One potential template is an options document that has been circulating this year among Capitol Hill Republicans, in which the highest-value possible change for the committee to back—$44 billion over 10 years—would be requiring all FERS employees to contribute 4.4 percent of salary toward their retirement benefits. Image: DCStockPhotography/Shutterstock.com
By: FEDweek StaffThe House Budget Committee has approved a budget outline that would require substantial cuts to numerous government programs, including most likely federal employee retirement and health insurance benefits.
The budget “resolution” now moves to floor voting in the House, where it would take virtual unanimity among Republicans to pass—which has not been the case in the recent past years—and then approval by the Senate.
Should it clear those hurdles, it would trigger a process called reconciliation, in which individual committees would make recommendations to increase income or decrease spending in areas under their purview. Those would then be combined into one bill that would require only a simple majority vote in the Senate, not subject to the 60-vote majority most commonly required there for major budget and other legislation.
For the House Oversight and Government Reform, the figure would be $50 billion through 2034. Although details would be up to the committee, the programs under its control that involve the most money are federal retirement and health insurance benefits.
One potential template is an options document that has been circulating this year among Capitol Hill Republicans, in which the highest-value possible change for the committee to back—$44 billion over 10 years—would be requiring all FERS employees to contribute 4.4 percent of salary toward their retirement benefits.
Currently, that contribution is 0.8 percent for those hired before 2013, 1.3 percent for those hired in 2013 and 4.4 percent for those hired since that year. About half of FERS employees have less than 10 years of service and already are paying at the 4.4 percent rate.
The document does not mention employees under the CSRS system, who make up only several percent of the workforce and who generally pay 7 percent of salary toward their annuities, although they don’t pay the 6.2 percent Social Security payroll tax that FERS employees also pay, because CSRS doesn’t include Social Security.
It meanwhile projects that over 10 years:
* ending the annuity supplement for those who retire under FERS before age 62 that is paid until they reach that age and can claim Social Security benefits would yield $5 billion-$13 billion.
* basing the annuities of future retirees on the highest five consecutive salary years rather than the current three would yield $4 billion.
* changing the premium sharing system in the FEHB to a voucher system in which the government’s share would be set at a flat amount and increased at a rate lower than the growth in premiums would yield $16 billion-$18 billion.
In addition, the document lists several proposals that would have either unknown or lesser impacts, such as charging employees fees for filing appeals at the MSPB and eliminating official time for employees to perform union-related duties on the clock.
Many of those proposals have been included for years in CBO reports on potential ways to reduce the deficit; although CBO does not formally recommend them, such assessments carry weight because they mean that options would count as real savings under congressional budget rules.
The most recent of those reports, issued late last year, for example estimated the increase in required retirement contributions at $39.6 billion over 10 years and the savings to the government of the health insurance voucher proposal at either $15.3 billion or $17.3 billion depending on how the government’s share is increased.
That report did not mention or estimate the budgetary impact of the “high-5” or retirement supplement proposals, although past reports did.
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See also,
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