Trump thanks federal employees with $143.5 billion in retirement cuts, by
Joe Davidson, 5/8/18, Washington Post
President Trump really knows how to say thank you.
Just as festivities geared up for Public Service Recognition Week, which began Sunday, his
administration sent a letter to Congress proposing $143.5 billion in
compensation cuts for federal employees.
In a letter to House Speaker
Paul D. Ryan (R-Wis.)
on Friday, Office of Personnel Management Director Jeff T.H. Pon pushed four
proposals that, over 10 years, would significantly cut retirement benefits for
2.6 million federal retirees and survivors.
Saying he wants “to bring Federal benefits more in line with the
private sector,” Pon proposed:
·
Eliminating supplements for
Federal Employees Retirement System (FERS) annuitants who retire before being
eligible for Social Security benefits.
·
Reducing federal pensions by basing them on workers’ basic pay
five-year averages instead of three years.
·
Increasing employee retirement contributions with no increase in
benefits. The plan would sharply boost the 0.8 percent of basic pay most FERS
employees contribute. The letter makes the impact on federal retirees clear.
“Under this proposal, FERS employee deduction rates will increase by 1 percent
per year until they reach 7.25 percent of basic pay. … This proposal would
require FERS employees to fund a greater portion of their retirement benefit.”
·
Reducing or eliminating retirement cost-of-living adjustments.
The administration plans “to reduce the cost-of-living adjustments (COLAs)
under the Civil Service Retirement System (CSRS) by one half of one percent and
to eliminate COLAs under the Federal Employees’ Retirement System (PERS) for
current and future retirees.”
In addition to these retirement cuts, the administration also
has proposed freezing federal pay next year. Employees suffered a three-year
freeze on basic pay rates under the Obama administration. With next year’s
planned freeze, federal employees would have been hit with $246 billion in cuts
to wages and benefits, complained J. David Cox Sr., president of the American
Federation of Government Employees, which released Pon’s letter after getting
it from a congressional source.
“President Trump’s war on working people knows no limits,” Cox
said. “As Wall Street shareholders are reporting record profits and the
wealthiest 1 percent are basking in their massive tax cuts, President Trump
believes the career employees who keep the government running deserve another
cut, this time to their retirement.”
Pon signed the letter to Ryan, but it certainly has Office of
Management and Budget Director Mick Mulvaney’s fingerprints all over it. The
proposals were part of the administration’s budget proposal released in
February, before Pon took office.
Ryan did not respond to a query about the letter, but Rep.
Elijah E. Cummings (Md.), the ranking Democrat on the House Oversight and
Government Reform Committee, was upset. Calling the Trump administration’s
proposal “draconian,” he said, it “would betray the promises the nation has
made to middle-class federal workers who dedicate their lives to public service
— as well as their families — and it would severely degrade recruitment and
retention.”
Pon’s signature on the letter raises additional questions.
In a conference call with reporters last week, Pon talked about
the need to have “data required for having an intelligent conversation” with
federal unions about compensation and having “that dialogue with the same
data.” So why he is pushing major compensation cuts before there is any
dialogue or agreement on the data?
The data differ.
In April, a Federal Salary Council
report said
federal pay lags behind the private sector by about 32 percent. Last year, the
Congressional Budget Office said that feds are paid 3 percent more overall than
private-sector workers, but that varies widely with educational level. Those
with no more than a high school education are paid about a third more than
their private-sector counterparts, while those with a professional degree or
more are paid about a quarter
less.
Furthermore, Pon has called for “wholesale change” to the civil
service system, which would have to include compensation. He promised to have a
civil service overhaul plan by the midterm elections and criticized previous
proposals as “nibbling around the edges.”
If that’s the case, why is he pushing the retirement cuts before
his larger plan is ready? I asked OPM these questions. Its response did not
address them but largely copied language from the letter.
Perhaps Pon will explain when he appears at a Public Service
Recognition Week forum on civil service
changes Wednesday
morning at the Partnership for Public Service. During the call with
journalists, he answered only questions submitted in advance. We were allowed
no live questions or follow-ups. I’m sure federal retirees would like to ask
him about keeping commitments.
“In exchange for years of hard work over long careers, our
government made a commitment to middle class federal and postal workers that
they would receive federal pensions in retirement,” said National Active and
Retired Federal Employees Association (NARFE) President Richard G. Thissen.
“Those pensions are not gifts. Diminishing their value in any way for those who
have already earned them — including by eliminating or reducing COLAs, altering
how they are calculated, or eliminating an entire element of the pension — fails to honor the
basic commitments made to our public servants.”
In his Public Service Recognition
Week proclamation, Trump praised the workforce for its commitment, saying: “Every
day, our Nation’s civil servants help make America better, safer, and stronger.
This week, we honor their efforts and extend our gratitude for their
exceptionalism and steadfast commitment to serving the American people.”
They can take that to the bank.
Columnist Joe Davidson covers federal government issues in the
Federal Insider, formerly the Federal Diary. Davidson previously was an
assistant city editor at The Washington Post and a Washington and foreign
correspondent with the Wall Street Journal, where he covered federal agencies
and political campaigns.
Comments
Government
employees should have their defined benefit pension plans terminated. The
balances should be rolled into a 401K-type defined contribution plan with a 5
year vesting requirement for employer contributions. This would put them on an
even footing with private sector plans. This would reduce the US government’s
$124 trillion in unfunded liabilities.
Pay
should be based on private sector market rates easily accessible from salary
and benefit surveys. Full parody with the private sector would include the
de-unionization of all government and monopoly utility employees. Pay rates
would be based on individual skills within market ranges.
About
half of what the federal government is funding is not authorized in their
“enumerated powers” and needs to be privatized. This would cut $1 trillion a
year out of the federal budget and allow the US to pay down the $21 trillion
debt.
Norb Leahy, Dunwoody
GA Tea Party Leader
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