With time running out, politicians in pre-election panic mode and the government running on financial fumes, what are the odds Uncle Sam will boost his buyout package from $25,000 to $40,000? Late as it is in the day, the bigger buyout might cease being the three-legged horse in the race. Here’s why:

The federal retirement “tsunami”, which experts first predicted in the late 1990s, still hasn’t happened. Instead of leaving leaving in droves, tens of thousands of retirement-eligible feds remain on the payroll for a variety of reasons: Patriotism, fear of boredom, fear that they won’t be able to afford retirement because of small-to-zero inflation adjustments (COLAs) because of near record low oil prices. For whatever reason, the gray tidal wave hasn’t taken place. In recent months, the number of feds putting in for retirement has actually dropped below even the most conservative estimates. The fear theory of a massive brain drain has shifted to the what-if-they-work-till-the-drop scenario. While some federal jobs have a mandatory retirement age (law enforcement, air traffic controllers) most do not.

Along comes the American Federation of Government Employees with a most interesting proposal. Raise the buyout amount to $40,000 for Defense Department civilians and get an immediate and long-term reduction in the payroll. AFGE is the union with the most DoD members. So how does it make a case for almost doubling the amount of the buyout? Why and how would it “save” money? Simple. The government’s GS (general schedule) pay system has 15 grades. Under the time in grade system, most employees get a 3 percent raise (in addition to any general pay raise) every one, two or three years. What that means in Kansas City, for example, is that a brand new GS 11 has a starting salary this year of $59,318, whereas somebody at the top of that grade in KC makes $$77,114.

The Washington-Baltimore area has, for obvious reasons, a large percentage of workers in high-grade, higher-paid jobs. A brand new GS 13, for example, would be paid $92,145 compared to someone at the top of that grade whose salary, right now, is $119,794.

In the New York City area, the spread between a new replacement, Step 1 GS 9 ($55,100) employee for someone at the top of the grade ($71,920) is considerable. Replacing a GS 13 employee at the top step of the grade ( $124,037) with a mid-career GS 12 employee ($90,932) would quickly pay for itself, AFGE has told Congress, even with the one-time $40,000, which is subject to taxes and other deductions.

Houston, Austin and Dallas-Fort Worth have their own federal locality pay levels that are generally higher than many other cities. The difference between a newly minted Grade 12 in Austin vs. a long-time employee in the same grade level is $21,333 per year.

Why a Defense-only $40,000 buyout? The original buyouts (under the Clinton administration) were set at $25,000 and limited, at first, to DoD. The White House wanted to downsize the federal workforce by almost a quarter of a million jobs. It did it by targeting buyouts to blue collar workers who had veterans preference job protection, a large-scale contracting out effort and relatively small numbers of reductions in force (RIFs), which is what the government calls a layoff. Later, the buyouts were extended to other agencies.

But $25,000 in 2016 doesn’t buy what it did in the 1990s. AFGE’s Don Hale, chairman of the AFGE Defense Conference, says the union is pushing for inclusion of the $40,000 buyouts in the NDAA (National Defense Authorization Act). The $40K buyouts are part of the Senate version. The trick is to get them in the House version too, or approved as part of a conference agreement. With the clock ticking, it’s anybody’s guess what, if anything will happen. This year. But it could lay groundwork for a sweeter buyout in 2017, which could be extended to other agencies depending on what kind of changes the Trump/Clinton administration wants to make in revamping government.

Nearly Useless Factoid

By Michael O’Connell

Hummingbirds feed their young tiny insects and spiders as well as nectar and pollen.

Source: Birds and Blooms

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