NTEU Opposes Federal Pay, Benefit Cuts to Offset Extension of Payroll Tax Holiday


 1/5/12: NTEU National President Colleen Kelley called on House-Senate conferees to oppose offsetting an extension of the current two-month payroll tax holiday with cuts to middle class federal employee pay and benefits.

In this letter to the seven senators and 13 House members, President Kelley said the Senate compromise measure—co-sponsored by Senate leaders of both parties—on extending the payroll tax holiday through February did not contain any such cuts.

“Many federal employees are not even eligible to get the payroll tax reduction because they are not covered by Social Security,” she wrote. Further, she said, “federal employees have contributed $60 billion to deficit reduction through the present two-year pay freeze.”

On the other hand, President Kelley noted the House version of proposed legislation addressing the payroll tax holiday sought to have federal workers contribute another $65 billion through cuts to their pay and benefits “while preventing even the smallest contribution from millionaires and billionaires.”

The offsets in the House bill included a one-year extension of the pay freeze; a 1.5 percent increase in employee pension contributions, phased in over three years; and elimination of the Social Security supplement effective next Jan. 1, except for those with mandatory retirement ages.

Moreover, she pointed out, the House bill would have created a new class of federal employees who would see pension contribution increases of 3.2 percent; a pension based on their high-5 years of service rather than the present high-3 formula; and an annuity multiplier reduction that would lower pension values by some 30 percent.

“Federal employees are working with severely limited resources,” Kelley wrote to the conferees. “They have faced government shutdowns four times this year, yet they have worked diligently to deliver services to the public. To ask them to bear such a disproportionate additional burden is unfair and unacceptable.”