House Democrats: Don’t cut federal pay and benefits

More than a dozen House lawmakers are calling on their colleagues to avoid cutting federal pay and benefits to finance an extension of the payroll tax cut.

Rep. Elijah Cummings, D-Md., along with 16 other House Democrats, sent a letter Wednesday to Sen. Max Baucus, D-Mont., urging the payroll tax cut extension conference committee to reject any provisions that would reduce federal compensation to finance a final legislative deal. Cummings is the ranking member of the House Oversight and Government Reform Committee, and Baucus is the leading Democrat on the conference committee negotiating the payroll tax cut extension.

Federal employees already have sacrificed in the name of deficit reduction, the letter stated, specifically mentioning the current two-year federal pay freeze. "Federal workers are also facing the possibility of furloughs and layoffs in the coming years as automatic spending reductions mandated by the Budget Control Act of 2011 reduce budgets for agency discretionary salaries and expense accounts," the letter stated. "Subjecting these dedicated public servants to additional pay cuts and retirement benefit reductions in order to pay for such expenditures as a payroll tax cut for all middle-class Americans is unfair and illogical, particularly as the vast majority of federal workers are middle-income earners as well."

Further cuts in compensation also could hurt the government's ability to recruit and retain a talented workforce, the lawmakers said. The letter objected to reductions in current employees' benefits as well as to a proposal that would increase the amount new hires would contribute to their pensions.

"These members of Congress represent many thousands of federal employees and they are well aware of the significant contributions these dedicated working men and women make to our nation," said Colleen M. Kelley, president of the National Treasury Employees Union. "Every federal employee welcomes their support."

Congress agreed to a two-month payroll tax cut extension before it left for recess in December. That deal did not include any provisions affecting federal workers' compensation, but the House-passed bill contains several such measures and some could find their way into the conference committee's final deal.

The cost of extending the payroll tax cut extension, unemployment insurance, and averting cuts in Medicare reimbursement fees to physicians through 2012 is about $160 billion. The House-passed bill estimates the proposals reducing federal pay and benefits would save about $65 billion.

Among the federal compensation provisions the conferees are considering to pay for the extensions:

  • A one-year extension of the current two-year pay freeze for federal civilian workers and lawmakers.
  • An increase in the amount federal employees and members of Congress contribute to their pensions. The increase would total 1.5 percent and be phased in over three years beginning in 2013.
  • Eliminating the Federal Employees Retirement System minimum supplement for individuals not subject to mandatory retirement starting in 2013. Individuals subject to mandatory retirement include certain categories of employees such as law enforcement, firefighters, air traffic controllers and nuclear materials couriers. Under current law, the FERS minimum supplement is paid to these employees and to federal employees who retire before age 62. The FERS minimum supplement represents the amount employees would have received from Social Security if they were 62 years old on the day they retired, and it is paid until they reach age 62 and begin receiving Social Security.
  • Changes in the retirement structure for new federal employees hired after 2012 and with fewer than five years of creditable service for retirement purposes. Federal workers in that group would contribute 4 percent to their pensions, an increase of 3.2 percent from the current 0.8 percent level. The employee contribution for special occupational groups and lawmakers would increase by a total of 3.2 percent, from 1.3 percent to 4.5 percent.
  • A high-five average salary calculation for annuities for new hires rather than the current high-three average pay calculation. Existing Civil Service Retirement System and FERS employees still would operate under the high-three calculation.

House and Senate conferees tentatively plan to meet again Feb. 1.

In addition to Cummings, the House Democratic lawmakers who signed the letter were: Bruce Braley of Iowa, William Lacy Clay of Missouri, Gerald Connolly of Virginia, Danny Davis of Illinois, Donna Edwards of Maryland, Dennis Kucinich of Ohio, Stephen Lynch of Massachusetts, Carolyn Maloney of New York, James McGovern of Massachusetts, Jim Moran of Virginia, Eleanor Holmes Norton of the District of Columbia, John Sarbanes of Maryland, Adam Schiff of California, Bennie Thompson of Mississippi, Edolphus Towns of New York, and Lynn Woolsey of California.

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