House Budget Plan Extends Federal Pay Freeze to 2015, Increases Retirement Contributions

March 20, 2012 - updated 6:13 pm ET
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The GOP House Budget Committee's fiscal 2013 budget plan proposes extending the federal pay freeze through 2015, cutting the federal workforce by 10 percent, and increasing federal retirement contributions of employees.

The plan, released this morning by Committee Chairman Paul Ryan (R-WI), gave the following specifics that are of particular interest to federal employees:

The federal government has added 147,000 new workers since the President took office. It is no coincidence that private-­-sector employment continues to grow only sluggishly while the government expands: To pay for the public-­- sector's growth, Washington must immediately tax the private sector or else borrow and impose taxes later to pay down the debt.

The federal government's responsibilities require a strong federal workforce. Federal workers deserve to be compensated equitably for their important work, but their pay levels, pay increases and fringe benefits should be reformed to better align with those of their private-­-sector counterparts.

Compensation for federal workers continues to outpace pay for their private-­-sector counterparts. The non-­-partisan CBO recently released a study saying that federal workers are, on average, compensated 16 percent higher than comparable private-­-sector employees.21 Immune from the effects of the recession, federal workers have received regular salary bumps regardless of productivity or economic realities.

The reforms called for in this budget aim to slow the federal government's unsustainable growth and reflect the growing frustration of workers across the country at the privileged rules enjoyed by government employees. They reduce the public-­-sector bureaucracy, not through layoffs, but via a gradual, sensible attrition policy. By 2015, this reform would result in a 10 percent reduction in the federal workforce.

Additionally, this budget freezes federal pay through 2015 and asks federal employees to make a more equitable contribution to their retirement plans. When combined, these proposals will save taxpayers approximately $368 billion over ten years.

Federal Employee Groups Sharply Rebuke Budget Plan

Joseph Beaudoin, president of the National Active and Retired Federal Employees Association (NARFE) stated today, "Chairman Ryan's belief that it is permissible to penalize middle-class federal workers, who protect Americans and keep our nation moving forward, is frightening. Whatever happened to 'shared sacrifice'? What does he hope to gain by prolonging pay freezes, pinching paychecks, and eliminating employees, including those who inspect the safety of our food and nuclear power plants? It's worth remembering that losing one in 10 federal workers means losing 100,000 employees at the U.S. Departments of Defense, Veterans Affairs, Justice and Homeland Security."

American Federation of Government Employees (AFGE) national president John Gage responded to the House GOP budget plan today stating, "Federal employees already have had their pay frozen for two consecutive years, an unprecedented action that will save the government $60 billion over 10 years. And new federal employees will pay four times as much in retirement contributions, saving taxpayers an additional $15 billion. That's a total of $75 billion in savings. It is fundamentally wrong for federal employees to be required, yet again, to serve as the Automated Teller Machine for the nation. Enough is enough."

"The Ryan budget proposes to cut the federal workforce by 10 percent, and with its extension of the pay freeze and proposed pension contribution increases would drive many federal workers out of public service," said the National Treasury Employees Union (NTEU) president, Colleen M. Kelley. "It is almost as though the authors of this budget don't know, don't understand or don't care about the key role federal employees play in helping keep our nation safe, ensuring that our food and medicines are safe and effective, that our air and water are safe, and performing so many other services that people not only expect and want, but need, as well," the NTEU leader added.

To read the full budget plan, go to:
http://budget.house.gov/fy2013Prosperity/