Six Areas Where the New Congress Could Squeeze Feds

The midterm election did not go the way federal employee advocates had hoped.

Most of the candidates backed by federal labor groups lost, and those unions are already expressing concern about what a Republican-controlled Congress will mean for their members.

It is not hard to see where that fear stems from; Republicans, at times with President Obama’s blessing, have repeatedly used the federal workforce as a mechanism for reducing the federal debt and pointed fingers at malfeasant federal employees as responsible for all of government’s ills.

Federal employee unions say their members have sacrificed enough, contributing -- according to their calculations -- $138 billion toward deficit reduction.

Not everyone agrees, however. Obama has a history of compromising on issues important to federal employees and his post-election call for renewed compromise could make feds’ pay and benefits a prime target during his final two years in office.

Here’s a look at where feds should be the most concerned.

1. Retirement pensions

Obama has twice agreed to raise the percentage of each paycheck federal employees must contribute toward the Federal Employees Retirement System. In 2012, Congress approved a measure to increase the contribution rate from to 3.1 percent for new hires, from 0.8 percent. As part of a 2013 budget deal, feds hired in 2014 and beyond pay 4.4 percent of their salaries toward their pensions. Military retirees were scheduled to receive lower cost of living adjustment for their benefits, but that plan was later scrapped by Congress.

So could it happen again? Absolutely. Reps. Darrell Issa, R-Calif., and Paul Ryan, R-Wis., recently sent a letter to the Congressional Budget Office asking for evaluations on a series of proposals to overhaul FERS, including “adjusting the retirement contributions of federal employees.” The lawmakers’ other suggestions included altering the formula for the defined benefit, as well as reducing the pension while increasing the role of the Thrift Savings Plan.

2. The Ryan budget

The good news for federal employees: Ryan is likely to move over to the House Ways and Means Committee, meaning he will give up his post as budget point man. The bad news: Ryan -- a former vice presidential nominee and a 2016 contender -- is still a major player in Congress and his twice House-backed budget would face a much friendlier Senate if a similar bill were sent over in 2015.

Ryan’s budget, among other things, called for feds to pay 6.35 percent of their paychecks toward their pensions. It also outlined a 10 percent, attrition-based federal workforce reduction plan. Collen Kelley, president of the National Treasury Employees Union, said after the election she was worried about “the return of the Ryan budget.”

The blueprint would restore full, pre-sequester funding to the Defense Department, which he proposed paying for by cutting nondefense spending by nearly $800 billion by 2024.

3. Sequestration

The aforementioned budget deal crafted by Ryan and Sen. Patty Murray, D-Wash., provided agencies with temporary relief in 2014 and 2015 from the mandatory budget caps implemented through the 2011 Budget Control Act. Sequestration was designed as a 10-year program, creating the possibility -- or perhaps probability, in the soon-to-be increasingly divided government -- of a political showdown when the 2016 appropriations process starts next year.  

In 2013, some federal agencies forced their employees to take unpaid furlough days -- though fewer than they originally anticipated. Before the 2013 budget deal was struck, most agencies said they would not require furloughs in the future. However, two years removed from contingency planning and with continued uncertainty about future funding, agencies could be less prepared for dramatically reduced budgets than they once were.

Even if feds avoided furloughs, hiring freezes could kick back in and mission-critical operations could once again be in jeopardy.

4. Pay freeze

Ever on the mind of federal workers, the annual pay raise presents another area in which Obama has shown a willingness to bend. Obama proposed a two-year pay freeze beginning in 2011, and accepted a third-consecutive year without a pay increase in 2013. Feds received a 1 percent raise in 2014 and are on track to receive the same salary bump in 2015, but even that increase was historically low.

J. David Cox, national president of the American Federation of Government Employees, vowed to fight for a “meaningful pay raise that closes the gap between the federal and private sectors.” One recent study found that gap was 35 percent.

Outside of a few fed-friendly lawmakers, no one on Capitol Hill -- or in the White House -- has shown much interest in giving federal employees a bigger, if any, annual raise.

5. Civil service protections 

In the wake of the patient scheduling scandal at the Veterans Affairs Department earlier this year, lawmakers from all stripes wanted to hold the federal executives responsible accountable. Republicans repeatedly called for a loosening of the red tape that typically ties up the federal firing process. Some Democrats sought to ensure some due process rights for the department’s employees, and ultimately a compromise was struck that allowed for an expedited appeals process.

Since Obama signed that bill into law, the Republican-controlled House has moved on two separate bills to ease the firing of certain federal employees. While those measures have, to date, received no action in the Democratic-controlled Senate, there is no reason to suspect the same will apply when Republicans take over. In fact, in a Wall Street Journal op-ed, soon-to-be Majority Leader Mitch McConnell, R-Ky., and House Speaker John Boehner, R-Ohio, said one of the most pressing issues come 2015 is tackling “an antiquated government bureaucracy ill-equipped to serve a citizenry facing 21st-century challenges, from disease control to caring for veterans.”

6. Government shutdown

This would perhaps be higher on our list, if not for assurances from McConnell a shutdown was outside the realm of possibility.

“There is no possibility of a government shutdown,” McConnell told Time. “Remember me? I’m the guy that gets us out of government shutdowns.”

Still, McConnell may have difficulty convincing the most conservative members of his caucus to compromise with Obama on spending bills. The first test will come before the Senate switches control, as the current continuing resolution is set to expire Dec. 11.

(Image via Orhan Cam / Shutterstock.com)