The budget unveiled Monday by President Obama proposes to increase the contribution federal employees make towards retirement by 1.2% over three years beginning in 2013.
The stated purpose of the proposed change is to “make reasonable changes to federal worker retirement while maintaining the ability to attract and retain highly qualified individuals [to the federal workforce].”
The budget also proposes to eliminate the FERS annuity supplement for new employees. The estimated savings of these proposals are $27 billion over 10 years.
The 2013 budget proposal also detailed some of the changes made to date as they relate to the federal workforce. On his first day in office, the President froze salaries for all senior political appointees and then went on to eliminate bonuses for all political appointees in the Administration and cut back on performance awards to all other employees.
“A permanent pay freeze is neither sustainable nor desirable. However, in light of the fiscal constraints we are under, the Administration is proposing a 0.5 percent increase in civilian pay for 2013. Compared to the baseline, this slight increase in civilian pay would free up $2 billion in 2013 and $28 billion over 10 years to fund programs and services and is one of the measures the Administration proposes to help meet the discretionary caps.”
The Administration doesn’t anticipate any negative impact from these proposed changes, if they were to be implemented. The budget states, “These changes are not expected to have a negative impact on the Administration’s ability to manage its human resources, nor inhibit the Government’s ability to serve the American people.”
The 2013 budget proposal also recommends establishing a commission to look at ways to modernize federal personnel policies. Dubbed the Commission on Federal Public Service Reform, it would consist of members of Congress, representatives from the President’s Labor-Management Council, members from the private sector, and academic experts. The Commission would be tasked with developing recommendations in areas such as employee compensation, staff development and mobility, and personnel performance and motivation.
Unions are unimpressed with the proposals in the budget. AFGE President John Gage said, “Federal employees have already contributed $60 billion with pay freezes. The White House and congressional leaders should not treat federal employees’ paychecks like an ATM machine. The White House should respect those who choose public service over big banks and other corporations.”
Republicans in the House and Senate have proposed going further with the cuts. Members of the House have suggested extending the pay freeze to pay for a payroll tax cut extension, and members of the Senate have suggested extending the pay freeze and shrinking the size of the federal workforce to prevent cuts to defense.
The proposed cuts to the federal workforce unveiled in the budget are not new ideas as Congress has been proposing similar measures in recent months. However, now that the White House is apparently on board with at least some of the proposals, it presumably puts some of them closer to becoming reality.