What federal pay and benefits proposals are in play for 2018

The Republican Study Committee released its own take on the fiscal 2018 budget, which includes several cuts to federal pay, retirement and health benefits. Here...

Another 2018 budget proposal from a group of conservative lawmakers has its eyes on federal employee pay and benefits.

The Republican Study Committee is the latest group to offer its take on the fiscal 2018 budget. About 150 House Republicans sit on the committee, including House Oversight and Government Reform Committee Chairman Trey Gowdy (R-S.C.), House Budget Committee Chairman Diane Black (R-Tenn.) and others like Reps. Darrell Issa (R-Calif.) and Jim Jordan (R-Ohio).

The RSC proposal echoes the administration’s efforts to reduce the size of the federal workforce, which the committee said is “too big and too powerful.”

However, the RSC offers a few more specific suggestions. For example, it recommends the president and agencies work cooperatively with the House to identify federal positions that are no longer necessary and the appropriations bills where members could add Holman Rule provisions to eliminate or limit those positions.

“If used correctly, the Holman Rule could be a powerful tool for conservatives in the House of Representatives to work with the Trump administration to reshape the federal bureaucracy so that it is more accountable and responsive to the American people,” the proposal said.

Three Republican lawmakers recently used the Holman Rule to introduce an amendment to a package of appropriations bills for fiscal 2018, which suggests eliminating the Congressional Budget Office’s Budget Analysis Division and the 89 employees who work there.

In addition, new hires should be limited to one new employee for every three who leaves the workforce, the committee said.

Many of the recommendations from the Republican Study Committee are similar to the president’s own proposals and other recommendations included in the House Budget Committee’s 2018 request.

Here’s a rundown of what’s in play for federal pay, retirement and health benefits in 2018.


Republican Study Committee: The RSC proposal suggests cutting the annual, across-the-board pay increase for federal employees by half a percentage point below what the typical formula allows.

“With the national debt nearing $20 trillion, and projected to skyrocket to $30 trillion over the next decade, a fiscal state of emergency exists,” the committee said.

It cited the Congressional Budget Office’s April 2017 study that government spends, on average, 17 percent more on federal employee compensation than the private sector.

At another point in the committee’s proposal, the RSC suggests eliminating automatic pay raises for federal employees entirely.

“Pay increases for federal employees should be merit-based, not automatic, while still limited to parallel pay increases in the private sector.

President’s request: It calls for a 1.9 percent pay raise for federal employees in 2018. Members of the military would get a 2.1 percent raise.

House budget: The committee’s proposal makes no mention of changes to broader pay policy for civilian workers.

The House so far has been silent on a pay raise for civilian federal employees. The House Appropriations Subcommittee on Financial Services and General Government did not offer an alternative to president’s proposal in its 2018 appropriations bill. The House Appropriations Committee approved the bill earlier this month.

The full House is debating a package of appropriations bills that would give members of the military a 2.4 percent raise next year.


Republican Study Committee: The RSC proposal suggests all federal employees — including new hires and current employees — contribute more toward their retirement but does not suggest a specific percentage increase.

  • Basing future retirement benefits on the average of an employee’s highest five years of salary. Currently, retirement benefits are based on an employee’s length of service, salary and highest three-year average salary,
  • Eliminate supplemental payments to employees who retire before age 62.

President’s request: The President’s 2018 budget request proposes cuts to federal retirement worth $4.1 billion next year, for a total of about $150 billion over 10 years.

It includes four specific changes:

  • An increase in employee contributions by 1 percent each year for the next six years,
  • An elimination of the cost-of-living adjustment (COLA) for current and future Federal Employee Retirement System (FERS) participants and cutting the COLA by 0.5 percent for Civil Service Retirement System (CSRS) participants of what the typical formula currently allows,
  • Basing future retirement benefits on the average of an employee’s highest five years of salary, and,
  • Eliminate supplemental payments to employees who retire before age 62.

House budget: According to the reconciliation instructions included in the House Budget Committee’s proposal to the House Oversight and Government Reform Committee, retirement cuts would total about $32 billion over 10 years, significantly lower than the savings the Trump administration is expecting.

The Budget Committee’s request doesn’t go deep into the details, but it calls for current federal employees to make higher contributions to the pensions. It would also eliminate the supplemental benefit for employees who retire before they’re eligible for Social Security.

Health care

Republican Study Committee: The committee’s budget recommends Congress transition the Federal Employee Health Benefits Program (FEHBP) to a “premium support system.”

It suggests that because government covers a set percentage of an employee’s health premium, FEHBP participants have an incentive to choose higher-priced health plans.

“The government would offer a standard federal contribution towards the purchase of health insurance and employees would be responsible for paying the rest,” the RSC budget said. “This option would encourage employees to purchase plans with the appropriate amount of coverage that fits their needs.”

President’s request: The president’s proposal does not include any significant changes to FEHBP in 2018.

House budget: The Budget Committee’s request does not propose specific changes to the Federal Employee Health Benefit Program.

Performance and official time

The RSC proposal suggests that agencies currently act as the “dues collector” for employees in federal unions. The committee’s budget prohibits automatic union dues reduction for federal employees.

Yet while most federal unions are currently required to cover everyone under a collective bargaining unit, employees themselves are not required to be a dues-paying member of the union. If an employee decides to join a union as a dues-paying member, he or she can opt in to automatic dues reduction.

The RSC proposal also suggests eliminating official time altogether.

Neither the president nor the House Budget Committee offered comparable or specific recommendations on the role of federal unions, but several legislative proposals on the topic already exist.

In addition, the RSC recommends considering all federal employees as “at-will.”

Rep. Todd Rokita recently introduced a bill that would give agency leaders the authority to remove or suspend new federal employees “without notice or right to appeal, from service by the head of the agency at which such employee is employed for good cause, bad cause or no cause at all,” the legislation said.

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