House Budget Committee Chairwoman Diane Black (R-Tenn.) during a hearing in May. (Jacquelyn Martin/AP)
The House budget proposal released Tuesday continues Republican efforts to cut federal employees’ compensation by making them pay more for retirement benefits.
Saying they seek “reforms to civil service pensions to put them on a better fiscal path,” the spending plan released by the House Budget Committee calls on staffers “to make greater contributions to their own defined benefit retirement plans.”
While the Republican’s “Plan for Fiscal Responsibility” did not provide details, it echoes previous proposals, including one offered by President Trump this year. He proposed increasing individual out-of-pocket payments toward retirement by one percentage point each year until they equal the government’s contribution for those in the Federal Employees Retirement System (FERS).
Over a six-year period, this would result in increased payments of about 6 percent. With no increase in benefits, that would equal a 6 percent drop in pay.
The budget “blueprint” assumes that the main panel overseeing federal employment in the House will take those steps to find the $32 billion in savings over 10 years that the blueprint would require.
The budget plan released by Committee Chairwoman Diane Black (R-Tenn.) also would end the “special retirement supplement,” which pays FERS employees “the equivalent of their Social Security benefit at an earlier age.”
“These plans put the ownership, flexibility, and portfolio risk on the employee as opposed to the employer,” the GOP document says. “Similarly, federal employees would have more control over their own retirement security under this option.”
Federal employee leaders sharply disagree.
“Slashing the pay and benefits of America’s civil servants while lining the pockets of the wealthiest of the wealthy is a shameful way to govern the country and is emblematic of everything that’s wrong with this horrible budget,” said J. David Cox Sr., president of the American Federation of Government Employees.
Unlike Trump’s proposals, the House plan does not mention basing federal pensions on the average of the high five years of salary, instead of the high three, which is now the case. Using more years in the calculation would lead to lower pensions.
There also is no mention of Trump’s plan to reduce or eliminate cost-of-living adjustments for those in FERS or the Civil Service Retirement System.
That’s not enough to make the Republican plan acceptable to Cox.
“The budget is a slap in the face to all of the workers who care for our veterans, guard our borders, support our military and keep our air and water clean,” he said. “Taking away retirement income from our law enforcement officers, many of whom are veterans, is particularly venomous.”
That House budget is the latest in a series of proposals from Republicans in recent years to increase required retirement contributions, which had resulted in two increases in recent years, although both applying only to employees hired after a future date.
Federal employees under the FERS system are covered by Social Security, for which they pay the standard 6.2 percent of salary contribution, plus a civil service annuity. Most pay 0.8 percent of salary toward that benefit, although those first hired in 2013 must pay 3.1 percent and those hired afterward pay 4.4 percent.
The White House budget plan would not require higher contributions by those covered under the other main federal retirement system, the Civil Service Retirement System. That program, generally applying only to those hired before 1984, now covers less than a 10th of the federal workforce.
The budget estimated that its formula would yield $72 billion in savings, more than twice what the Oversight and Government Reform Committee would have to produce under the pending House plan.
The retirement supplement mirrors Social Security benefits for those who retire before 62 and is paid until they turn that age and can begin collecting those benefits. That also has been the subject of numerous repeal proposals over the years.
The Obama administration also proposed increasing required retirement contributions several times, although only by 1.2 percentage points, and ending the supplement. However, it then dropped those proposals.