'Fiscal cliff' fix especially steep for workforce

WASHINGTON — — It's been a difficult year politically for federal workers. It's about to get worse.

As Congress scrambles for solutions to looming automatic spending cuts and expiring tax breaks, lawmakers and budget experts say the federal workforce is sure to be targeted to pay for year-end legislation needed to keep the nation from careening off the so-called fiscal cliff.


The scope of the proposals will hinge on the results of the election in November, but few doubt that the cuts will come in some form.

"Federal employees will continue to be at the top of the list for those who are proposing all this hostile legislation," said Colleen M. Kelley, president of the National Treasury Employees Union, which represents thousands of federal workers in Maryland. "I think it will not only continue but probably increase."


The nonpartisan Congressional Budget Office predicts the nation could slip into another recession if Congress allows Bush-era income-tax cuts to expire at the end of the year and does nothing to halt more than $100 billion in automatic spending cuts slated to take effect in January.

But the cost to address both of those looming challenges is enormous.

And that has lawmakers — mostly Republicans — tossing around proposals to extend the federal pay freeze, increase employee contributions to retirement accounts or significantly reduce the overall size of the federal government. Kelley's union is tracking some two dozen bills that would make one or more of those cuts.

House Armed Services Committee Chairman Howard P. "Buck" McKeon, a California Republican, has proposed reducing the total workforce 10 percent by prohibiting agencies from hiring more than one employee for every three that retire or quit. Sen. Ron Johnson, a Wisconsin Republican, is carrying a similar bill in the Senate.

Johnson is also one of several lawmakers to propose extending the federal pay freeze.

"It's not trying to go after anybody," Johnson said of his proposals. "Taxpayers in the private sector are the ones that are footing the bill and it's only fair to say, 'Okay, what is the public sector making in terms of pay and benefits?' We can't afford to overpay people for their work."

Debate over whether federal employees are compensated more than private sector employees has intensified this year. A CBO report in January found that, on average, the federal government paid 2 percent more in civilian salaries than the private sector and 48 percent more in benefits. But the Bureau of Labor Statistics, which uses a different methodology to measure compensation, finds a 26 percent pay gap that favors private employees.

Because of the concentration of federal employees who live in the state — nearly 300,000, or about 10 percent of the state's civilian workforce — Maryland lawmakers have been among the most ardent critics of proposed cuts.


"Republicans view federal employees as this place they can continually come for offsets," said Rep. John Sarbanes, a Baltimore County Democrat. "You don't want to undermine the ability, the competence and the morale of the federal workforce at precisely the moment that so many Americans are going to be relying on these critical agencies."

Darlene Monteagudo, a 52-year-old Baltimore resident who has worked for the Social Security Administration for more than two decades, said she is wary of the changes that might be coming.

But she also said employees haven't heard anything recently about the possibility of new cuts — and it's not been a topic widely discussed among her colleagues.

"Congress does whatever they want with our pay," said Monteagudo, a member of the American Federation of Government Employees.

While mostly political, the debate so far in Washington over the size of the federal workforce has led to tangible reductions. In addition to the two-year pay freeze the Obama administration imposed in 2011, lawmakers also raised $15 billion in February by requiring employees hired after this year to pay 3.1 percent of their salary toward retirement — a 2.3 percentage-point increase over what current employees pay.

All but two Democrats in Maryland and Virginia voted against that change — which paid for an extension of jobless benefits for the long-term unemployed. Despite strong opposition in the region, the legislation received wide majorities of support in the House and Senate.


Automatic budget cuts, created as part of the compromise agreement to raise the nation's debt ceiling last August, pose a significant risk to the federal workforce at large. But analysts say that any agreement on the budget, taxes and deficits to avoid those automatic reductions would also likely mean cuts for federal workers.

Any so-called "grand bargain" on the budget would likely begin with the outlines proposed by the bipartisan Simpson-Bowles commission in 2010. That report called for freezing federal pay for three years and increasing retirement contributions to about 6 percent.

"I would be surprised if the eventual budget deal does not include some reforms in federal retirement programs," said Charles Konigsberg, a veteran federal budget analyst.

Several union leaders said they are already preparing for the legislative battles to come. The National Active and Retired Federal Employees Association, which represents about 284,000 active and retired employees in Maryland, recently launched a campaign aimed at confronting the proposals expected to emerge in the weeks after the election.

"We are definitely aware that we're under attack," said Julie Tagen, legislative director for the group. "We're now going to be in the fight of our lives."