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Key developments in the world of federal employee benefits: health, pay, and much more.

Pay and Benefits Roundup


Another week, another round of legislative proposals aimed at reducing federal compensation. Government workers no doubt are wishing for another sort of round right about now. In fact, you could concoct a drinking game around how many times these days you hear the following from someone in Washington: “pay freeze,” “shared sacrifice,” “scapegoat,” “overly generous pensions,” “deficit reduction.” OK, stop drinking, because the list goes on and on -- and so do the proposals targeting federal pay and benefits in the name of deficit reduction. Here’s a roundup of some of the measures on the table:

  • H.R. 3630: The House in December 2011 passed its version of the payroll tax cut extension, which included several provisions reducing federal compensation in an effort to finance the tax holiday and unemployment insurance for a year. Among the provisions: a one-year extension of the current federal pay freeze; an increase in the amount feds and lawmakers contribute to their pensions beginning in 2013; elimination of the Federal Employees Retirement System minimum supplement for individuals not subject to mandatory retirement starting in 2013; and a high-five average salary calculation for annuities rather than the current high-three average pay calculation for new hires after Dec. 31, 2012. The Senate rejected that bill, and Congress agreed to a two-month tax cut extension to give House-Senate conferees an opportunity to figure out how to pay for the tax holiday for the remainder of 2012. The conference committee has until the end of February to hammer out a deal, and so far negotiations aren’t going so well. The provisions affecting feds are still on the table -- in particular the pay freeze extension -- and the other measures have found their way into other pieces of legislation.
  • H.R. 3813: The House Oversight and Government Reform Committee Tuesday evening approved a bill that would require federal workers and members of Congress to contribute a total of 1.5 percent extra over three years beginning in 2013 to their pensions. Other measures in the legislation include: elimination of a current provision in the law that supplements the retirement benefits of feds not subject to mandatory retirement who are covered under FERS and retire before age 62, a.k.a., the FERS annuity supplement; and a requirement that those hired (or newly elected) after Dec. 31, 2012, are placed under a high-five average salary calculation for annuities rather than the current high-three average pay calculation.
  • H.R. 7: The 2012 American Energy and Infrastructure Jobs Act, also known as the highway bill, contains provisions from H.R. 3813, including an increase in the amount federal employees contribute to their -- you guessed it -- pensions. The massive transportation bill also would place federal employees hired after Dec. 31, 2012, as well newly elected lawmakers under a high-five average salary calculation for annuities rather than the current high-three average pay calculation.
  • H.R. 3835: The House last week passed a bill sponsored by Rep. Sean Duffy, R-Wis., that would extend the current federal pay freeze through 2013. It also would apply to members of Congress, which many Democrats have decried as a political ploy to force lawmakers into the uncomfortable position of either voting for a prolonged pay freeze affecting civilian employees or voting against a freeze on their own salaries.
  • S. 2065: Introduced last week by a group of high-profile GOP senators, including John McCain of Arizona, this bill would extend the federal pay freeze for two additional years and reduce the size of government by 5 percent through attrition. The legislation is designed to stave off cuts to the Defense Department budget if sequestration takes effect in 2013. The Pentagon already is slashing more than $400 billion from its budget and will have to find another $500 billion in savings during the next decade if across-the-board automatic spending cuts take effect next year as mandated by the 2011 Budget Control Act.
  • H.R. 3844: Rep. Martha Roby, R-Ala., introduced a bill last week that would prohibit step increases for federal employees who currently are subject to a pay freeze. The provision, tucked into larger legislation aimed at improving transparency within the appropriations process, would prevent federal workers from receiving within-grade step increases through the end of 2012. If enacted, it would mean extra pain for federal employees during the second year of the federal pay freeze; the current salary freeze does not affect pay boosts as a result of within-grade step increases or promotions.

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.

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