Pay & Benefits Watch Pay & Benefits WatchPay & Benefits Watch
Key developments in the world of federal employee benefits: health, pay, and much more.

It Could Get Worse

The failure of the so-called congressional super committee to reach a deficit reduction deal by its Nov. 23 deadline temporarily spared federal employees from further pay and benefits pain. Any agreement likely would have included an increase in the amount individual feds contribute to their pensions -- a proposal with bipartisan support. But the failure of that panel to achieve consensus on spending cuts sets up a potentially worse scenario for federal workers who are worried about their salaries, retirement benefits and health care.

Because of the super committee's disintegration, federal employees should heed two words: Simpson-Bowles. That's the name of another fiscal commission that has received a lot of attention in the past year and that originated many of the deficit reduction proposals.

In 2010, the bipartisan fiscal commission, created by President Obama and led by former Republican Sen. Alan Simpson from Wyoming and former White House Chief of Staff Erskine Bowles, released their deficit reduction recommendations, a few of which would affect the pay and benefits of federal workers. Arguably some of those proposals would have a greater impact on federal pay and benefits than an increase in individual pension contributions rates. Among the Simpson-Bowles recommendations:

Extended pay freeze: The panel recommended a three-year civilian pay freeze across government. The commission estimated it would save $20.4 billion in 2015. The plan also freezes lawmakers' pay. Congress has opted to freeze its own pay for the last few years anyway. In fact, news reports Wednesday said Senate Republicans were considering continuing the two-year federal civilian pay raise to pay for an extension of the payroll tax cut and cited Simpson-Bowles as a proponent of the idea.

Reducing the size of the federal workforce through attrition: The Simpson-Bowles report recommends shrinking the government rolls by 10 percent, by hiring two new workers for every three employees who leave service. The commission claims such a reduction would save $13.2 billion in 2015. This proposal has some momentum behind it. In November, the House Oversight and Government Reform Committee approved a bill that calls for hiring one federal employee to replace every three workers who retire or leave their job, shrinking the workforce across-the-board by 10 percent by 2015. The Hill newspaper reported Wednesday that Republicans support such a reduction to help pay for an extension of the payroll tax holiday.

Increased health care contributions: The panel suggested an increase in the amount of money federal employees pay in premiums under the Federal Employee Health Benefits Program.

The Simpson-Bowles commission also proposed reducing federal travel and vehicle budgets, which the Obama administration already has begun to target. The panel supported greater use of telecommuting, which could be a boon for many feds who would like that benefit but don't currently have the option to work off-site.

It's unclear whether Congress or the administration will accept any or all of these proposals. Since the super committee's flame-out, there has been talk of Congress voting on the recommendations of the Simpson-Bowles commission; indeed, many of the ideas reportedly discussed by members of the joint panel on deficit reduction originated with Simpson-Bowles.

The likelihood of an up-and-down vote on the entire report though is not high, since there are recommendations that are unpalatable to both parties. But several suggestions, including those affecting federal pay and benefits, could be fleshed out in stand-alone legislation or bundled into a larger legislative package. And this could all happen well before -- and separate from -- the across-the-board automatic spending cuts that go into effect in 2013 as a result of the super committee failure and could result in layoffs and furloughs at government agencies.

If any of these scenarios play out, federal employees will find themselves missing the super committee.


Kellie Lunney covers federal pay and benefits issues, the budget process and financial management. After starting her career in journalism at Government Executive in 2000, she returned in 2008 after four years at sister publication National Journal writing profiles of influential Washingtonians. In 2006, she received a fellowship at the Ohio State University through the Kiplinger Public Affairs in Journalism program, where she worked on a project that looked at rebuilding affordable housing in Mississippi after Hurricane Katrina. She has appeared on C-SPAN’s Washington Journal, NPR and Feature Story News, where she participated in a weekly radio roundtable on the 2008 presidential campaign. In the late 1990s, she worked at the Housing and Urban Development Department as a career employee. She is a graduate of Colgate University.

Close [ x ] More from GovExec

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

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

  • The Big Data Campaign Trail

    With everyone so focused on security following recent breaches at federal, state and local government and education institutions, there has been little emphasis on the need for better operations. This report breaks down some of the biggest operational challenges in IT management and provides insight into how agencies and leaders can successfully solve some of the biggest lingering government IT issues.

  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.

  • Ongoing Efforts in Veterans Health Care Modernization

    This report discusses the current state of veterans health care


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