Republicans propose federal pension hikes to fund student loan program

zimmytws/Shutterstock.com

House Republicans have proposed increasing federal retirement contributions by 1.2 percent over the next three years to pay for a one-year extension of the reduced interest rate for student loans.

In a letter to President Obama dated Thursday, Republicans from both chambers of Congress rejected Senate Democrats’ proposal to pay for a one year extension of a reduced interest rate for subsidized Stafford student loans with a tax hike on small businesses. Republicans suggested three alternatives to the tax hike, the first of which targets federal employees’ pension contributions.

“We believe our alternative is reasonable and responsible, but in the interest of finding common ground,” Republican lawmakers wrote.

Under the proposal, those in the Civil Service Retirement System and those in the Federal Employees Retirement System would contribute 0.4 percent more to their pensions in calendar years 2012 through 2015. This would add up to a 1.2 percent increase over current contribution levels. The House passed a bill earlier this month that includes a 5 percent pension hike phased in over five years for CSRS and FERS employees.

Both the National Treasury Employees Union and the American Federation of Government Employees asked the White House to reject the proposal, calling it another attack on federal employees from congressional Republicans. “Pension contribution increases amounting to $15 billion in additional revenue were recently enacted to offset a temporary extension of unemployment benefits. Federal employees have done more than their share to help address our budget shortfalls; shortfalls that were not caused by them,” NTEU President Colleen Kelley said in a letter to the president.

AFGE President John Gage called the proposal an “unjustified income tax” in his letter to the White House. “Not only is federal retirement entirely unrelated to student loan interest rates, requiring federal employees to pay more for their retirement benefit is nothing more than an unjustified income tax increase on one small segment of the population, the working and middle class Americans who make up the federal government’s workforce,” Gage wrote.

(Image via zimmytws /Shutterstock.com)

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
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 G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

    Download
  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

    Download
  • Federal IT Applications: Assessing Government's Core Drivers

    In order to better understand the current state of external and internal-facing agency workplace applications, Government Business Council (GBC) and Riverbed undertook an in-depth research study of federal employees. Overall, survey findings indicate that federal IT applications still face a gamut of challenges with regard to quality, reliability, and performance management.

    Download
  • PIV- I And Multifactor Authentication: The Best Defense for Federal Government Contractors

    This white paper explores NIST SP 800-171 and why compliance is critical to federal government contractors, especially those that work with the Department of Defense, as well as how leveraging PIV-I credentialing with multifactor authentication can be used as a defense against cyberattacks

    Download
  • Toward A More Innovative Government

    This research study aims to understand how state and local leaders regard their agency’s innovation efforts and what they are doing to overcome the challenges they face in successfully implementing these efforts.

    Download
  • From Volume to Value: UK’s NHS Digital Provides U.S. Healthcare Agencies A Roadmap For Value-Based Payment Models

    The U.S. healthcare industry is rapidly moving away from traditional fee-for-service models and towards value-based purchasing that reimburses physicians for quality of care in place of frequency of care.

    Download
  • GBC Flash Poll: Is Your Agency Safe?

    Federal leaders weigh in on the state of information security

    Download

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