Budget deal: Feds dodge a bullet…

Despite the loud gnashing of teeth by groups representing workers and retirees, the long-dreaded budget deal could have turned out a lot — as in a lot — worse for the fed family.

Feds who will take the hit, if the budget deal is approved by Congress, are people yet to be hired. You, however, appear to have dodged a bullet.

Instead of a legislative hammer hitting the federal retirement program, as many predicted, it’s what the Ryan-Murray (or Murray-Ryan) package does not do that counts.

It is your colleagues of the future, the people now in the hiring processing pipeline or who have yet to seek a career in government, who will take the hit. And it is hardly a mortal wound for them either.

Groups representing feds are showing the required public pain over the deal. That’s because that’s the way things are done here in Hollywood East. A good show is better than substance.

The public grief projected by the official federal community shows the people they represent that they cared and tried very hard. Which they do and did! More important, it is to convince hard-line politicians that they inflicted great pain on the bureaucracy which has taken it on the chin in the past. It is designed to make fed-bashing politicians feel good. Which is fine. But in fact…

What the budget compromise does not propose actually represents a clear victory for the Federal-Postal Coalition. Its 30 member organizations include rank-and-file federal and postal unions, professional and management associations, and retirees. Frequently the groups are at war with each other. But on the big issues — like this budget deal — they often close ranks. They got a big assist from Washington-area politicians of both parties who provided in-House, in-Senate pressure. While it appeared that the pro-fed groups were losing the battles, it turns out they pretty much won the war. Like this time.

The dreaded cuts in retirement benefits, under serious consideration at one time, aren’t in the package. Instead of forcing all feds to pay more for retirement, the budget compromise applies only to people not yet hired and on the payroll.

Feds hired next year must contribute 4.4 percent of salary to the FERS program. Workers hired this year kick in 3.1 percent, and those hired before 2013 — which is most people — will continue to pay only 0.8 toward their retirement benefits.

At one point, Congress and the White House were looking at raising everybody’s contributions between 1.2 percent and 4 percent. And the White House endorsed a plan to reduce future retirement benefits for everybody in the government, the military or under Social Security.

But the dreaded “chained CPI” proposal is not in the final budget deal. That would have been the big money saver since it would have permanently reduced future cost-of-living adjustments for federal retirees, military retirees and people on Social Security an estimated 0.3 percent each year. That was the cut most feared by pro-fed lobbyists.

The only retirement change involves nondisability military retirees who are under age 62. Future COLAs for them will be equal to inflation minus 1 percent. That’s still a better deal than the current diet-COLA system for FERS retirees. They don’t get any COLA until they reach age 62 and then it is reduced by one percentage point if inflation exceeds 2 percent.

On the plus side, the budget plan calls for a self-plus option in the Federal Employee Health Benefits program. Currently workers must choose between self-only and family plans, even if the family consists of only two people.


Compiled by Jack Moore

The holiday classic It’s a Wonderful Life, is known for its treacly sentimentality. So it may come as a surprise that the “notoriously cynical” writer and satirist Dorothy Parker helped do some rewrites on the script. Unfortunately none of her truly great wisecracks (“Ducking for apples — change one letter and it’s the story of my life”) seemed to make it to the final script.

(Source: Mental Floss)


How the budget deal will impact current and future federal employees
Newly hired federal workers will be required to contribute more toward their pensions and some military retirees will see smaller cost-of-living adjustments under a budget deal announced by Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D- Wash.) Tuesday evening. The pact restores about $63 billion to agency spending through the end of fiscal 2015, split about evenly between Defense and civilian agencies.

Lawmakers in fed-heavy districts signal support for budget deal
Lawmakers in districts with large constituencies of federal employees are signaling their support for the bipartisan budget deal announced Tuesday even though it would require new federal workers to contribute a greater share of their paychecks to their retirement benefits. The alternatives — another government shutdown or a second year of the steep across-the-board sequestration cuts — would have been worse, they argue.

UnUnder budget deal squeeze, will future feds opt out of TSP?
If the proposed budget deal becomes law, new federal workers will see a total of 10.6 percent of their salaries automatically withheld from their paychecks to cover their retirement benefits. That could lead to them contributing less or not at all to their voluntary Thrift Savings Plan accounts, experts said.