House Passes Payroll Tax Bill with Cuts to Federal Workforce


 12/14/11: Yesterday, by a vote of 234-193, the House of Representatives passed HR 3630, a bill that offsets an extension of the payroll tax holiday with huge cuts to federal employee pay and benefits. The bill now moves to the Senate for consideration there. NTEU sent this letter to each House Member in anticipation of the vote, and sent this letter to every Senate office opposing passage of this bill yesterday. 

 Sen. Ben Cardin and Reps. Chris Van Hollen and Jim Moran will be participating in a conference call Wednesday with the National Active and Retired Federal Employees Association to speak out against the components of this bill that would negatively affect federal pay and benefits.

The offsets in the bill include, for all current employees: a one-year extension of the current two-year freeze on federal pay through 2013; a 1.5% increase in employee pension contributions, phased in over three years and the elimination of the Social Security supplement effective January 1, 2013, except for those with mandatory retirement ages.  

The bill would also create a new class of employee, new hires with less than five years of federal service, called “secure annuity employees.” Those employees would see pension contribution increases of 3.2%; pensions based on high five years of service, rather than high 3, and an annuity “multiplier” reduction that would lower pension values by roughly 30%, effective January 2013.

The Union pointed out to the senators that this bill singles out hard working, middle class federal employees to bear a disproportionate burden while asking not even the smallest sacrifice by the most affluent.