GOP caucus budget cuts feds’ retirement, health benefits

Federal Drive

GOP caucus budget cuts feds’ retirement, health benefits

The Republican Study Committee, a caucus of House conservatives, laid out a budget blueprint that increases federal employees' pension contributions and...

Jolie Lee

March 28, 2012 12:38 pm

2 min read

The Republican Study Committee, a caucus of House conservatives, laid out a budget blueprint that increases federal employees’ pension contributions and incentivizes feds to enroll in lower-priced health plans.

The payroll tax cut extension deal passed last month increased pension contributions for future feds by 2.3 percent, starting in 2013. But the RSC plan would apply that increase to current feds as well. Currently, employees in the Federal Employees Retirement System pay 0.8 percent of their paychecks toward their pensions and their agency pays 11.7 percent.

The caucus said this pension provision would save $110 billion over a decade.

The plan also calls for slowing down the growth of how much the government pays toward the Federal Employees Health Benefit Program.

“This budget would offer a premium support for the FEHB program that would cover the first $5,000 of an individual premium or the first $11,000 of a family premium beginning Jan. 1, 2014,” according to RSC’s budget.

The caucus also wants to change the way inflation is calculated, which would result in lower increases for social security, FERS and military retirement systems. The budget plan proposes replacing the consumer price index to calculate inflation and using a chained CPI instead, which assumes consumers buy lower-cost substitutes in a down economy.

NARFE, representing federal employees and retirees, has told Federal News Radio that a move to a chained CPI does not take into account rising health care costs.

Rep. Jim Jordan (R-Ohio), RSC chairman, and Rep. Scott Garrett (R-N.J.), RSC budget and spending task force chairman, said on the caucus website, “The RSC budget represents a clear, practical way to cut spending, balance the budget, and get the government out of the way of the way so our economy can begin growing again.”

The RSC’s budget plan is the latest of several proposals released in recent days in response to the fiscal 2013 budget outlines from the administration and House Budget Committee Chairman Paul Ryan (R-Wis.) Most of the proposals have targeted federal pay and benefits as a way to cut spending.

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