Legislation extending payroll tax holiday also would increase amount feds contribute to their pensions.
The House plans to vote Tuesday afternoon on tax relief legislation that would extend the federal pay freeze and require government workers to contribute more to their pensions.
H.R. 3630, the Middle-Class Tax Relief and Job Creation Act, is expected to pass the House but its fate remains uncertain in the Senate. The legislation, which extends the payroll tax holiday, prolongs the current two-year federal pay freeze through 2013 for federal workers and also applies to members of Congress.
In addition, the bill would increase the amount that federal employees and lawmakers contribute to their retirement pensions beginning in 2013. Most employees in the Federal Employee Retirement System would see their pension contribution rate increase from 0.8 percent to 2.3 percent over three years, starting in 2013, while those covered by the Civil Service Retirement System would see an increase from the current level of 7 percent to 8.5 percent during that same period. Click here for a list of other provisions affecting federal workers.
Federal employee unions and other advocates have criticized the measures affecting pay and benefits, calling them an attack on government workers. On Monday, some unions met with the staff of House Minority Leader Steny Hoyer, D-Md., to discuss the bill, and the unions expressed concern over the proposals related to federal employees.
"I've been assured that Steny Hoyer is really standing behind federal employees," said one union representative who attended the meeting and called it "friendly." But the attendee said Hoyer's staff did not make any promises regarding H.R. 3630 or the provisions affecting federal workers. Nevertheless, "It's good to have a friend like Steny Hoyer," the union representative said.
Hoyer's office confirmed the meeting and said congressman will vote against the Republican plan, which he strongly opposes.
The Federal Workers Alliance, a coalition of 22 labor unions representing more than 300,000 federal employees, is urging government workers to call lawmakers and tell them to prevent an extended pay freeze and reductions in retirement benefits to finance the payroll tax holiday. "Though FWA members ardently support extending the payroll tax cut, we believe it is unfair to target federal workers for further cuts when they have already sacrificed immensely to reduce the deficit," the alliance said a statement.
Republicans have 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.
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