Larry Keenan Associates/Getty Images

House bill would extend pay freeze

GOP plan to finance payroll tax holiday also would require feds to contribute more to their pensions.

.
This story has been updated

House Republicans on Friday unveiled a payroll tax cut extension bill that includes an additional pay freeze for federal employees and lawmakers and increases the amount both groups contribute to their pensions.

The legislation extends the current two-year federal pay freeze through 2013 for federal workers and also applies to members of Congress.

In addition, the amount that federal employees and lawmakers contribute to their retirement pensions would increase beginning in 2013. Most employees in the Federal Employee Retirement System -- the majority the government workforce -- would see their pension contribution rate increase from 0.8 percent to 2.3 percent over three years, starting in 2013. For other special occupational groups and members of Congress, the increase would be a total of 1.5 percent -- from 1.3 percent to 2.8 percent during the same period.

The pension contribution rates for employees covered by the Civil Service Retirement System would increase from the current level of 7 percent to 8.5 percent over three years, starting in 2013. The employee contribution for special occupational groups and lawmakers also would go up by a total of 1.5 percent of salary over three years, beginning in 2013.

The legislation also changes the retirement structure for new federal employees hired after 2012, with less than five years of credible service for retirement purposes. That group would contribute 4 percent to their pensions, a rise of 3.2 percent from the current 0.8 percent level. The employee contribution for special occupational groups and lawmakers would increase by a total of 3.2 percent, from 1.3 percent to 4.5 percent.

Additionally, the measure subjects new hires to a high-five average salary calculation for annuities rather than the current high-three average pay calculation. Existing CSRS and FERS employees still would operate under the high-three calculation.

The package also eliminates the FERS minimum supplement for individuals not subject to mandatory retirement beginning in 2013. Individuals subject to mandatory retirement include certain categories of employees such as law enforcement, firefighters, air traffic controllers and nuclear materials couriers. Under current law, the FERS minimum supplement is paid to these employees and to federal employees who retire before age 62. The FERS minimum supplement represents the amount employees would have received from Social Security if they were 62 years old on the day they retired, and is paid until they reach age 62 and begin receiving Social Security payments. House Republicans estimate that the extended pay freeze and the changes in the federal retirement system will save $62 billion. A vote on the bill is expected next week.

Republicans stressed that the payroll tax extender plan is a balanced package that is offset by necessary spending cuts and includes provisions providing tax relief to many Americans and businesses while protecting Social Security. The legislation also aims to create more jobs by expediting a decision on the Keystone XL energy pipeline, requiring the permit to be granted within 60 days of the bill's enactment unless President Obama determines the project is not in the nation's interest.

Federal employee unions criticized the proposals affecting federal pay and benefits to finance the payroll tax holiday. Colleen Kelley, president of the National Treasury Employees Union, called the legislation "the most anti-worker bill yet to come out of this Congress."

The International Federation of Professional and Technical Engineers vowed to work on alternative ways to fund the payroll tax cut extension. Matt Biggs, IFPTE's legislative and political director, called the Republican proposal "just another example of the GOP not allowing an opportunity to take a swipe at federal employees pass them by."

John Gage, president of the American Federation of Government Employees, said the plan hurts people with vital government jobs. "This is a plan designed to raise taxes on the VA nursing assistants who care for wounded warriors, the Defense civilian employees who support our military troops at home and abroad, the Social Security claims representatives who process benefit payments to our nation's seniors and the many thousands of employees who protect our borders, skies, food supply and infrastructure."

Carl Goldman, executive director of the American Federation of State, County and Municipal Employees Council 26, said the bill shows House Republicans are carrying water for the wealthy.

"This is class warfare, plain and simple," Goldman said. "Instead of supporting the Senate Democrats efforts to impose a surtax on millionaires, they prefer to attack the pay and retirement of hard-working federal employees."

A two-year pay freeze on civilian employees, supported by many lawmakers and President Obama, took effect in January. The administration has estimated that the current two-year pay freeze will save $2 billion by the end of 2011, and more than $60 billion over the next decade. Obama also has called for an increase in the amount that federal workers contribute to their pensions as part of deficit reduction.

Senate Republicans proposed extending the payroll tax holiday by instituting a five-year pay freeze on feds and reducing the government workforce through attrition. That measure, however, failed overwhelmingly twice.

Senate Democrats released a payroll tax cut extension plan that did not include proposals reducing federal employees' pay or benefits. They would have paid for the measure in part by levying a surtax on millionaires and increasing the fees that Fannie Mae and Freddie Mac charge mortgage lenders to guarantee repayment of loans. That bill failed to garner the 60 votes needed to overcome a filibuster.

Many Democrats, including Obama, have not spoken out directly against proposals to pay for the tax cut via a longer freeze on federal salaries or a reduction of the government workforce. Some members who represent federal workers, including Rep. Chris Van Hollen, D-Md., and Sens. Ben Cardin and Barbara Mikulski of Maryland have voiced opposition to proposals that would affect federal pay and benefits. The White House in two statements said that it opposed the Senate GOP legislation, but did not specifically single out for criticism the proposed pay freeze or workforce downsizing recommendations.

Proposals to reduce federal employees' pay and benefits are not unexpected. Many lawmakers have introduced during this congressional session several pieces of stand-alone legislation that would downsize the federal workforce, extend the civilian pay freeze and increase employees' contributions to their pensions, among other recommendations.

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.