidentially appointed members of the Merit Systems Protection Board.
There was no mention of that as Cox led the crowd in a chant of “Bernie, Bernie, Bernie.”