Democrats: Leave federal employee health plan out of deficit deal

Sen. Daniel Akaka, D-Hawaii, opposes benefit reductions for federal employees. Sen. Daniel Akaka, D-Hawaii, opposes benefit reductions for federal employees. Caleb Jones/AP File Photo

Several Democratic lawmakers plan to reject any deficit reduction proposal that targets federal employees’ benefits, Government Executive has learned.

While some plans have called for cuts in civil servants’ compensation, including changes to the Federal Employees Health Benefits Program, Democrats in Congress said federal workers should not be targeted to reduce the nation’s debt.

“Sen. [Daniel] Akaka opposes using any employee benefit as a pay-for because federal workers are already sacrificing with the pay freeze and changes to annuity contributions for new employees,” Jesse Broder Van Dyke, a spokesman for the Hawaii Democratic senator, told Government Executive.

Akaka, chairman of the Senate Homeland Security and Governmental Affairs Subcommittee on Oversight of Government Management, is retiring at the end of the year but will have an opportunity to oppose benefits reductions if they come up during the lame-duck session, as lawmakers seek to find savings to avoid the across-the-board cuts set to kick in on Jan. 2, 2013.

The much-discussed Simpson-Bowles budget plan, commissioned by President Obama and released in December 2010, recommended turning FEHBP into a “defined contribution premium support plan that offers federal employees a fixed subsidy that grows by no more than [gross domestic product] plus 1 percent each year.”

The commission estimated that plan would save the government $18 billion during a 10-year period.

A Congressional Budget Office report released earlier in November estimated that “adopt[ing] a voucher plan and slow[ing] the growth of federal contributions for the Federal Employees Health Benefits program” would save $5 billion in the year 2020.

In his budget, Rep. Paul Ryan, R-Wis., called for a pay freeze and unspecific changes to reduce the costs of federal benefits. “Federal workers deserve to be compensated equitably for their important work, but their pay levels, pay increases and fringe benefits should be reformed to better align with those of their private sector counterparts,” it stated.

Rep. Elijah Cummings, D-Md., ranking member of the House Oversight and Government Reform Committee, told Government Executive he thinks federal employees have paid their fair share.

“Federal workers have already sacrificed tens of billions of dollars over the past several years toward reducing the deficit,” Cummings said. “House Republicans should stop treating middle-class federal employees like a piggy bank they can raid without asking the wealthiest Americans to contribute their fair share. If we’re serious about resolving the fiscal cliff, we must take a balanced approach that includes both increased revenue and targeted spending cuts while protecting middle-class American workers.”

Ryan’s office did not respond to a request for comment.

Cummings’ counterpart, Rep. Darrell Issa, R-Calif., the committee’s chairman, declined to speculate on what may or may not be a part of a deficit reduction deal.

Walton Francis, an independent consultant and author of Consumer's Checkbook  Guide to Health Plans for Federal Employees, said the federal government currently pays 70 percent of its employees’ health care premiums, which is “right square in the middle” of what large, private sector employers pay their for their employees’ care.

“It would be an arbitrary cut,” Francis said. “There’s no reason per se to make that reduction.”

Francis added that while some may favor such a cut, it could have the unintended consequence of motivating lower income federal workers to opt out of FEHBP in favor of the open-market exchange, which could in turn increase costs to the government. 

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

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

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.


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