Republicans propose federal pension hikes to fund student loan program

zimmytws/Shutterstock.com

House Republicans have proposed increasing federal retirement contributions by 1.2 percent over the next three years to pay for a one-year extension of the reduced interest rate for student loans.

In a letter to President Obama dated Thursday, Republicans from both chambers of Congress rejected Senate Democrats’ proposal to pay for a one year extension of a reduced interest rate for subsidized Stafford student loans with a tax hike on small businesses. Republicans suggested three alternatives to the tax hike, the first of which targets federal employees’ pension contributions.

“We believe our alternative is reasonable and responsible, but in the interest of finding common ground,” Republican lawmakers wrote.

Under the proposal, those in the Civil Service Retirement System and those in the Federal Employees Retirement System would contribute 0.4 percent more to their pensions in calendar years 2012 through 2015. This would add up to a 1.2 percent increase over current contribution levels. The House passed a bill earlier this month that includes a 5 percent pension hike phased in over five years for CSRS and FERS employees.

Both the National Treasury Employees Union and the American Federation of Government Employees asked the White House to reject the proposal, calling it another attack on federal employees from congressional Republicans. “Pension contribution increases amounting to $15 billion in additional revenue were recently enacted to offset a temporary extension of unemployment benefits. Federal employees have done more than their share to help address our budget shortfalls; shortfalls that were not caused by them,” NTEU President Colleen Kelley said in a letter to the president.

AFGE President John Gage called the proposal an “unjustified income tax” in his letter to the White House. “Not only is federal retirement entirely unrelated to student loan interest rates, requiring federal employees to pay more for their retirement benefit is nothing more than an unjustified income tax increase on one small segment of the population, the working and middle class Americans who make up the federal government’s workforce,” Gage wrote.

(Image via zimmytws /Shutterstock.com)

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

    Download
  • Cyber Risk Report: Cybercrime Trends from 2016

    In our first half 2016 cyber trends report, SurfWatch Labs threat intelligence analysts noted one key theme – the interconnected nature of cybercrime – and the second half of the year saw organizations continuing to struggle with that reality. The number of potential cyber threats, the pool of already compromised information, and the ease of finding increasingly sophisticated cybercriminal tools continued to snowball throughout the year.

    Download
  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

    Download
  • GBC Issue Brief: The Future of 9-1-1

    A Look Into the Next Generation of Emergency Services

    Download
  • GBC Survey Report: Securing the Perimeters

    A candid survey on cybersecurity in state and local governments

    Download
  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

    Download
  • eBook: State & Local Cybersecurity

    CenturyLink is committed to helping state and local governments meet their cybersecurity challenges. Towards that end, CenturyLink commissioned a study from the Government Business Council that looked at the perceptions, attitudes and experiences of state and local leaders around the cybersecurity issue. The results were surprising in a number of ways. Learn more about their findings and the ways in which state and local governments can combat cybersecurity threats with this eBook.

    Download

When you download a report, your information may be shared with the underwriters of that document.