Unfinished Business Remains on Several Fronts

With a deadline of next Friday (December 13) for House-Senate budget conferees to produce a spending outline for the remainder of the current fiscal year, there has been no firm indication of what any such agreement would mean to federal employees and retirees. Negotiators have been making optimistic statements about a deal to prevent the next round of sequestration due to begin in January, and also potentially the scheduled 2015 round, by finding offsetting deficit reduction elsewhere. One scenario is that political leaders will give with one hand—by allowing a 1 percent raise to take effect in January by not enacting specific raise language before year’s end—while taking with the other—by ordering an increase in employee contributions toward retirement or some other change in retirement policy. How large any contributions increase would be, and when it would take effect remains uncertain; employee organizations and some members of Congress continue to push hard against the idea. Any deal to come from the talks would be in the form of a broad outline that could be brought to a vote with little working time left in the congressional year, and then would have to be translated into a catchall appropriations measure that most likely would not reach a vote until mid-January at the earliest. A separate bill could start progressing within the coming days to buy more time by putting off for as long as three months the agency spending authority due to expire January 15. Meanwhile, a major administrative task still pending is for OPM to put out final rules on the much-anticipated phased retirement authority. The agency set a goal of finishing by the end of the year, although after it issued proposed rules in mid-year, employee organizations recommended numerous changes that OPM must address, potentially delaying the final rules. For example, there were objections to OPM’s intent to limit the option only to those eligible under certain of the age and service combinations for voluntary retirement.