Headline on the front page of Friday’s Washington Post: “Obama budget to rebuff austerity.”
“With the 2015 budget request, [President] Obama will call for an end to the era of austerity that has dogged much of his presidency,” my colleague Zachary A. Goldfarb wrote.
That echoes the American Federation of Government Employees (AFGE), whose members rallied outside the U.S. Capitol two weeks ago, chanting: “Share prosperity, not austerity.”
Maybe Obama heard them.
Whether he did or not, the fiscal 2015 budget proposal he plans to release next week will be greeted with great anticipation by federal workers for what it says and what it doesn’t.
“I think there will be a recognition in this budget that federal employees have sacrificed enough,” said Colleen M. Kelley, president of the National Treasury Employees Union. Her members will make that point to Congress during the legislative conference that opens Wednesday.
After three years of basic pay rate freezes, furlough-related pay cuts for some workers and increased pension contributions for new staffers, she said “enough is enough.”
There will be some good news for feds, but how much remains to be seen.
“The president’s budget will not require additional contributions from federal employees for retirement benefits,” said Rep. Chris Van Hollen (Md.), the top Democrat on the House Budget Committee. “That’s obviously a very important message to send to federal employees — that they are no longer going to be asked to disproportionately contribute toward long-term deficit reduction. . . . Those additional contributions act as effective pay cuts.”
Obama’s last two budgets included plans to raise those contributions by 1.2 percentage points over three years on the then-current workforce. That was never approved, but higher pension payments were required for feds hired in 2013 and 2014. Under this three-tier system, most workers hired before 2013 pay 0.8 percent of their salary toward their pensions; staffers hired last year pay 3.1 percent; and those hired this year and later — and who have less than five years of previous federal experience — pay 4.4 percent.
“This has resulted in some of the biggest changes to the retirement system in decades,” said William Dougan, president of the National Federation of Federal Employees. “But those targeting federal workers for retirement cuts are still hungry for more.”
For the AFGE, ending the call for additional pension hits was a positive first step, “but our priority is to repeal the cuts to federal retirement for those hired in 2013, 2014 and after,” said AFGE President J. David Cox Sr. “I won’t rest until they are repealed.”
He’s got his work cut out for him on that front.
Van Hollen doesn’t know what the White House will propose regarding federal pay, but he’d like to see a raise that keeps pace with inflation. That was 1.6 percent over the past 12 months, according to the Labor Department’s consumer price index.
“A three-year pay freeze, furloughs, government shutdown and relentless Republican attacks on the pay and benefits of middle-class federal workers has brought federal workforce morale down to historic lows,” said Rep. Elijah E. Cummings (Md.), the ranking Democrat on the House Oversight and Government Reform Committee, which oversees federal workplace issues. “A 3 percent pay increase for federal employees for fiscal year 2015 would go a long way towards helping to improve worker morale,” he said.
Committee Chairman Darrell Issa (R-Calif.) said he wants a compensation model “where the best and most in-demand federal workers have a chance to earn more, and those that don’t fit that description don’t get such excessive compensation that they’d be crazy to leave for the private sector. But I’m not expecting to see anything that bold in the president’s budget.”
Kelley is pushing for a 3.3 percent hike for 2015.
Is that realistic?
“I realize it’s a lot more than zero or 1 (percent), but I think it’s reasonable, and I think it’s fair,” she said.
To the relief of federal employee leaders, along with many others, the White House will no longer push for an inflation formula, called the chained CPI, that would lead to lower Social Security payments.
“This flawed proposal should be taken off the table once and for all, and it is heartening to see the president has changed course on the chained CPI,” said Joseph A. Beaudoin, president of the National Active and Retired Federal Employees Association. “Our nation’s seniors, veterans and federal retirees should never be pawns in the budget game.”
While sacrifices might continue to be necessary, Sen. Thomas R. Carper (D-Del.), chairman of the Homeland Security and Governmental Affairs Committee, said they should be “equitable and manageable, and federal workers aren’t bearing the brunt of these cuts as they have been asked to do recently.”
Dougan and other leaders noted that feds are contributing about $120 billion over 10 years toward deficit-reduction measures.
“Federal workers have been crushed by austerity measures over the last few years,” he said, “and it is time for that to stop.”
Previous columns by Joe Davidson are available at wapo.st/JoeDavidson.