Has the proposed social security tax cut triggered a civil war in your office? Senior Correspondent Mike Causey says in some locations there is a major rift bet...
Has the proposed Social Security tax cut triggered a mini-civil war in your office?
Is there a workplace chill between older workers under the old Civil Service Retirement System who wouldn’t get any tax break, and their younger colleagues in the Federal Employees Retirement System who would benefit?
Most of the federal workforce is covered by the FERS plan. But roughly half a million long-time feds are in the older CSRS program. They pay the Medicare tax but do not contribute to Social Security.
As proposed by the President, people who pay into Social Security (which is most American workers) would have their payroll tax cut by 2 percentage points next year. The idea is that the temporary cut would put more money in people’s pockets and they would spend more and stimulate the economy.
The two percent “raise” is a big deal to lots of people. Congress will almost certainly approve a 2-year federal pay freeze proposed by the White House, although military personnel are in line for a 1.4 percent raise in January.
Federal health insurance premiums are going up an average of 7 percent next month. That will be especially tough for retirees who didn’t get a cost of living adjustment this year, and who won’t get a COLA in 2011.
We’ve been flooded with e-mails from CSRS employees (mostly wondering why they aren’t getting a tax break) and from FERS employees (mostly wondering why the CSRS types are complaining.) For example:
“The CSRS employee hasn’t paid into the Social Security system for all the years they have been employed. Now they want that 2% cut back. Well on one hand I feel for them but my pocketbook and food pantry say something else indeed!!
“When they receive that 4% COLA raise at some point or even the 5.8% they received in 2009, FERS retirees received 1/2 of that pay increase….ONE HALF!!!! So Mike you think they would give us the other half COLA….I think not. Sometimes what goes around comes around and this my dear friend is one of those times.
“I really do not like to go against my fellow Federal Worker, but this time my pocketbook is a bit light and I must do what I must do!!!!!! Thanks as always for keeping us lowly Federal Workers updated with the news of the HILL!!!! ” Craig in West BG Virginia
“Those CSRS Folks who are ‘upset’ need to admit the reality that they don’t pay SS so they don’t get the reduction. THAT IS fair.
“They can also take great comfort in going to the bank as they get a minimum 60 percent of their salary when they retire, for the same years of service their counterparts in FERS basically get 1 percent per year for. Pretty Nice! Haven’t heard CSRS folks crying about how unfair that is.
“CSRS retirees have ALWAYS had it pretty good…if they’re not all retired yet, they will be soon enough, and they will REAP great benefits. They had the option of joining FERS years ago, but if they opted out to protect their 60 percent plus retirement checks, they can’t cry now over a 2 percent tax reduction in SS they don’t even pay. We’re ALL taking the freeze, but we don’t ALL get the good package they have to look forward to.
“I had no choice of CSRS or FERS when I came in 6 mos. after FERS started, and I have paid SS for my entire career. When I get to go, I’ll have a whopping 36% of my salary for the same 36 years of service CSRS folks get far more. Oh yeah sure I have the TSP…but it isn’t the million dollars everyone SAID it would be if I invested the max I could (and have done) when it started…far less.
“The CSRS employees, like ALL us Feds, should relax, take a DEEP breath, be grateful we have a job, stability/continuity, good health insurance, and a pension that no one ran off with or blew. We will all be fine when this crisis has passed.
“Keeping it in perspective…. “ Deborah V.
Thoughts? Rants? Amens? Objections? mcausey@federalnewsradio.com
Nearly Useless Factoid
by Suzanne Kubota
Four out of five married people buy things they don’t tell their spouses about. You’re shocked, right? According to a survey by CESI Debt Solutions, men are slightly more likely than women overall to engage in what Money Magazine calls these “little green lies.” However, “43 percent of wives cop to buying clothing or accessories that they don’t tell their husbands about, making fashion easily the most common purchase that a spouse of one gender hides from the other.” And men? They’re most likely to not tell their wives how much they’ve spent on booze, which 21 percent of husbands have done.
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