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

Sequestration Can’t Touch Certain Pay and Benefits

ARCHIVES

Way back in August 2011, a Maryland senator explained to a roomful of his constituents the benefits of an obscure budget procedure known as sequestration.

Democrat Ben Cardin held a town hall meeting with Census Bureau employees last summer in Suitland, Md., fielding questions from nervous feds on the issues du jour and how they would affect pay and benefits. The topics ranged from the debt ceiling; the then-looming government shutdown; the civilian pay freeze; proposals to increase feds’ pension contributions; and the deficit reduction options under consideration by the congressional super committee, now better known as the failure that could trigger sequestration.

During the town hall, Cardin pointed out that while the super committee could basically do whatever it wanted to in the name of deficit reduction, options were a lot more limited under sequestration as far as changes to federal pay, benefits and other programs exempt from the automatic, across-the-board governmentwide spending cuts. Cardin was one of the first lawmakers to rightly point out that, while sequestration is far from ideal for about 1,000 different reasons, at least there are some protections in place under the law for feds.

So, with a glass-half-full spirit, let’s recap. In the category of federal pay and benefits, which major programs are protected from spending cuts under sequestration?

  • Pay, sort of: This is a little tricky to wrap your mind around. Federal pay under a statutory pay system -- the General Schedule, for example -- is subject to spending cuts as are other administrative expenses within budgets. But the rates of pay for individual civilian and military employees cannot be reduced under sequestration. In other words, if an agency has to find more savings within its administrative accounts, which include employees’ salaries, then it can resort to furloughs or layoffs. A furloughed employee isn’t paid and isn’t guaranteed back pay. But the agency can’t indiscriminately slash an employee’s rate of pay to save money. So if you aren’t furloughed, your pay is protected, but if you are furloughed, all bets are off. Layoffs are more expensive for agencies, so the odds are furloughs will be much more popular than reductions-in-force in the event of sequestration. And don’t forget, a furlough of more than 30 calendar days, or of more than 22 discontinuous work days, is considered an RIF, according to the Office of Personnel Management.
  • Veterans’ benefits: Vets’ disability, health care, education and counseling benefits are protected. The Obama administration also has exempted the entire Veterans Affairs Department from sequestration.
  • Federal employees’ retirement benefits: The government’s payments to the Civil Service Retirement and Disability Fund are shielded.
  • Health care benefits of federal employees and retirees are exempt as well.
  • Military personnel: Under the law governing sequestration, the president can exempt military personnel accounts or reduce them by a lower percentage. President Obama this past summer told Congress that he would exempt military personnel accounts from sequestration. That means service members’ jobs, pay, allowances and retirement benefits are protected from sequestration if the cuts take effect Jan. 2, 2013. But TRICARE, the military’s health care program, is not immune to spending reductions. TRICARE, which is part of the Defense Health Program, falls under the Defense Department’s operations and maintenance kitty, which is subject to sequestration.

Note: This is not an exhaustive list, but rather the highlights. Read this Congressional Research Service report for a more in-depth look at federal programs exempt from sequestration.

And, ICYMI: Check out our poll on sequestration preparations across government.

Oh, sequestration. You’ve emerged from the backwater of a little-known 1985 law named after a trio of former lawmakers (Gramm, Rudman and Hollings) to take center stage in 2012 and possibly wreak havoc in 2013. We’ll be watching.

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.

FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

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

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

    Download
  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

    Download
  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

    Download
  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

    Download
  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

    Download
  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

    Download
  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

    Download
  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

    Download
  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

    Download
  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.

    Download

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