Virginia Senator: Don’t Target Feds in Deficit Reduction Deal

By Kellie Lunney

November 25, 2013

A Virginia senator is urging the joint budget conference committee to avoid targeting the compensation of federal employees as part of a deficit reduction deal.

Democrat Tim Kaine, who also is a member of the budget panel, said federal workers already have contributed to fiscal belt-tightening through a three-year civilian pay freeze and furloughs resulting from sequestration and the 16-day government shutdown in October. “In addition, federal employees have contributed to deficit reduction efforts in past years, in terms of changes to the federal retirement system,” Kaine wrote in a Nov. 19 letter to Rep. Paul Ryan, R-Wis., and Sen. Patty Murray, D-Wash., the leaders of the budget conference committee. Congress in 2012 approved legislation that requires new federal hires to pay 2.3 percent more toward their government pensions.

In his letter, Kaine cited an October Senate Armed Services hearing with Defense Department officials whom he said “unequivocally reiterated that sequestration and furloughs have had a negative toll on morale for civilian and non-civilian federal employees.” Witnesses testified that “vital workers are questioning their value and considering the private sector as a result of an uncertain future,” Kaine wrote. The former Virginia governor, who represents a state with a large federal employee population, sent the letter after his office met with the Federal Workers Alliance last week, according to the International Federation of Professional and Technical Engineers, which attended the meeting. Virginia’s other senator, Democrat Mark Warner, and Democratic Rep. Chris Van Hollen of Maryland also sit on the budget conference committee.

Advocates of federal employees and retirees fear lawmakers will include a proposal to increase the amount federal workers contribute to their pensions in their budget deal. The groups’ concerns are well-founded because it’s an area of savings Republicans and the Democratic White House agree on. House Budget Committee Chairman Paul Ryan, R-Wis., in his fiscal 2014 budget plan, wants feds to pay 5.5 percent more of their salaries toward their defined benefit; he would also eliminate an additional benefit -- what’s known as the Federal Employees Retirement System Annuity Supplement -- for those government workers who retire before the age of 62 and who are not eligible for mandatory retirement. President Obama in his fiscal 2014 budget blueprint recommended that federal employees contribute 1.2 percent more of their pay, phased in at 0.4 percent over the next three years, toward their pensions. The White House estimated that the change would save the government $20 billion during the next decade. Obama also supports eliminating the FERS Annuity Supplement.

However, the Senate budget plan opposes further tinkering with federal employees’ pay and benefits. “Federal workers play a key role in running a smart and efficient government,” said the budget resolution crafted by Senate Budget Committee Chairwoman Patty Murray, D-Wash., also a budget conferee. “These workers have borne the brunt of recent deficit reduction efforts, with years of pay freezes and many workers facing furloughs in the coming months caused by the indiscriminate and untargeted sequestration cuts.” The document noted that the Republican budget would “further harm these workers by significantly increasing their contributions to the Federal Employees Retirement System, effectively cutting their take-home pay in every paycheck.”

The budget conferees are supposed to reconcile differences by December between the House and Senate fiscal 2014 budget plans -- currently about $91 billion apart. The lawmakers also are discussing how to deal with the next round of 10-year automatic spending cuts scheduled to take place on Jan. 15, 2014, when the current continuing resolution expires. The government will have to cut $109.3 billion from the budget under sequestration -- half from defense and half from non-defense -- in fiscal 2014 unless Congress agrees on an alternative.

The committee must submit its recommendations by Dec. 13, 2013. The two chambers, now in recess, are only scheduled to be in session together for one week before the end of the year. The House returns on Dec. 3, while the Senate comes back to work on Dec. 9.


By Kellie Lunney

November 25, 2013

http://www.govexec.com/pay-benefits/2013/11/virginia-senator-dont-target-feds-deficit-reduction-deal/74453/