GOP budget plan includes pay freeze extension, workforce reduction

This story has been updated.

Congressional Republicans proposed in their fiscal 2013 budget plan extending the federal pay freeze through 2015, cutting the size of the federal workforce by 10 percent and increasing employee contributions to retirement plans.

The plan, unveiled Tuesday by House Budget Committee Chairman Paul Ryan, R-Wis., claims that reforming federal retirements and cutting the size of the workforce would save taxpayers approximately $368 billion over 10 years.

“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,” the proposal states. The plan describes the 10 percent reduction to the federal workforce as a “sensible attrition policy” to reduce bureaucracy without resorting to layoffs. It does not detail how Republicans would change federal employees’ retirement contributions, but “asks federal employees to make a more equitable contribution to their retirement plans.”

The Republican budget request is a response to President Obama’s budget proposal, which would end the two-year federal pay freeze by giving civilian workers a 0.5 percent pay hike in 2013. Under payroll tax cut legislation signed in February, employees with less than five years of federal service and hired after Dec. 31, 2012, will have to pay 2.3 percent more toward their pensions, making their total defined benefit plan contributions 3.1 percent of their pay.

According to a statement from the National Active and Retired Federal Employees Association, the $368 billion in cuts to federal compensation would cost employees more than half of what the payroll tax extension deal and the current federal pay freeze cost them combined.

Although the plan acknowledges the “important work” of the federal workforce, it cites figures that suggest public employee compensation outpaces that in the private sector and calls federal workers’ compensation “immune from the effects of the recession.”

The American Federation of Government Employees disagrees: “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,” AFGE President John Gage said in a statement Tuesday. “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.”

National Treasury Employees Union President Colleen Kelley took issue with both the substance and rhetoric in the Republican proposal in her statement Tuesday.

The Republican-proposed reforms could make federal jobs less attractive and a smaller workforce could lead to “a substantial increase in the use of unaccountable private contractors and a much higher cost of providing services,” Kelley said.

“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,” she said.

The Ryan budget also came in for tough criticism at a Tuesday panel discussion at the Center for American Progress Action Fund. Gene Sperling, director of the White House National Economic Council, and Rep. Chris Van Hollen, D-Md., ranking member of the House Budget Committee, assailed the plan as “skewed toward the wealthy at the expense of the middle class” and society’s most vulnerable.

Asked about the proposed 10 percent cuts in the federal workforce, Van Hollen said, “We’ve consistently seen a Republican assault on the public servants who do the nation’s business every day, from the CIA professionals who found Osama bin Laden to the National Institutes of Health people who investigate cures for disease, to the Food and Drug Administration people who protect food safety.” He said Ryan’s latest plan would “take a hatchet across the board,” even though the size of the federal workforce as a percentage of the population has been reduced “and has become more efficient.”  The Republican strategy's  “simple-sounding solutions,” Van Hollen added, would include cuts that would apply to Pentagon procurement specialists and auditors, and reducing them would be “a sure-fire way to get more-expensive contracts and more fraud and abuse.”

Sperling said he was also “disappointed” that Ryan’s plan proposes relieving the Defense Department from the Budget Control Act’s threat of sequestration just months after negotiations produced what both parties had agreed was an “offensive” threat of “mutually assured destruction.” Such a move, he said, would reverse for ideological reasons the one area of bipartisan consensus that is in the legislation and thus “actually create an incentive not to compromise.”

Charles S. Clark contributed to this story.