Update on Budget/Debt Ceiling Talks


6/30/11: Under a proposal being discussed as part of the debt ceiling negotiations, federal employees could see a 5 to 6 percent reduction in their pay to increase employees' contribution to their pension plans. This proposal, which NTEU is strongly opposing, is already part of the House budget for FY 2012.

Budget talks led by Vice President Biden broke off last week when House Majority Leader Eric Cantor and Senator Jon Kyl refused to continue the discussions. Both are adamantly opposed to tax increases. President Obama met with both top Senate leaders this week. In a speech yesterday, the president called for tax increases as well as spending cuts.

There are two other groups meeting together in the Senate to develop proposals for reaching an acceptable level of reduced spending. An increase in federal employees' contribution to either CSRS or FERS is still very much on the table. 

Several members of these groups are also reviewing a proposal to replace the Consumer Price Index (CPI) with a “chained CPI.” This would result in a lowering of the inflation rate, meaning a benefit reduction for all whose pensions are adjusted annually.  NTEU also strongly opposes converting to the “chained CPI.”