The boost was allowed to expire in 2021 and although the then-Trump administration several times backed the higher figure at DoD, it didn’t press the issue and Congress did not act. Image: Ivan Cholakov/Shutterstock.com
By: FEDweek StaffA report for Congress forecasts only a small impact of returning the maximum buyout at DoD from the government-wide standard of $25,000 to the $40,000 level it had been for several years through 2021.
The Congressional Budget Office said that it expects DoD to annually offer only 1,600 buyouts—also called voluntary separation incentive payments—for its civilian employees to resign or retire. Buyouts commonly are used to avoid RIFS by creating vacant positions where agencies are undergoing reorganizations or reductions; recipients may not return to federal jobs within five years unless they repay the money.
CBO did its analysis regarding a provision in the Senate version of the annual DoD authorization bill (S-4638), which is pending a vote when Congress returns after the elections. That bill is considered one of the annual must-pass measures. The House version does not contain similar language.
Of the projected 1,600 recipients annually, “CBO expects that half of those civilian employees would take a VSIP at the current maximum amount of $25,000, so that the incremental cost to DoD for each of the 800 employees who separate each year would be $15,000,” said the analysis.
CBO said it further expects that 95 percent of those who accept would retire, doing so on average one or two years earlier than they would have.
The $25,000 amount was first set during the Clinton administration when buyouts were first authorized during a period of downsizing at DoD and some other agencies. It has not been widely used in the last 20 years or more as employment levels have been generally level or growing.
The amount at DoD was raised temporarily during the then-Obama administration on grounds that the $25,000 figure had lost value to inflation and was no longer a strong enough incentive. That action was seen at the time as a potential precedent for an increase government-wide but that never happened.
The boost was allowed to expire in 2021 and although the then-Trump administration several times backed the higher figure at DoD, it didn’t press the issue and Congress did not act. Unlike the prior boost, the language in the pending Senate bill would raise the amount permanently at DoD.
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