As Congress returns from its August recess, its to-do list is well-known: raise the debt ceiling, pass a budget, fund the government and enact tax reform.
Exactly how it plans to achieve those goals — at what cost, to whom — is more uncertain. But in each case, our nation’s public servants find themselves in the line of fire.
Federal employees are hard-working, middle-class Americans who live and work in every congressional district. Eighty-five percent work outside the Washington, D.C., area. Two-thirds work to defend our homeland, support our military, or care for our veterans. Nearly one-third of federal employees are veterans themselves.
Yet, federal employees face threats that have become too familiar — a potential government shutdown, an austerity budget that threatens jobs and pay cuts through increased retirement contributions. As if that wasn’t enough, new proposals have emerged this year that take aim at earned retirement benefits promised in exchange for years of public service. Federal retirees’ quality of life is threatened simply because they served our nation.
As Congress debates how to achieve its goals, any of these options remain on the table. No deal has been reached on raising sequestration caps to prevent drastic cuts to agency budgets for the upcoming fiscal year or raising the debt ceiling. It is unclear what spending offsets will be agreed upon and if federal compensation cuts will be included. Facing a double-edged sword, federal employees must hope for a deal that keeps them at work without gouging their earned pay and benefits.
Meanwhile, the House Budget Committee passed a fiscal year 2018 budget resolution that would tie the fate of tax reform to $32 billion in cuts from federal retirement and/or health benefit programs. Even if a deal is reached on government funding, federal workers will not yet be out of danger.
It is past time for political leaders in Washington to stop scapegoating these individuals, who are simply doing the jobs our elected leaders have asked them to do. It starts with rhetoric portraying our nation’s public servants as faceless, overpaid bureaucrats. But it leads to policies that would deprive VA nurses, FBI agents, mail carriers and many other respected public servants, in and out of Washington, D.C., of hard-earned pay and retirement benefits.
Notably, President Trump’s budget for fiscal year 2018 proposed eliminating the cost-of-living adjustments (COLAs) to federal pensions entirely for recent federal retirees, and reducing them for older federal retirees. Eliminating or reducing COLAs for retirees substantially diminishes the value of their pensions and, therefore, their purchasing power. This could cost the typical retiree more than $100,000 over the course of a 25-year retirement, and even more thereafter, as the lost COLAs compound from one year to the next, and inflation continues to erode the value of the pension.
If you are not already taken aback by this proposal, perhaps you should be. In effect, it’s no different than taking an equivalent amount of money from someone’s 401(k) or individual retirement account (IRA), which, of course, would be illegal.
It also would be illegal to cancel COLAs for an annuity purchased from a private insurance company. What’s more, eliminating COLAs for state government employee pensions is actually unconstitutional in some states. It’s simply not unconstitutional for the federal government to do so to federal retirees based on rulings that hold that COLAs (and perhaps even the underlying pension) are not considered a property right under the fifth amendment.
But just because you’re technically allowed to do something doesn’t mean you should. Barely legal is not a reasonable justification for this policy, which would renege on commitments made to public servants.
Other proposals included in President Trump’s budget would significantly reduce the value of federal pensions for those approaching retirement.
Federal employees with a mandatory early retirement age, such as law enforcement officers, would be particularly harmed by the elimination of the annuity supplement, which bridges the gap between the mandatory early retirement age and the Social Security eligibility age. Again, by diminishing the value of a pension based on past work, such proposals fail to honor basic promises that we made to public servants across the country.
Budgets from both President Trump and the House Budget Committee call for increasing retirement contributions for already vested employees by more than 6 percent, without any increased benefit.
This “retirement tax” is nothing more than an outright pay cut for hard-working public servants. This would come on top of recent policies that achieved more than $120 billion in deficit reduction on federal employees’ backs through pay freezes and increased retirement contributions for new hires. The tax is a punitive and blunt policy tool that decreases take-home pay and could lead to the loss of the most effective, valuable employees.
Yet, these options remain on the table as members of Congress look for spending offsets for other priorities, from tax reform to increasing the debt ceiling. Thankfully, both Republicans and Democrats have signaled a strong opposition to these proposals. I would urge all members of Congress to oppose them, as well as any bill or resolution that harms the pay and benefits of the nation’s nearly 5 million federal employees, retirees and their families.
Richard G. Thissen is the president of the National Active and Retired Federal Employees Association (NARFE), a nonprofit membership organization dedicated to protecting the earned pay, retirement and health care benefits of federal employees, retirees and their survivors.
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