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Congress readies for next fight over federal pay

Congressional Republicans are stepping up their rhetoric on federal employee pay, positioning the issue as a central bargaining chip in negotiations next month over raising the debt ceiling and keeping the government open.

House GOP leaders will hold a vote this week on legislation to overturn an executive order President Barack Obama signed last month to provide a 0.5 percent pay increase to the federal workforce — the first raise since the administration imposed a government-wide pay freeze in 2010.

The effort comes days after a Republican lawmaker from South Carolina tried to strip federal employees of a transit tax benefit in an amendment to a disaster relief bill for victims of Hurricane Sandy. The amendment never made it to the House floor but is likely to re-emerge later this year.

"At a time when we should be focused on helping families get on solid financial footing, members of Congress, the vice president, Cabinet secretaries and federal employees don't need a raise," said House Majority Leader Eric Cantor, a Virginia Republican. "We simply can't afford it."

The House legislation is unlikely to advance in the Democratic-controlled Senate, but the effort keeps pressure on the issue as lawmakers head into larger fights over raising the nation's $14.6 trillion debt ceiling, extending agency funding to avert a government shutdown and dealing with $1.2 trillion in across-the-board spending cuts.

Congress must deal with the debt ceiling and the deep cuts, known as sequestration, by the end of next month.

Republicans have long sought reductions to the federal employee workforce as a way to cut the budget deficit, which is on track this year to top $1 trillion for the fifth straight year.

Those cuts would have a disproportionate economic impact in Maryland, which is home to more than 300,000 federal workers — about 10 percent of the state's civilian workforce.

The federal government spends more than $1,900 per capita in Maryland on salaries and wages, more than twice the national average, according to a 2006 study by the Tax Foundation.

In addition to the two-year pay freeze, which the Obama administration estimated in 2010 would save $60 billion over a decade, lawmakers voted last year to increase the contributions newly hired federal employees make to their retirement plans. Beginning with those hired this year, workers are paying 3.1 percent of their salary toward retirement instead of 0.8 percent.

Lawmakers in Maryland and Virginia have vowed to resist additional cuts.

"Efforts by House Republicans to constantly use federal employees as a piggy bank — especially when the vast majority of their caucus refuses to ask millionaires to contribute more to reducing our deficit — are unconscionable," said Rep. Chris Van Hollen, a Montgomery County lawmaker and top Democrat on the House Budget Committee.

"We cannot keep asking them to contribute more than their fair share," he said.

Obama signed an executive order Dec. 27 to grant the 0.5 percent raise to all federal employees, including members of Congress. Opponents estimate that the raises would cost taxpayers $11 billion over the next decade.

Lawmakers, who earn $174,000 a year, overturned their own raise as part of the agreement this month to avert the "fiscal cliff." Separately, the House voted 287-129 to cancel the increase for all federal workers, but that legislation is not likely to receive a vote in the Senate.

Unless the Senate acts on the measure, federal workers will begin seeing the pay increase in April.

A Congressional Budget Office report last year found that federal government workers earn 16 percent more than their counterparts in the private sector. But some have disputed the report's methodology. U.S. Department of Labor statistics indicate the opposite conclusion: a pay gap that favors the private sector.

House Republicans also considered excluding federal employees from a commuter benefit that allows public- and private-sector workers to set aside up $245 in pretax income each month to pay for mass transit. The amendment, offered by Rep. Mick Mulvaney of South Carolina, was the first time lawmakers raised the idea of denying enrollment only to federal workers.

The proposal drew opposition from federal employee unions.

"Tens of thousands of federal workers around the country, including a significant number of those who live and work in the Washington, D.C., area, use public transportation every day to get to and from work," Colleen M. Kelley, national president of the National Treasury Employees Union, said in a statement.

"Eliminating the transit subsidy for federal workers makes no sense in the bigger picture … since it helps reduce road congestion and associated pollution," she said.

The renewed emphasis on workforce cuts comes as many Republicans are also threatening to shut the government down when its current stopgap budget authority runs out March 27.

Sen. Pat Toomey of Pennsylvania, for instance, told MSNBC this month that "Republicans need to be willing to tolerate a temporary, partial government shutdown" to gain leverage for deeper spending cuts.

While talk of a shutdown is widely viewed as a negotiating tactic, it has nevertheless added to uncertainty for federal officials. The Office of Management and Budget last week directed federal agencies last week to dust off contingency plans in case deep spending cuts arrive in 2013.

"The salary freeze — along with the threat of furloughs, layoffs and another complete government shutdown are a punishment in search of a crime," said J. David Cox Sr., president of the American Federation of Government Employees.

"Federal employees had no part in the financial crisis and the ensuing recession," he said, "and they should not be forced into penury to reduce a deficit they had no part in creating."

john.fritze@baltsun.com

twitter.com/jfritze

Triple budget threat

In coming weeks, lawmakers must make several difficult budget decisions that could affect federal employees.

•The nation will hit its $14.6 trillion debt ceiling by early March.

•About $1.2 trillion in spending cuts, delayed by this month's "fiscal cliff" deal, will automatically go into effect at the end of February.

•The stopgap budget funding the government will expire on March 27.

Copyright © 2014, The Baltimore Sun
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