2/5/08: Yesterday, President Bush submitted his budget proposal to Congress, which will now begin the processing of making appropriations for FY 2009. The budget proposes a 2.9 percent pay raise for federal civilian employees. NTEU believes that this pay proposal is insufficient to stop the loss of skilled, experienced and dedicated employees from a wide range of federal agencies in the coming years. The proposed budget would do nothing to close the 23 percent pay gap between federal and private sector workers. Closing that gap with the private sector was the stated goal of the 1990 Federal Employees Pay Comparability Act (FEPCA), which created a system of locality pay but which has not been implemented as intended since its enactment.

NTEU will be asking Congress to reject this plan and enact a pay raise of at least 3.9 percent next year for both civilian employees and members of the military. This level follows the long standing principle of paying civil servants and military personnel the employment cost index (ECI) now at 3.4 percent plus one half percent. The nation's dedicated civilian workforce and their brothers and sisters in the military deserve no less.

Funding for many federal agencies in the proposed budget would be flat or below what is needed for their missions. The SEC, for example, would receive less than 1 percent in increased funding, $913 million, compared to an estimated $906 million for FY 2008. This budget proposal would likely require staffing cuts, through attrition or otherwise. The president's budget assumes that the SEC will come out of FY 2009 with 3,473 fulltime employees, approximately 2.6% less than the agency is expected to have at the end of FY 2008. In light of the increasing demands already being placed upon SEC employees, including dealing with issues arising out of the subprime-mortgage crisis, such a budget makes little sense. Indeed, since the Enron and WorldCom crises, and the enactment of Sarbanes Oxley, SEC employees have been asked to do more with less for years now.

The budget also proposes to repeal several key provisions in law of concern to NTEU members, including a repeal of the permanent contracting out provisions that NTEU won in the last Congress to level the playing field between employee groups who bid on business and outside contractors. NTEU will fight this provision vigorously. Employee groups should not be forced to return to the days of no appeal rights during public-private competitions, and being undercut by companies that offer no or inferior health and retirement benefits.

The budget also attempts to save money by allowing health insurance companies under FEHB to offer additional plans. This is a veiled attempt to add more so-called “consumer driven plans” such as High Deductible Health Plans (HDHPs) funded through Health Savings Accounts (HSAs). NTEU has opposed these plans which can threaten the stability of the FEHBP pool by drawing in enrollees who do not anticipate high health care costs, thus leaving a smaller pool of people in traditional plans who could be confronted with higher premiums.

NTEU will be addressing these and other agency funding needs as the budget process moves through Congress.