[PAC] Legislative Update for Friday, June 8, 2012

June 8, 2012


LAWMAKERS ONCE AGAIN SINGLE OUT FEDERAL EMPLOYEESNew Legislation Takes Aim at Pay Freeze, Increasing Pension Contributions


Over the past several months, members of Congress have continually looked toward federal employees as the primary source of spending cuts and revenue increases. Among other things, lawmakers have proposed using federal employee staffing and compensation reductions as offsets for payroll tax cuts, unemployment benefit extensions, highway funding, sequester replacement, debt ceiling increases and deficit reduction. Most recently, several pieces of legislation are focused on extending the federal employee pay freeze while another seeks to use pension increases to offset student loan interest rate reductions.On May 31, the House passed by a vote of 402 to 12 the Military Construction and Veterans Affairs and Related Agencies Appropriations Act (H.R. 5854), which does not include funding for a pay increase for federal employees in the Department of Defense and Department of Veterans Affairs, thus freezing these salaries for the third year in a row. In addition, on June 6, the House began debating the FY 2013 Homeland Security Appropriations Act (H.R. 5855), which also does not provide funding for a federal employee pay increase. Federal employees are currently in the second year of a pay freeze expected to generate $60 billion in savings. Although the House vote on H.R. 5854 was bipartisan, Democrats are speaking out against the pay freeze provision and vowing to ensure it is dropped during conference.“I am extremely disappointed that Republicans are asking federal employees to take a freeze in pay for a third year in a row,” said House Democratic Whip Steny Hoyer (D-Md.). Hoyer stressed that, while federal employees have been asked to make numerous sacrifices, millionaires and billionaires remain unscathed. “America’s federal employees, Republicans ought to remember, are themselves middle-class workers and were hit just as hard as the rest of our middle class by the recession and the rising costs of living. Punishing them unfairly for their choice of career only harms our ability to recruit and retain the best workforce possible for the American people.”President Obama has released Statements of Administration Policy against H.R. 5854 and H.R. 5855 that include veto threats. In the statements, the administration objects to any “effort to reduce pay for civilian personnel that would effectively extend the freeze on civilian pay through FY 2013.” The statements emphasize that “a permanent pay freeze is neither sustainable nor desirable” and encourage Congress to support the 0.5 percent pay raised proposed in the president’s budget.In addition, on June 6, the House Appropriations Financial Services and General Government Subcommittee approved the FY 2013 Financial Services Appropriations bill that contains no federal pay raise and cuts funding for several major agencies. The bill, which will now go to the full House Appropriations Committee, typically contains a provision raising federal employees’ pay. Since the FY 2013 bill does not include that language, if it becomes law, federal employees’ pay would be frozen for a third straight year. House Appropriations Committee Minority Leader Norman Dicks (D-Wash.) came out against the legislation, stating that the bill will hurt federal employees and force agencies to decrease the services provided to the public. “This allocation, if enacted into law, would result in substantial reductions in basic services to the public, and furloughs, layoffs and vacancies at a time when employment remains the nation’s top concern,” he said.Federal employee pay is not the only area that has been targeted by lawmakers. On June 1, four Republican leaders sent a letter to the president outlining proposals for funding an extension of the 3.4 percent interest rate for student loans for another year, including one proposal that would pay for the extension by increasing federal employees’ retirement contributions. The increase would be included in the FY 2013 budget and would raise current employee contributions to the Civil Service Retirement System (CSRS) and Federal Employee Retirement System (FERS) by 0.4 percent in each of the next three calendar years (2013, 2014 and 2015) for a cumulative increase of 1.2 percent of pay over current contributions. Previously, the House passed a 5 percent increase over current levels to be phased in over five years in the Sequester Replacement Reconciliation Act (H.R. 5652) (see Legislative Update, May 18, 2012).Senate Democrats quickly rejected the proposals and criticized the House for putting forth concepts without bipartisan negotiations. “A budget is a comprehensive document,” said Senate Health, Education, Labor and Pensions Committee Chair Tom Harkin (D-Iowa). “What they did is, they went in and cherry-picked a few things out. You can’t do that because this is part of a comprehensive budget.” Harkin continued by labeling the proposed offsets as “phony” and stated that the issue is whether Republicans would be willing to sit down and negotiate an agreeable solution.It is clear that federal employees continue to be the target of choice for many lawmakers. As such, PASS members should contact their representative and senators and urge them to oppose any legislation that targets federal employee pay and retirement benefits.




On June 7, the House Appropriations Transportation, Housing and Urban Development, and Related Agencies Subcommittee approved by voice vote its FY 2013 appropriations bill. The legislation provides $51.6 billion in discretionary spending, a $3.9 billion reduction from last year’s level and $1.8 billion less than the amount provided in the Senate version of the bill (S. 2322) (see Legislative Update, April 27, 2012).For the Department of Transportation, the bill appropriates $17.6 billion, which is $69 million below the FY 2012 enacted level. Included in this budget is $12.6 billion for the FAA, a $91 million increase above last year’s level but $3.3 billion below the Senate’s request. For the operations budget, the House bill appropriates $9.7 billion, which is 0.7 percent more than the FY 2012 enacted level and equal to the amount in the Senate bill. Similar to the Senate bill request, the funding includes more than $60.1 million for operations planning activities for the Next Generation Air Transportation System (NextGen), which is slightly less than the FY 2012 enacted levels. Included in the operations budget is $7.5 billion for the Air Traffic Organization (ATO) and $1.3 billion for Aviation Safety (AVS). Both of these amounts are equal to the Senate request. In addition, the legislation includes language directing the FAA administrator to transmit to Congress a report describing “a comprehensive strategy for staffing, hiring, and training flight standards and aircraft certification staff in a format similar to the one utilized for the controller staffing plan, including stated attrition estimates and numerical hiring goals by fiscal year.” According to the legislation, the appropriated amount will be reduced by $100,000 for each day past March 31 that such a report has not been submitted to Congress. For facilities and equipment (F&E), the bill includes $2.7 billion, which is approximately $90 million more than FY 2012 enacted levels and $1 million below the Senate amount. The House bill also requests $175 million for research, engineering and development, which is $7 million above last year’s enacted level and $15 million more than the Senate’s request. The legislation is expected to be considered by the full committee in two weeks.

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