Corker's Fiscal Cliff Plan Would Extend Pay Freeze, Raise Pension Contributions

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By on November 27, 2012 in Pay & Benefits with 0 Comments

Senator Bob Corker (R-TN) has announced a plan he is putting forward to avoid going over the “fiscal cliff.” The plan includes a number of reforms that, if enacted, would directly impact the federal workforce.

Corker is circulating a long term plan which includes proposals such as a lower inflation adjustment for Social Security and a gradual increase in the retirement age for Social Security to 68. It also includes $749 billion in higher tax revenue claimed by capping itemized deductions at $50,000, a proposal that hits wealthier taxpayers the hardest.

The plan touts that it would cut $4.5 trillion to the federal deficit over 10 years.

But the plan also includes federal workforce reforms as outlined by the Bowles-Simpson deficit commission. Specifically, Corker’s bill would enact the following changes to the federal workforce:

  • Continue the pay freeze for federal workers through the end of 2015
  • Reduce the federal workforce through attrition by requiring OMB and OPM to hire only one new federal employee for each three retirements
  • Cap federal travel costs at 80% of fiscal year 2013 levels for five years
  • Beginning immediately, cap GSA spending on new federal fleet vehicles at 80% of fiscal year 2012 levels
  • Direct OMB to identify and dispose of federal property that is excess, surplus, underperforming, or otherwise not meeting the needs of the federal government with an aggregate value of at least $4 billion by the end of fiscal year 2018
  • Reform federal employee pensions to make the benefits more comparable with the private sector (this proposal would only affect new employees)
  • Require savings from common-sense reforms to mandatory agriculture programs

In addition to having higher contributions to their pensions, federal workers would receive an $11,000 voucher payment to finance their family’s health insurance which is estimated to save taxpayers about $7 billion a year.

Speaking on his plan, Corker said, “Kicking the can down the road — setting up a process for token deficit reduction today with the promise of more reforms later — is misguided and irresponsible and shows a total lack of courage.”

He offers more insight into the reasoning behind his plan in a recent op-ed published at the start of this week.

So what are the chances of Corker’s plan becoming a reality? According to a recent AP story, it’s a “longshot:”

“For starters, he rejects the idea of settling for a “down payment” on the deficit that would be used to punt the big decisions on the budget to next year, even though that’s the recommendation of Boehner. And his plan is tilted to painful choices on Social Security and Medicare that Democrats are unlikely to embrace.”

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About the Author

Ian Smith is one of the co-founders of He enjoys writing about current topics that affect the federal workforce.