Jack Corrigan | July 18, 2017 | 0 Comments

House GOP Takes Cue From Trump, Targets Federal Retirement

AFGE Local 704 union President Michael Mikulka speaks as Environmental Protection Agency (EPA) workers protest job cuts during rally in Chicago in March. AFGE Local 704 union President Michael Mikulka speaks as Environmental Protection Agency (EPA) workers protest job cuts during rally in Chicago in March. John Gress Media Inc / Shutterstock.com

The House Republican budget blueprint introduced Tuesday would reduce retirement benefits for federal employees in an effort to save billions of dollars over the next decade, mirroring some of the same cuts presented in President Trump’s budget in May. However, it does not spell out the changes in as much detail as Trump’s proposal, leaving that up to the House Oversight and Government Reform Committee.

The House resolution would require federal employees to contribute more to their own retirement funds, a deficit-reduction strategy that’s gained traction in recent years. Additionally, it would eliminate annuity supplements for retirees covered by the Federal Employees Retirement System who retire before they are eligible for Social Security benefits.

However, the proposal provides does not define the size of the contribution increase, nor does it stipulate which employees would no longer receive annuity supplements—all future retirees or only new hires.

This pushes the responsibility to the House Oversight and Government Reform Committee, the legislative body that oversees the federal workforce. In its budget, the House mandated the Oversight committee reduce the deficit by a minimum of $32 billion between fiscal 2018 and 2027, making the committee responsible for implementing retirement provisions as it sees fit.

The budget resolution garnered sharp criticism from Democrats and unions representing federal employees, who said it would disproportionately harm government workers.

“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,” said J. David Cox Sr., national president of the American Federation of Government Employees. “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.”

Congressman Elijah Cummings, D-Md., the top Democrat on the Oversight Committee, echoed this sentiment, saying, “The impact will degrade the federal civil service and undercut the critical services that the American people expect and deserve from the federal government.”

Jessica Klement, legislative director at the National Active and Retired Federal Employees Association, noted that eliminating FERS annuity supplements would leave law enforcement officers, firefighters and others with early mandatory retirement ages with limited income until they became eligible for Social Security. She called this situation “doubly cruel.”

Despite the backlash from employee advocates, the House resolution allows more wiggle room on workforce pay and benefits cuts than President Trump’s proposed budget in May, and scales back the overall amount of the required reductions. Trump planned to increase employee retirement contributions by 1 percentage point annually for six years and do away with supplemental annuity payments for everyone retiring after Oct. 1, 2017.

Combined with reduced cost of living adjustments for people under the Civil Service Retirement System, the provisions in the Trump budget alone were estimated to decrease the deficit by $63 billion over the next decade, about twice the House bill’s required reduction.

The House Budget Committee will meet on Wednesday morning for a markup of the budget resolution.

This story was updated with a quote from Elijah Cummings and to clarify that the Trump budget would do away with supplemental annuity payments for everyone retirement after Oct. 1, 2017. 

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