Proposals Call For Unprecedented Cuts To Federal Pay, Benefits

Federal pay benefits cutsBy Judi Hasson, AOL Government


The congressional Super Committee has received several proposals to reduce the federal deficit with more pay freezes and less benefits for federal employees and a smaller federal workforce overall.

Specifically, there are proposals in both the House and Senate to eliminate benefits that help make federal jobs a magnet for good candidates - good pay, steady work, rare cutbacks and solid health insurance and pension benefits.

In a letter to the super committee last week, Sens. Joe Lieberman, I-Conn., and Susan Collins, R-Maine, called for extending federal employees' pay freeze - currently scheduled to last two years - into a third year, saving the federal treasury $32 billion.

"We are asking many dedicated, hard-working, and patriotic public servants to pay a price for fiscal and economic conditions for which they are not responsible," their Oct. 14 letter said. "But people across the country are struggling, most especially those who are suffering from historic levels of unemployment, and all Americans, including those of us in the public sector, must help get our country out of the hole we are in."

Among their proposals:

  • Ending the practice of allowing federal workers to use their unused sick leave toward retirement. That would save a relatively small $561 million over 10 years.

  • Reforming civilian retirement by calculating benefits based on a retiree's annual salary from his or her highest five years of service as compared to the current system of calculations based on the highest three years of an employee's salary. It would save $4 to $5 billion by 2020.

  • Caps on contracting contractors to do federal job, cutting agencies reliance on contractors by 15 percent in 2012, a potential savings of $6 billion.

But Lieberman and Collins strongly oppose limiting the federal workforce, one idea that House Republicans are pushing.

"We believe it would be unwise to impose rigid, arbitrary limitations on hiring or on federal employee levels. This approach could force agencies to rely on a less efficient mix of personnel, including more expensive contract personnel, and have the counterproductive effect of actually raising the cost of achieving the agency's mission," they said in their letter.

There are proposals from the House Republican leaders to get needed savings from the federal workforce, too.

GOP lawmakers recommended cutting the workforce by 10 percent through attrition, hiring one new worker for every three who leave, extending the two-year civilian pay freeze for an additional three years, eliminating step salary increases and cutting back pension benefits.

Rep. Darrell Issa, R-Calif.,chairman of the House Committee on Oversight and Government Reform, said the proposals would save $375 billion over 10 years.

Meanwhile, House Democrats submitted their own set of recommendations to the super committee. They called for extended caps on contractor salaries and urged the committee to go easy on federal workers.

Federal union chiefs swiftly attacked the proposals out there. The super committee has to come up with a plan by the end of November or automatic cuts will sweep across the federal government.

Many federal agencies already are offering early retirement packages to employees close to retirement to get their payroll numbers down. The Justice Department's antitrust division has offered a $25,000 bonus for any employee who took them up on the deal. The committee must decide by Thanksgiving how to slash $1.5 trillion over 10 years.

"Federal employees have sacrificed more than any other group, giving up two years of pay increases to help lower the country's deficit. It's time to pass the hat and ask others to pay their fair share," said John Gage, president of the American Federation of Government Employees.

National Treasury Employees Union President Colleen Kelley called the Senate proposal an exercise that would damage services for all Americans.

"The results would be to degrade the quality and availability of services the American people expect and depend on, put serious roadblocks in the way of agency recruitment and retention efforts, and place an unfair burden on federal workers," Kelley said in a statement.



Next: How To Succeed Professionally When All Jobs Are Temporary



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