Tom Temin Commentary

Time to rethink federal pay and benefits

No one gets paid what they deserve. But everyone deserves a little stability.

Tom Temin@tteminWFED

February 11, 2020 9:47 am

3 min read

You can reasonably expect federal employees to roll their eyes at the 2021 budget proposal from the Trump administration. Like administrations before, it proposes increasing the percentage of pay they contribute to their pensions. Carelessly reported as a “cut” in benefits, it’s more analogous to a tax hike.

Ending cost of living adjustments for Federal Employee Retirement System (FERS) retirees and recalculating cost of living adjustments (COLAs) for Civil Service Retirement System (CSRS) employees — those feel more like cuts in that you’d get less over time than you would if those were left alone. Although technically the changes amount to reductions in future benefits growth, not strictly cuts. Ditto for the time-worn idea of calculating annuities from the high-five average salary years, instead of the high-three average.

The administration says its proposals would save close to $90 billion over 10 years.

If I were a fed, I’d be saying, well okay, the federal pay and benefits package is still one of the best deals around, but what about the trends?

This is what I dislike about the year-by-year approach to snipping here, trimming there, clipping over there on the back. It’s like getting a haircut from your big brother. The resulting mess makes you want to buzz off the whole thing and start over.

President Trump has plenty of precedent in fiddling around with pay and benefits. Under President Obama, feds endured a three-year freeze, although Congress had some complicity in that. Still, a former union president remarked to GovExec in 2017 that Obama’s predecessor, George W. Bush, had a better track record on raises than he, Obama, did.

Then there was the cancellation of the Presidential Rank Awards program in 2013. Obama agreed with, and signed, the bill that first raised the retirement contribution for new federal employees to 3.1 percent of their pay.

So you can’t really label the tinkering as a totally Republican or Democrat thing. Under Trump, a Democratic House and a Republican Senate, federal employees will finally have paid parental leave.

As the 2021 budget proposal shows, no one is prepared to take on a comprehensive look at civil service reform. True, the Republican Study Committee just put out its 100 “commonsense” solutions to a better government report. It stakes out several federal employment positions unlikely to get any Democratic support — starting with the proposition that “federal government employees receive on average 17% more in total compensation, when benefits are included, than their counterparts in the private sector.”

Who really knows? Try Googling for “Google average salaries” and see the meaningless ranges you come up with. Google is, we know, generous on 401K matching, paid vacation and family leave, and bringing your dog to work. It automatically enrolls employees in that 401K — at 10% of the salaries. But there’s no defined benefit pension plan.

In a perfect world, here’s what Congress and an administration would ask:

“If we were starting today, what should a pay and benefits system look like for a high-quality civil service system in the 21st century that supports a high-quality bureaucracy at a competitive price to taxpayers?” Or something like that.

When FERS replaced CSRS, the government survived nicely with two plans, one of which by definition would fade out. Maybe the level of annual raises will always be subject to debate. Ultimately what someone gets paid depends on a combination of what they’re worth and what the market will bear. Few get what they think they deserve. But a reset of the current system could also assure at least the stability people in public service do deserve.