Federal Workers Ask How Debt Default Would Affect Them

By on July 15, 2011 in Current Events with 23 Comments

The American Federation of Government Employees (AFGE), the National Active and Retired Federal Employees Association (NARFE), the American Postal Workers Union, and the National Treasury Employees Union (NTEU) are among some of the federal employee advocacy groups that have sent a letter to the Office of Management and Budget and the Treasury Department asking what a failure to reach an agreement on the debt ceiling by the August 2 deadline would mean for federal employees.

The letter was addressed to Jacob Lew, the Director of OMB, and to Tim Geithner, the Secretary of the Treasury, and posited the following questions:

  • If the debt ceiling is not raised by August 2, will all departments and agencies continue to remain operational, or will a government shutdown result?  If so, what plans are in place to assure the continuity of government operations?
  • How will the assets of the Civil Service Retirement and Disability Fund and the G-Fund of the Federal Employee Retirement System be impacted, given the continued suspension of additional investments in these funds since May 16?
  • Will federal employees become subject to release through furloughs, and how will their wages and benefits be affected?

The groups expressed concern in the letter surrounding the President’s statement that he “cannot guarantee” that Social Security checks will be able to continue to be distributed after August 2.

The letter asks for a meeting with the appropriate officials as soon as possible so the groups can get answers to the questions.

Joseph Beaudoin, President of NARFE, said with regard to the debt ceiling situation, “To prepare for the very real chance that an agreement on the debt ceiling is not reached in time, the government must start asking itself what will happen on August 3 to our nation’s more than two million federal workers and the vital services they perform on all of our behalf. Will we be able to pay federal food inspectors to keep our food safe? Or what about our federal meteorologists at the National Weather Service who warn us of an oncoming tornado or hurricane? It’s difficult to imagine our country going a day without these federal services but the risk of fallout is real and we must have a plan in place so that a financial default does not also cause the collapse of America’s protection.”

A total of 20 groups signed the letter. The full text of the letter follows.

——–

The Honorable Jacob J. Lew                                                        
Director
Office of Management and Budget
Eisenhower Executive Office Building
Washington, D.C. 20503

The Honorable Timothy F. Geithner       
Secretary
Department of the Treasury
1650 Pennsylvania Avenue, N.W.
Washington, D.C. 20220

 

Dear Director Lew and Secretary Geithner:

On behalf of the 4.6 million federal and postal workers and annuitants represented by the undersigned management associations, labor unions and professional associations, we extend our deepest appreciation for your continuing efforts to raise the nation’s debt ceiling.

The prospect of Congressional inaction by August 2 over raising the debt ceiling is generating significant concern throughout the federal community over its impact on the continuity of government operations.  This has been underscored by President Obama’s comment on July 11 that he “cannot guarantee” that the 27 million Social Security checks due out on August 3 will be mailed as scheduled if the debt ceiling is not raised.

As a result, federal government executives, managers and rank-and-file employees represented by our organizations seek answers to the following questions:

 

  • If the debt ceiling is not raised by August 2, will all departments and agencies continue to remain operational, or will a government shutdown result?  If so, what plans are in place to assure the continuity of government operations?
  • How will the assets of the Civil Service Retirement and Disability Fund and the G-Fund of the Federal Employee Retirement System be impacted, given the continued suspension of additional investments in these funds since May 16?
  • Will federal employees become subject to release through furloughs, and how will their wages and benefits be affected?

 

Our organizations seek a meeting with appropriate Administration officials to secure answers to these and related questions as soon as possible.  Thank you for your assistance in arranging this meeting.

Sincerely yours,

 
American Federation of Government Employees
American Federation of State, County and Municipal Employees
American Foreign Service Association
American Postal Workers Union
Federally Employed Women
Federal Managers Association
International Association of Fire Fighters
National Active and Retired Federal Employees Association
National Association of Federal Veterinarians
National Association of Government Employees
National Association of Letter Carriers
National Association of Postal Supervisors
National Association of Postmasters of the U.S.
National Council of Social Security Management Associations
National Rural Letter Carriers Association
National Treasury Employees Union
Organization of Professional Employees of the U.S. Department of Agriculture
Professional Aviation Safety Specialists
Professional Managers Association
Senior Executives Association

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About the Author

Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce. Ian also has a background in web development and does the technical work for the FedSmith.com web site and its sibling sites.

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