Government Could Save Billions By Reducing Federal Pay and Benefits

By Kellie Lunney

November 13, 2013

Some of the major proposals floated by lawmakers and the Obama administration to reduce the pay and retirement benefits of federal employees and service members would save the government at least $265 billion over the next decade, according to a new analysis from the nonpartisan Congressional Budget Office.

CBO detailed 103 policy options for decreasing government spending and increasing revenue over the next decade in a 305-page report released on Wednesday, including several that would affect the pay, benefits and size of the federal civilian and military workforce. The office does not make policy recommendations; it provides cost estimates of legislation and federal spending projections and analyses. The latest comprehensive report on options for reducing the deficit looks at possibilities for savings across a range of areas, including defense, health care, Social Security, taxes and veterans’ benefits, as well as federal employment.

Among the options affecting federal employees and military service members, CBO looked at:

In its analysis, CBO discussed the implications of several other deficit reduction options that would affect federal employees, military personnel and retirees including: shrinking the federal workforce through attrition, replacing some military workers with civilian employees, and introducing enrollment fees for military retirees age 65 and older covered under TRICARE for Life.

Eliminating Cabinet departments was another area CBO explored for potential long-term savings -- one that also would have a significant impact on federal workers and personnel costs. CBO broadly assessed how much the 15 Cabinet departments spend in four categories: grants and fixed charges, such as Medicare, military pensions, and vets’ health care; contractual services and supplies; personnel compensation and benefits; and acquisition of assets, including equipment and land. “Eliminating a department and transferring its programs elsewhere could yield savings in this category if total federal employment fell as a result of the transfer,” the report stated. The analysis looked in detail at possible costs and savings associated with getting rid of or transferring programs out of the departments of Commerce, Education and Energy -- the three departments most often cited for elimination by those who support the idea.

CBO published its report online the same day that Director Doug Elmendorf met publicly with the House-Senate budget conference committee to review the economic and budget outlook and answer lawmakers’ questions. At times, lawmakers pressed Elmendorf to give the committee recommendations on what they should do or to offer his views on specific policies, which he declined to do. He did, however, offer the panel a little general advice. “I think what I would say, are that big steps are better than small steps, but small steps are better than no steps at all, and no steps at all will be better than stepping backward,” Elmendorf said, closing with, “one should not make perfect the enemy of the good.”

(Image via larry1235/Shutterstock.com)


By Kellie Lunney

November 13, 2013

http://www.govexec.com/pay-benefits/2013/11/government-could-save-billions-reducing-federal-pay-and-benefits/73757/