NTEU Will Fight Pension Contribution Increases in President's Proposal

09/19/2011

9/19/11: NTEU National President Colleen Kelley today expressed her strong opposition to the administration’s debt reduction proposal provision that calls for $21 billion in ‘reforms’ to civilian federal employee benefit programs by asking federal employees to make higher contributions toward their retirement. 

The president is proposing a permanent 1.2 percent increase in federal employee retirement contributions phased in over a three-year period.  Since the FERS pension system is fully funded, this permanent 1.2% salary reduction amounts to a $21 billion tax hike for federal employees, and federal employees alone.

“Federal employees are already under a two-year pay freeze—which amounts to a $60 billion contribution from federal workers over the next 10 years—and now they are being asked to contribute additional money to their retirement without an increase in benefits,” said President Kelley.  “NTEU strongly opposes these proposals and will continue to make our opposition known to the Super Committee and Congress,” she said.

Earlier this month, President Kelley sent this letter to the 12 members of the congressional Super Committee on debt reduction, underscoring the contributions to deficit reduction already made by federal workers and opposing any increases to employee pension contributions.

In her letter, President Kelley emphasized that “federal employees didn’t cause this (economic) crisis, and the crisis won’t be solved by cuts to federal employees.” She said she is disappointed to see these provisions in the president’s proposal and will make the union’s specific views on the president’s proposal known to the Super Committee.

The president’s proposal will fall especially hard on federal employees under the Civil Service Retirement System (CSRS) who will not receive the 3.1 percent payroll tax holiday being proposed for all other American workers. CSRS employees will be excluded from the president’s tax cut proposed under the American Jobs Act because they do not receive or contribute to Social Security. NTEU believes this unequal treatment of federal employees is unfair, and will press for relief for CSRS employees. NTEU has already raised this concern with the Super Committee and the administration.

The proposed further reductions are part of what the White House called today the “President’s Plan for Economic Growth and Deficit Reduction,” and which he will submit to the Super Committee, which is charged with finding up to $1.5 trillion in deficit reduction over the next 10 years. That 12-member body is comprised of six members from the Senate and House, and has begun its deliberations.

In emphasizing that the president’s proposals impacting federal pensions would result in real, permanent and meaningful declines in employee take-home pay, President Kelley said that in real terms, the two-year pay freeze is having the same impact—less money in their pockets—as federal workers face higher costs for health care and basic goods and services.

Not only that, she said, serious cutbacks in the budgets of their agencies are having a detrimental impact on staffing—an impact that only will get worse over time—and that puts additional workplace pressure on federal workers to accomplish more with less in the service of the public.

“You simply cannot guard the borders effectively, safeguard our food and water supplies, inspect our drugs and medical devices, administer such programs as making sure school children do not go hungry, and do all the other vital tasks federal workers are engaged in every day without sufficient staffing and resources,” the NTEU leader said. “Simply stated, it is well past time that, as a nation, we understand and agree on that.”

“Over time, I believe continually targeting the federal workforce for cuts will impact the government’s ability to attract and retain the caliber of professionals required to carry out the critical work of our country,” said Kelley.