FEDweek

House Recesses without Deciding on Proposed Retirement Benefit Cuts

The House has started a recess that will last through Labor Day—and the Senate soon will follow—without holding a floor vote on a budget plan that would push forward the types of cuts to federal retirement benefits that the Trump administration has proposed.

The budget “resolution” is a planning document only, but it would order the House Oversight and Government Reform Committee to produce $32 billion in deficit reduction over 10 years in programs under its control. It suggested achieving that goal by increasing required contributions toward retirement benefits and eliminating the “special retirement supplement” paid to those under FERS who retire before age 62 and until that age when they can draw Social Security benefits.

The resolution made no mention of several other proposals in the White House budget plan: basing benefits for future retirees on a high-5 salary base rather than the current high-3, and reducing COLAs for CSRS retirees and eliminating the COLA on the civil service portion of FERS benefits. However, those would be on the table for the Oversight committee, since it would have discretion over how to achieve the target.

It is uncertain whether that process will even begin, though, because disagreements among House Republicans have held up a floor vote on the resolution. Most recently, a group of 10 House Republicans has urged the committee to reject the proposals, similar to an earlier letter most of the same group sent to House leadership. Groups of about 100 House Democrats and 18 Senate Democrats have sent similar letters to leaders.

The House resolution also calls for reinstating a partial hiring freeze, with the goal of cutting employment by 10 percent over an unspecified period.

Meanwhile, the House Republican Study Committee, a caucus of more conservative members, has drawn up its own budget plan, which amounts to a statement of positions rather than a measure they expect to be brought to a vote. Their plan includes recommendations such as raising the retirement contributions as well as basing COLAs on a different inflation index, one that in general would produce smaller increases. It also recommends setting the government contribution toward FEHB premiums at a dollar amount, rather than a percentage amount, an idea that past analyses have concluded would shift more of the costs to enrollees overall, although those enrolled in the lowest-cost plans could come out ahead.