Trump’s federal retirement cuts ‘dead on arrival,’ not focused on existing employees, senators say

The President’s proposed changes to the federal employee retirement system in his 2020 budget request is the drawing the ire of members of Congress, as has become customary after three consecutive years of such recommendations.

But at least one Republican is trying to send a clear message: the retirement system for existing federal employees shouldn’t change, but benefits for future employees should.

“I want you to know that our focus has been on getting those changes made for prospective new hires, not for people who are currently in the system,” Sen. James Lankford (R-Okla.) said Tuesday in a video message to members of the National Active and Retired Federal Employees Association (NARFE) at the organization’s legislative conference in Alexandria, Virginia. “For all of you who have been faithfully serving, you came in with a promise and with a standard of what would be there for you, and we want to make sure that’s maintained.”

Lankford serves as chairman of the Senate Homeland Security and Governmental Affairs Subcommittee on Regulatory Affairs and Federal Management. The subcommittee has explored, for example, challenges with the current federal hiring process and gaps in training for managers, but its members haven’t put forth many legislative fixes.

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“We do have to look at the long-term fiscal health for all taxpayers for the federal government, so we are trying to look long term for new hires, what might that look like for them?” Lankford said.

Others, mostly Democrats, have been more pointedly vocal with their dissent.

“You have a laundry list this long of activities that, frankly, are unfair, are wrong [and] don’t make sense in terms of our current workforce or the commitment that we owe you as retirees,” Sen. Mark Warner (D-Va.) told NARFE members Tuesday. “The only good news is, the President’s budget has a half-life of negative time. It is dead on arrival, and will not become law in any fashion.”

The proposals consist of an elimination of the special supplement for participants in the Federal Employee Retirement System (FERS) who are statutorily forced to retire before reaching Social Security eligibility, an elimination of the annual cost-of-living-adjustment (COLA) for FERS, a cut in the COLA formula for participants in the Civil Service Retirement System (CSRS) and a move to use the average of an employee’s highest five years of salary instead of an employee’s highest three years of salary.

In addition, the President’s budget request recommends an increase in federal employee contributions by 1 percent each year.

“Look around this room and you’re seeing probably the group that the President has targeted more than anyone else in the whole budget,” Warner said.

Sen. Chris Van Hollen (D-Md.) sparred with Russell Vought, acting director of the Office of Management and Budget, on the administration’s retirement and pay proposals for federal employees at a Budget Committee hearing earlier this week.

Van Hollen confirmed the White House didn’t include a federal pay raise in its 2020 proposal.

“We don’t, but we have a proposal in the budget to ensure that performance is rewarded at federal agencies so that high performers can get raises [and] be retained,” Vought said. “We think it’s an important aspect of this budget.”

Vought also referenced a 2017 Congressional Budget Office study, which found that on average, government spends 17 percent more on federal employee compensation than their counterparts in the private sector. Some federal employees, especially those with higher degrees or specialties, are paid less than the private sector colleagues, CBO said.

“For those who are underpaid, you’re not giving them even a cost of living increase,” Van Hollen said. “You’re effectively cutting their pay. You have a proposal in here to increase the contribution that every federal employee has to give to their pension.”

Warner, meanwhile, said he feared these proposals would only incentivize more federal employees to leave public service. He heard from federal employees during the recent shutdown who questioned why they were working for government — and if they should continue.

NARFE members echoed Warner’s concerns. They told members of Congress on multiple occasions they were concerned the next generation didn’t have the same desire they once did to enter public service.

“When over 30 percent of our existing federal workforce has the right to retire within five years, why keep climbing up the hill if the rock keeps rolling down on top of you all the time?” Warner said.

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