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GOP budget proposals include deep cuts for federal employees

Federal budget proposals would cut about $300 billion from federal workforce.

Federal employees are once again bracing for cuts as the Republican-controlled Congress moves slowly toward an agreement on a federal budget, setting up a confrontation that is likely to continue for much of the year.

While details of the House and Senate versions of the budget differ, both chambers have approved slashing the size of the federal workforce by 10 percent through attrition, increasing the contribution workers make toward their retirement savings and cutting the share of health insurance covered by the government.

Lawmakers are expected to begin the daunting process of reconciling the two proposals when Congress returns from a recess on April 13, but unions that represent federal workers are already sounding alarms.

So is Sen. Ben Cardin, who took several questions about the proposed cuts from employees at the National Institutes of Health in Bethesda during a town hall meeting last week.

"There are some who are very happy when [government doesn't] work well because it feeds into their agenda for a smaller government," the Maryland Democrat told hundreds of employees gathered at the NIH Clinical Center on Thursday.

"The federal workforce has not been treated fairly over the last five or six years."

Among the most worrying cuts for employees is a perennial proposal that would require workers to contribute about 6 percent more of their paycheck to retirement savings — an idea that critics say amounts to a pay cut. It comes from a bipartisan deficit reduction proposal crafted by the Simpson-Bowles commission in 2010.

"That is money that isn't going to be spent in our communities," said Helen Erslev, a Montgomery County woman who works at the NIH as a videographer and who serves as treasurer of the American Federation of Government Employees Local 2419.

"It affects everybody's budget, everybody's kitchen table," she said.

House Republicans note that their budget would trim spending by nearly $5 trillion over 10 years, cuts they said are necessary to further reduce annual deficits and put the nation on a sustainable fiscal path. Most, if not all, GOP lawmakers were elected to Congress on promises to reduce federal spending.

"By demanding Washington live within its means, we are forcing government to be more efficient, effective and accountable," Republican House Budget Chairman Tom Price of Georgia said in a statement.

Congress does not have a strong record of approving budget resolutions — which generally are nonbinding documents that serve mainly to guide the appropriations process later in the year. The last time lawmakers passed a broad spending plan was in 2009.

Congressional budgets, which are not signed by the president, do set topline figures for how much appropriation committees may spend, and they allow lawmakers to raise points of order on the floor to tie up legislation that doesn't fall within those targets.

There are few consequences for failing to deliver a budget, but Republican leaders who took control of both chambers of Congress in January are eager to see the process through as a symbolic show of their ability to govern.

And Republicans have an added incentive this year to try to advance a budget. Through a related process known as reconciliation, the majority party can move some types of legislation through the Senate with a simple majority, rather than the 60 votes usually needed overcome a filibuster. Republicans view reconciliation as their best chance to send a bill to repeal Obamacare to the president's desk.

Even if budget talks fail this year, some of the provisions could influence the appropriations process for the fiscal year that begins Oct. 1. Federal employees have been hit with substantial cuts in recent years after budget negotiations concluded. In 2012, for example, Congress required new federal hires to contribute more than triple the share paid by other government workers to their retirement.

Federal employee pay, meanwhile, was frozen for three years beginning in 2011. The workforce received 1 percent pay raises in 2014 and 2015 and continued to receive bonuses and step increases.

Maryland is home to nearly 300,000 civilian federal employees — about 10 percent of the state's workforce. Several federal agencies, including the Social Security Administration, the National Institutes of Health and the Census Bureau, are based in the state.

Economists say cuts to the workforce can have a particularly pronounced impact on the region's economy.

The House budget proposal, which passed 228-199 on March 25, calls for pegging health care benefit increases for current workers and retirees to inflation. Because health costs traditionally have grown at a faster rate than inflation, that shift would transfer a cost of roughly $60 billion from the government to the workforce.

The legislation also decreases the rate of return in a popular fund in the Thrift Savings Plan, a 401(k)-like retirement plan that has more than 4 million participants. The proposal would save about $32 billion over a decade by reducing its annualized interest rate from just under 2 percent to 0.01 percent.

The specific provisions included in the Senate budget are less clear because drafters don't always reveal the assumptions they build into deciding topline figures. Aides have said that many of those assumptions mirror language in the House proposal.

The measure passed the Senate on a 52-46 vote on March 27.

Jessica Klement, legislative director for the National Active and Retired Federal Employees Association, said the proposed 2016 budget is far worse for federal workers and retirees than those proposed by former House Budget Committee Chairman Paul Ryan, a Wisconsin Republican and the GOP vice presidential nominee in 2012.

"This makes the Ryan budgets look like a picnic," said Klement, whose organization is lobbying against the measure.

"A budget like this sends a very, very powerful message. We consider it a direct attack on effective government."

john.fritze@baltsun.com

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Budget cuts

A look at some of the cuts proposed for federal workers in the 2016 federal budget and the savings over 10 years.

•Most federal employees would pay roughly 6 percent more toward their retirement. Savings: $125 billion.

•The government would require workers to pick up a higher share of health insurance premiums over time. Savings: $61 billion.

•Trims the overall size of the workforce by 10 percent through attrition. Savings: $59 billion.

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