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Jobs, pay, benefits at stake in election

Aug. 19, 2012 - 01:28PM   |  
By STEPHEN LOSEY   |   Comments

GOP presidential candidate Mitt Romney’s selection of Rep. Paul Ryan, R-Wis., as his running mate all but ensures federal pay and benefits will be a hot political issue during this year’s presidential campaign.

Ryan has repeatedly backed steep cuts to federal employees’ take-home pay and a 10 percent reduction in the federal workforce as part of his strict stance against government spending. Romney called Ryan an “intellectual leader of the Republican Party” when introducing him as his running mate Aug. 11.

“He understands the fiscal challenges facing America: our exploding deficits and crushing debt, and the fiscal catastrophe that awaits us if we don’t change course,” Romney said.

The American Federation of Government Employees, the largest federal union, denounced Ryan’s selection as the Republican vice presidential nominee. The union said 1,000 federal employees and union activists picketed a Las Vegas fundraiser attended by Ryan Aug. 14 to protest his proposed budget cuts.

“Gov. Romney’s selection of Congressman Paul Ryan as his running mate indicates just how much contempt this ticket will have for the federal workforce and the vital programs we deliver to the American public each and every day,” outgoing AFGE National President John Gage said in a release.

Ryan’s plan

Ryan’s bills have included some of the most stringent proposals targeting federal workers over the past few years.

The House in May passed a Ryan-proposed bill that would phase in a five-percentage-point contribution hike in federal employees’ pension contributions over five years. This would leave Federal Employees Retirement System (FERS) workers contributing 5.8 percent of each paycheck — instead of 0.8 percent now — toward their pensions and Civil Service Retirement System (CSRS) employees contributing 12 percent, instead of 7 percent. New FERS employees hired beginning in 2013 would automatically contribute 5.8 percent, with no phase-in.

This would effectively be a 5 percent cut in take-home pay for federal employees. The bill failed to advance in the Democratic-controlled Senate.

Ryan’s budget — which he released in March and dubbed “The Path to Prosperity” — also calls for freezing federal pay through 2015. This would turn the current two-year pay freeze into a five-year freeze.

He also cited in his budget the Congressional Budget Office’s January study that found federal workers are compensated 16 percent higher than their private-sector counterparts, and he proposed requiring federal employees to “make a more equitable contribution to their retirement plans.”

“Federal workers deserve to be compensated equitably for their important work, but their pay levels, pay increases and fringe benefits should be reformed to better align with those of their private-sector counterparts,” Ryan wrote. “Immune from the effects of the recession, federal workers have received regular salary bumps regardless of productivity or economic realities.”

Ryan’s budget also proposed cutting the federal workforce by 10 percent — or about 210,000 employees — over three years. Ryan said employees would be reduced “not through layoffs, but via a gradual, sensible attrition policy.”

In his budget, Ryan connected the growth in the federal workforce and national debt to the dismal private-sector job market.

“It is no coincidence that private-sector employment continues to grow only sluggishly while the government expands,” Ryan wrote. “To pay for the public sector’s growth, Washington must immediately tax the private sector or else borrow and impose taxes later to pay down the debt.”

If Romney wins the White House in November, it is likely his administration will push Congress hard for some or all of those changes, AFGE said.

“We think the choice of Ryan, with his extremely specific anti-federal employee budget proposals, makes it crystal clear that the Ryan budget will be the plan for the Romney administration,” AFGE legislative and political director Beth Moten said in a statement.

But the chances of these proposals actually passing will likely depend on which party controls the Senate. If Democrats retain the majority there — or at least hold on to enough seats to maintain a filibuster — they could kill the Romney administration’s chances to change federal pay and benefits.

Obama’s plan

President Obama also supports unwelcome changes to federal pay and benefits, though his proposals would have less of an impact than Ryan’s.

Obama wants to break the current pay freeze with a 0.5 percent pay raise in 2013. If approved, it would be the smallest pay raise — except in years where pay was frozen — in the General Schedule’s six-decade history.

And last year, Obama released a deficit reduction plan that would hike federal employees’ retirement contributions by 1.2 percent over three years. Some observers expect that will represent the floor for future negotiations.

Obama also proposed eliminating one retirement benefit for future new employees: the FERS annuity supplement, which is paid to retired employees who are not yet eligible for Social Security benefits and provides what an employee would receive for his federal service if he had been eligible. The savings from those changes — estimated to be $21 billion over 10 years — would be put toward unfunded liabilities of the federal retirement plans.

Federal employee unions last year blasted Obama’s proposals, and said the proposals would drive many older federal employees to retire.

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