Feds Dodge Bullet in Budget Deal, But Sequester Cuts Still Coming

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Congress’ top budget negotiators struck a deal on Wednesday that avoided spelling out some of the major federal workforce cuts included in previous iterations of the blueprint.

The compromise version of the fiscal 2016 blueprint -- which could receive a vote as early as this week -- would not mandate cuts to federal employee retirement benefits and would not require agencies to downsize through attrition. But it was not all good news for federal employees: the negotiators included $496 billion in reductions to non-Defense discretionary spending over 10 years.

“It’s not good news in the sense that it doesn’t get rid of the sequester,” said Jessica Klement, legislative director for the National Active and Retired Federal Employees Association. “Agencies are going to have a hard time carrying out their missions.”

She added, however, the budget does not “take from the federal community” directly as did the original House and Senate documents. The House-backed blueprint would have slashed 10 percent of the federal workforce through attrition, effectively cut federal employees’ pay by raising their contribution levels to their pensions, required less generous premium calculations for retirees in the Federal Employees Health Benefits Program and limited the rate of return on the Thrift Savings Plan’s government securities (G) fund.  

Instead, the final compromise document, negotiated between budget committee leaders in the House and Senate, assumed Congress would save $194 billion from cuts to federal employees and retirees in the future, but did not mandate the reductions or list specifics on how to accomplish that goal.

Feds are likely not out of the woods yet, as the budget represents just the tip of the iceberg in ways lawmakers can attack the workforce’s pay and benefits.

“The provisions in the budget will continue to come up as pay-fors in other legislation throughout this Congress,” Klement said. “It doesn't end here.”

(Image via fstockfoto / Shutterstock.com)

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