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

An Insatiable Appetite for Pay and Benefits Cuts


There are many issues the 112th Congress is loath to tackle, but federal employees’ pay and benefits isn’t one of them.

It seems the start of each season ushers in a raft of new proposals from lawmakers seeking to further freeze federal salaries, downsize the workforce or require government employees to contribute more toward their pensions. In the past month, there have been at least half a dozen such proposals pending in both chambers. Summer doesn’t officially begin until June 21, but we’re counting Memorial Day as the unofficial launch of the season. After all, Congress goes on vacation in August -- a hiatus federal employees no doubt are looking forward to.

We’ve compiled a roundup of the latest developments on Capitol Hill affecting federal pay and benefits. It’s not comprehensive, so if there’s something we’ve missed, let us know:

  • The House fiscal 2013 Financial Services and General Government appropriations bill does not include a provision regarding a federal pay raise, effectively extending the current two-year civilian pay freeze. An appropriations subcommittee approved the legislation by a voice vote Wednesday, and it’s likely the bill will make it through the House without the 0.5 percent pay raise President Obama recommended for federal employees in 2013.
  • Last week the House passed legislation that would prolong the pay freeze for some employees at the Defense and Veterans Affairs departments by cutting funds that otherwise would have gone toward the 0.5 percent civilian pay raise that Obama requested for 2013. The Military Construction and Veterans Affairs appropriations bill reduces civilian personnel spending by $2.3 million and cuts VA spending that would have gone for raises by nearly $100 million. The White House has threatened to veto the legislation.
  • Congressional Republicans want to increase the amount feds contribute to their pensions to pay for yet another federal program. Student loan interest rates are set to double on July 1; Obama and lawmakers have been looking for ways to extend the reduced interest rate through offsetting the costs of the program elsewhere. In a May 31 letter to Obama, Republicans proposed increasing the amount government employees contribute to their defined benefit plans by a total of 1.2 percent over the next three years. Democrats recommended a tax hike on small businesses to pay for the interest rate reduction. The White House has not yet responded to the GOP proposal, but the administration supported increasing feds’ pension contributions in its fiscal 2013 budget.

    Don’t forget that earlier in May the House passed a bill requiring current federal workers to pay 5 percent more toward their retirement, with the increase introduced incrementally over the next five years, beginning in 2013. The Senate has not taken up that measure yet.
  • The Senate on Tuesday rejected the 2012 Paycheck Fairness Act, which aims to broaden protections for women in the workplace and narrow the pay gap between the genders through various initiatives. The pay gap between women and men working in the federal government is narrower than it is in the private sector overall, but female feds still would have benefited from the legislation. The bill failed to garner the 60 votes necessary to overcome a filibuster in the Senate and bring it to a floor vote.
  • The Senate Armed Services Committee this week approved an amendment to the fiscal 2013 National Defense Authorization Act that caps the federal reimbursement to defense contractors for all salaries at $230,700 per employee. Under current law and regulations that the Obama administration updated in April, contractors are reimbursed for salaries as high as $763,029.

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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