The maximum “buyout” payment to encourage federal employees to leave voluntarily when agencies are downsizing or reorganizing will remain $25,000 at most agencies under a House-Senate agreement announced Tuesday.
Conferees on the annual defense budget dropped Senate language to allow all agencies to pay up to the $40,000 already available at the Defense Department.
The agreement did not specify the reason, but a Capitol Hill official said that while there was support for the increase, a price tag estimated at above $300 million over 10 years — which under budget rules would have to be offset by raising fees on military retirees — ultimately outweighed that support.
Agencies typically offer buyouts, also called “Voluntary Separation Incentive Payments,” to avoid the complex and lengthy government layoff process called “reduction in force.” Employees who accept the payments, which are reduced by taxes, must agree not to return to the government for five years or else repay the full amount.
The incentives commonly are offered along with offers to retire earlier than under regular civil-service eligibility rules.
During the government’s budget year ending in September, agencies paid just fewer than 2,700 buyouts, more than 1,900 of them at the Defense Department, the largest federal agency, data from the Office of Personnel Management shows. The total was slightly less than that of 2015-2016 but well below the 6,800-to-14,000 range of the prior three years.
The Obama administration in 2016 first proposed increasing the maximum to $40,000 for all agencies, arguing that the $25,000 limit in effect since the government began offering buyouts in the early 1990s was no longer sufficient. However, Congress that year agreed to boost the amount only for the Defense Department and only through Sept. 30 of this year.
Last year, the Trump administration made the same request for the same reason, but in response Congress only extended the higher amount for the Defense Department for an additional three years. The White House repeated the proposal earlier this year, and while the Senate initially agreed, the House position prevailed in the conference.
The bill could reach a House floor vote later this week.