Tom Temin: And let’s dive right into that WEP and GPO. The repeal happened. All the sudden, it melted away fast and it’s gone, both of those provisions for Social Security. But we’ve been getting and I’m sure NARFE has been getting countless queries as when do I get my money? When is this going to happen? I don’t think Social Security has quite got its boots on yet here.

John Hatton: No, they haven’t put out specific guidance on implementation in terms of timing. They have said they’re still evaluating how to implement it. What we do know is that the text of the bill said this is applicable to benefits payable after December 2023. So that should mean you should be accruing these additional benefits. So when it does get put into place, you should be getting that back pay up to that point. Not before that, but up to that point. We’ll be following and seeing how soon and certainly pushing for them to implement this as soon as possible. The only thing I would say, if you are somebody out there who never applied for Social Security benefits because you didn’t think you would get any benefits due to the government pension offset in terms of the spousal or survivor benefits, please apply as soon as possible because if you haven’t applied for benefits, you don’t start to accrue them. So do that. Otherwise, make sure your bank account information is up to date for direct deposit. Your current mailing address is up to date, all that type of stuff. But we’ll certainly be sharing as much information as possible as it becomes available from SSA.

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Tom Temin: And who is likely in terms of their employment history to not get anything out of this repeal?

John Hatton: So this applies to people who had a pension from non-covered employment. So that’s for the federal community. That’s the civil service retirement system annuitants. So it doesn’t apply to FERS annuitants in terms of WEP or GPO. These provisions apply simply because you have earned that pension from non-covered work. You separately earned your Social Security benefits through private sector employment or otherwise other covered employment where you’re paying payroll taxes in the Social Security than you are getting penalized by WEP. So that goes away. Government pension offsets a similar reason for applying.

Tom Temin: Right. So it might be incumbent on Social Security to post something about who actually does benefit and who does not because it’s not universal.

John Hatton: Right. They do have information posted on their website about this. So we’re posting information, frequently asked questions as well, on our website and trying to make sure everybody understands what is going on.

Tom Temin: All right. And at the same time, we are on the very doorstep of a new administration, but we still don’t have any kind of permanent appropriations or full appropriations for 2025 yet. That’s not till March when the CR expires, although nothing’s stopping them from doing something before March. But they probably won’t do it until March. And the president-elect, next week, the president said he’d like everything wrapped up in a big bill. That leads to the topic of reconciliation. And that’s something you have concerns about there at NARFE.

John Hatton: Yeah. So there will be the government funding for the remainder of this fiscal year. But then what we’re concerned about with budget reconciliation, that’s different from that. So that usually requires 60 votes in the Senate. Appropriations bills are still subject to filibusters. So you’re going to need bipartisan support for those funding bills. Budget reconciliation is a different story, though. You can pass a budget resolution with 50 votes in the Senate and you can then pass reconciliation legislation pursuant to that with 50 votes in the Senate. That means Republicans in Congress who have majorities in both the House and Senate are looking to use that method to pass legislation on a partisan basis. Some of the topics they’re looking at are extending the previous Trump tax cuts and maybe having more. They’re looking at border security measures. They’re looking at energy policy measures as well. There’s a debate whether they’re going to split into have one bill or split into two. But they’re talking about having that be deficit neutral under some definition of deficit neutral. To do that, especially with those tax cuts, you’re going to need spending cuts. There was recently released a kind of a menu of different options for those spending cuts. Among those include cuts to federal benefits. So specifically increasing contributions to FERS for current employees. The specifics are not out there on this, but if they’re talking about half and half of the normal cost contributions, that could be essentially close to a 5% increase for the newer employees and even more up to 8 or 9% increase in what you’re paying out of your salary to go to those benefits. Bringing you back this proposal to essentially reduce the rate of return on the TSP G Fund to near zero. That would say something like $47 billion, according to their sheet. And then they identify other federal employee benefit cuts to the tune of $32 billion. So all totaled, they’re looking at options that could be near $120 billion worth of cuts to federal benefits.

Tom Temin: We’re speaking with John Hatton. He’s staff vice president of the National Active and Retired Federal Employees Association. So real money then, coming?

John Hatton: Yeah.

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John Hatton: There. I mean, this would not be, it sounds like it could even create a third tier, possibly the way it shakes out of contribution people for their pension. There was some reform a number of years ago so that new employees after that point had a higher contribution percentage than existing employees. There could be a third tier, then.

John Hatton: Could be a third tier. They could apply it to existing employees as well. In the past, NARFE and other groups that have been advocating on this have been successful in limiting it to just applicable to new hires. But proposals have certainly been directed at current employees as well. And so if they’re looking for, you can get more savings if you apply it to existing employees too. So it could be a smaller increase in contributions for existing employees or it could be a larger increase for new hires. I think the story right now is that these cuts are certainly on the table. Exactly what they look like is up for debate and whether they get in there will certainly be up for debate. And there’s very tight margins in the House and there’s certainly people who are not generally supportive of these types of things that are part of the more centrist group of Republicans. So we’ll be trying as hard as possible to try to convince enough House Republicans that these should not be part of that package.

Tom Temin: And I was looking at a photo recently of the first day of the Biden administration back in 2021, and he had a stack of pretty blue folders with executive orders in them. I think it was 16 or 17. Apparently, the Trump people have looked at that photo because they’re saying on the first day, not 18, 19, 20, but 100 possible executive orders. Yeah. Anything could be happening in those.

John Hatton: Right. Well, we expect a few things to come out in the first day or two, or at least the first week. One of those would be something that either reinstitute Schedule F or starts to take actions to get there. Exactly what that’s going to look like, we’re not sure, but we certainly expect Schedule F out to come back. That would create a new accepted service schedule in the federal government where you would take people out of the competitive service and put them into accepted service where you would not have merit-based protections. So you could be fired for any reason at all, including your partisan loyalties. That is a concern for NARFE. We do not think that is the right way to go for the civil service. It has been successful being nonpartisan and professional. I think that raises questions about being able to maintain the rule of law and respect for the constitution. People who serve in the civil service take an oath to preserve the Constitution and they should not be taking an oath or be tied to the loyalties of an individual in charge. And that goes for Republicans or Democrats in the White House. So we’re certainly concerned about that and expect that to come back. We expect a return to office mandate to come back. There’s probably not much to be done about that unless you have a collective bargaining agreement that could challenge that. So how soon that is implemented, it’s unsure if they’re going to have it be right away the next day or the next week or what. So we’re concerned about a lot of different executive actions that will be coming down the pike.

Tom Temin: Well, it’s going to be an interesting Monday.