How to lose (at least) 5.2 million votes

Federal Report

How to lose (at least) 5.2 million votes

President Donald Trump’s new budget has many federal employees seeing red, as in Republican, and feeling blue, as in Democratic. Senior Correspondent Mike Cau...

Mike Causey@mcauseyWFED

June 1, 2017 12:05 am

3 min read

For several decades, unions representing white-collar federal and postal workers have tried — with some success — to convince Democratic politicians and presidents that deep-down feds were true-Blue (as in Democrats at heart) voters. In the process, a lot of Republican politicians bought into that belief. Whether that’s actually true or not is subject to debate. But President Donald Trump’s new budget could have millions of federal workers and retirees seeing Red but voting Blue next time around. Maybe …

How the vast majority of civil servants — who do not belong to any union — actually vote is not known. What is likely is that feds, because of their education, training and jobs, do vote. Maybe in a higher percentage than their non-federal neighbors. Some people think that feds in Massachusetts (with 25,000 non-postal feds) and Mississippi (17,000) vote pretty much like their friends and neighbors. But that could change, big time and quickly. In time for the mid-term elections that are just 17 months away.

To accomplish the feat or herding millions of feds into the Democratic voting corral, all Congress has to do is approve without change the multi-billion dollar cuts in both take-home pay for workers, and sharply reduced benefits for both current and future retirees. Benefits promised to workers/retirees under the old Civil Service Retirement System (CSRS) and the Reagan era Federal Employees Retirement System that replaced CSRS would both cost more and give retirees much less in the future. Workers under FERS would see their contributions to the retirement plan rise 6 percent in six years. Over a 10-year period, that would reduce their take-home pay by around $72 billion, give a million or two either way. That’s a lot not to get.

Workers under FERS would no longer receive cost-of-living adjustments. Period. Their annuity would remain the same no matter how much inflation went up, or how long they were alive to collect it. Arthur Stein, a financial planner in the Washington area, says if a zero COLA plan were in effect, a 72-year-old retiree would lose — as in not get —18 percent in COLA payments if the inflation rate averaged 3 percent over a 10-year period. The value of the inflation catch-up the retiree would not get would be 26 percent if the inflation rate were 4 percent. However you crunch the numbers, it would mean a dramatic loss in income. How much of a loss? Just over $41 billion in 10 years, according to the budget estimates.

Most current federal retirees are under the more generous CSRS system. Most current federal workers are under FERS. The CSRS retirees would continue to receive COLAs under the budget plan. But the amount of each COLA would be reduced by 0.5 percent. Over time that would eat into the spendable income retirees have.

The budget would also eliminate the FERS Social Security supplement. It now goes to workers who retire before age 62 when they are eligible for Social Security benefits. It would be especially painful for federal air traffic controllers, firefighters and law enforcement personnel who are forced to retire earlier than most other civil servants.

According to the National Association of Retired Federal Employees, there are 2,091,377 million federal retirees and another 533,884 survivor annuitants. And they live, and vote, everywhere. So where are they, and what’s the economic impact they have on their local communities? Check this space tomorrow.