The Federal-Postal Coalition also called on lawmakers to provide a tax credit equal to the payroll tax cut to 600,000 government employees who are not eligible for the tax break because they do not receive Social Security benefits. Those federal workers covered by the Civil Service Retirement System do not pay into Social Security.
"Federal employees have worked diligently to serve the American people over the past year despite the repeated prospect of government shutdowns," the letter stated. "We urge you to avoid singling out this small group of workers to pay for a tax cut for all other workers."
House Republicans have not officially released their payroll tax cut extension plan, but it's likely they will this week. The GOP reportedly is considering extending the two-year federal pay freeze and other proposals affecting government workers to help finance the plan. The pay freeze on civilian employees, supported by many lawmakers and President Obama, took effect in January 2011. The administration has estimated that the current two-year pay freeze will save $2 billion by the end of this year, and more than $60 billion over the next decade.
The Federal-Postal Coalition argued that instituting a longer salary freeze on federal employees would undermine the economic recovery and impose further burdens on a largely middle-class population. The group also said feds are facing "the loss of their jobs based on funding cuts mandated by the debt ceiling agreement."
Senate Republicans proposed extending the payroll tax holiday by prolonging the pay freeze three years and reducing the government workforce through attrition. That measure, however, failed overwhelmingly. Senate Democrats also released a plan to extend the payroll tax cut, which did not include proposals reducing federal employees' pay or benefits. It would have paid for the measure partly by levying a surtax on millionaires and increasing the fees that Fannie Mae and Freddie Mac charge mortgage lenders to guarantee repayment of mortgage loans. That bill failed to garner the 60 votes needed to overcome a filibuster.
But Democrats, including Obama, have not spoken out directly against proposals to pay for the tax cut via a longer freeze on federal salaries or a reduction of the government workforce. The White House in a Dec. 1 statement said that it opposed the Republicans' legislation but did not specifically single out for criticism the proposed pay freeze or workforce downsizing recommendations.
Proposals to reduce federal employees' pay and benefits are not unexpected. Many lawmakers have introduced during this congressional session several pieces of stand-alone legislation that would downsize the federal workforce, extend the civilian pay freeze and increase employees' contributions to their pensions among other recommendations. The joint select committee on deficit reduction purportedly considered raising the amount employees pay into their pensions and moving from a high-three to a high-five average salary calculation for retirement benefits.
A vote is expected next week on the House GOP bill.