Budget

White House budget doubles down on reorgs and benefit cuts

President Donald Trump is once again calling on Congress through his fiscal year 2021 budget proposal to reduce federal spending, predominantly through cutting the budgets of many federal civilian agencies, reorganizing existing agencies and modifying federal employee benefits.

According to budget documents released Feb. 10, the White House plans to support a one percent increase to federal pay in 2021 in exchange for changes to the federal retirement system.

In moves that budget documents claim will “align federal compensation with leading private sector practices,” the Trump administration proposed five reforms to federal benefits:

  • Increase employee contributions to the Federal Employees Retirement System such that the employee and employer would each pay half the normal cost;
  • Eliminate the FERS Cost-of-Living Adjustment and reduce the Civil Service Retirement System;
  • Eliminate the Special Retirement Supplement, which provides a bridge for feds that have to retire before they are Social Security eligible;
  • Change the retirement calculation from the High-3 years to High-5 years, which bases retirement payments on the highest-paid years of federal service; and
  • Reduce the Thrift Savings Plan G Fund interest rate, which is designed to provide a higher-than-inflation rate of return on federal retirement investments.

“The administration has attempted to make pay more flexible and performance-based, since across-the-board pay increases have long-term fixed costs and fail to address existing pay disparities or to target mission-critical recruitment and retention goals," the budget documents state. "A more targeted approach that rewards the top performers with the most critical skills is needed.”

The proposed changes stem from findings in a 2017 Congressional Budget Office study, which found federal employees were compensated 17 percent more on average than their public sector counterparts. But criticisms of that study note that it focused on education level rather than job descriptions, and other government reports have found that feds actually receive less than the private sector.

The White House budget would also alter federal employee leave policies to reduce the number of overall leave days available to feds, while merging different types of leave into one pool.

And though the budget stated that the White House is not calling for direct cuts to the federal workforce, it did note that “in light of technological changes that automate transactional processes,” agencies may find that they have reduced personnel needs.

Meanwhile, the administration has continued to push for changes to the federal hiring process, most notably by removing degree requirements for federal job listings, and investing in employee reskilling initiatives.

“OPM is partnering with agencies to develop a Federal Robotic Process Automation Reskilling Academy to train and mentor federal employees whose jobs are being affected by RPA. These employees will learn how to conduct process mapping and develop and deploy ‘bots’ without the need for extensive information technology training,” the budget said.

Also in 2021, the administration will build on the success of efforts to grow the federal cybersecurity workforce through reskilling — investing in training personnel with an aptitude for cybersecurity to critical roles.

The federal attempt at reskilling workers in cybersecurity proved less successful than the administration had hoped, with some graduates of the program struggling to qualify for cybersecurity jobs within the government. Officials have chalked the problem up to a too-rigid job classification system.

A majority of civilian federal agencies would receive cuts to their 2021 budget, with the exception of the Departments of Homeland Security, Treasury, Veterans Affairs and NASA. Of the agencies receiving cuts, the Department of Commerce would lose the largest percent of its former budget, decreasing by about 37 percent, as the agency would no longer need higher costs for the 2020 Census.

But the budget also continues to push for already-proposed and new reorganization plans in 2021, many of which proved contentious in FY2020 negotiations.

The budget pointed to “positive progress” on proposals first initiated in a 2018 reform effort, including the transfer of the background investigation mission from the Office of Personnel Management to the Department of Defense in October 2019. Improvements to business processes and expanded capacity reduced the investigation backlog by over 64 percent from 725,000 in April 2018 to under 261,000 in December 2019, according to the budget documents. Building on this success the Trump administration proposes for 2021 the transfer of the United States Secret Service from the Department of Homeland Security to the Department of the Treasury, to enhance counterfeit and cybercrime investigations.

Beyond continuing support for the transfer of background investigations from the Office of Personnel Management to the Department of Defense, the White House once again placed budget requests for OPM under the General Services Administration, standing by a highly criticized plan to make the government’s personnel office a subcomponent of GSA, rather than its own agency.

In December 2019, reports were that Trump had turned against the idea to merge the two agencies after consistent bipartisan opposition and televised reporting on the proposal. But the 2021 budget proposal offers much the same reorganization changes as in the previous year’s budget.

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