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

Another Shutdown Watch, Potential RIFs, Rescinding Bonuses and More

There’s a lot of anxiety about the Trump administration’s budget plan for 2018, but a more immediate issue for federal employees is the 2017 budget. Agencies are funded only through April 28 under a continuing resolution passed last year. If lawmakers can’t reach agreement on a spending package before then, we’re looking at another government shutdown.

While some lawmakers from both parties seem eager to avoid a showdown over spending for the remainder of the fiscal year, President Trump threw Congress a curveball with his request to cut $18 billion from non-defense agencies to help offset the $30 billion boost he wants to give the Pentagon before Sept. 30. (That’s in addition to $3 billion in extra funding he wants to give Homeland Security, in part to start building a wall on the border with Mexico.)  

As Eric Katz reported today:

Such a hit with just five months to absorb it would wreak havoc across the government, with agencies likely turning to continued hiring freezes and furloughs to meet the reduced funding levels.

To help agencies prepare for the potential impact of severe budget cuts, the Office of Personnel Management this week issued new guidance...

Budget Cuts, a Retirement Scam, the Latest on the 2018 Pay Raise, and More

President Trump’s much-anticipated “skinny budget” released last week followed through on the new administration’s promise of substantial spending cuts in most areas except defense and border security. The budget blueprint unveiled Thursday would -- as expected -- boost Defense Department spending by $54 billion and Homeland Security by $2.8 billion. These increases would be offset by reductions elsewhere in the budget; 19 agencies would be eliminated entirely.

While the level of spending cuts outlined for civilian agencies in Trump’s plan would almost certainly require furloughs and layoffs, the budget document did not get into much detail about exactly how many federal jobs were on the line, with one big exception. The Environmental Protection Agency’s proposed 31 percent decrease over fiscal 2017 enacted spending levels would lead to the elimination of about 3,200 positions, the blueprint stated.

To see how much money your agency is slated to lose under Trump’s plan, click here. Keep in mind that the budget process is just getting underway and presidents’ proposals are just that – proposals. Congress must still approve the new spending levels for both fiscal 2018 and the dramatic reductions Trump also proposed for the remainder of this year...

Looming Budget Cuts, New Education Benefits and More

Federal employees are bracing for news about the administration’s plans for the federal workforce contained in President Trump’s 2018 budget, the thumbnail version of which is set to be released early Thursday. Deep cuts appear to be in the offing, perhaps most notably at the Environmental Protection Agency, given the administration’s antipathy for the agency’s mission. In anticipation, hundreds of EPA employees took to the streets Wednesday to protest expected funding cuts. Other agencies are in the line of fire, including the State Department and the Housing and Urban Development Department.

While the president’s proposals will certainly meet hurdles from Democrats and some Republicans on Capitol Hill, the administration’s pledge to dismantle the administrative state has rattled many. Trump wants to cut $54 billion from civilian agencies in 2018 and use the money to bolster Defense. As Eric Katz reported earlier this week, that figure needs to be considered within the broader context of the 2011 Budget Control Act, not current spending. As a result, the cuts are much more severe than many people understand, in part because the BCA budget caps are set to resume in 2018.

While resistance from Democrats is guaranteed...

The Return of Furloughs, Suspending G Fund Investments and More

Military bases continue to feel the effects of President Trump’s hiring freeze. Commissaries are starting to experience longer lines, the Military Times reports, and military exchange service hours have been reduced at some facilities.

Lawmakers are attempting to mitigate the effects of the freeze by advocating more exemptions and ensuring that agencies are taking advantage of existing carve-outs. Reps. Jason Chaffetz, R-Utah, and Mark Meadows, R-N.C., have asked acting Army Secretary Robert Spicer to take steps to ensure all child care positions at military bases are approved for exemptions promptly. Rep. Stephen Lynch, D-Mass., introduced a measure to exempt from the moratorium any veteran applying for a civilian job. Lynch pushed his bill again in a March 8 letter to Trump signed by 23 House Democrats.

“Congress and the federal government must work together to improve the quality of care and employment opportunities for the men and women who dutifully served our country,” Lynch said in a statement Wednesday.  “A hiring freeze does the opposite by closing the doors of the federal government, our nation’s largest single employer of veterans, to our returning service members.” 

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TSP’s Winning Streak and Other Good News

February continued a solid growth streak for the Thrift Savings Plan, with all of its funds ending the month in the black. Common stocks in the C Fund were the top performers for the month, increasing 3.97 percent. They were up 5.95 percent for 2017.

Here are the details for the other funds:

  • The small and midsize companies represented in the S Fund were the second-highest earners last month, growing 2.45 percent. They were up 4.66 percent for the year to date. International stocks in the I Fund grew 1.44 percent in February and 4.37 percent for 2017.  
  • The more stable but lower growth fixed income bonds in the F Fund gained 0.71 percent last month and 0.94 percent for this year, while the government securities in the G Fund ended February up 0.18 percent. The G Fund has grown 0.38 percent for the year so far.
  • TSP’s lifecycle (L) funds -- which move investors to a less risky portfolio as they near retirement -- had a similarly strong performance in February. L Income, for those who have already started withdrawing money, increased 0.77 percent; L 2020 was up 1...