Why a Chris Christie Presidency Could Mean Major Cuts to Feds' Benefits

Another former federal employee has become a 2016 presidential contender.

New Jersey Gov. Chris Christie, a former federal prosecutor at the Justice Department, officially threw his hat into the ring on Tuesday, joining the long list of Republican candidates seeking the White House in next year’s election. Since being elected to the governor’s mansion in Trenton, N.J., in 2009, Christie has sought to drastically overhaul benefits for public employees, offering a glimpse into what his presidency could mean for the federal workforce.

Christie’s first run-in with federal employee issues came as he was considering his gubernatorial run. As a federal employee, he was subject to Hatch Act provisions preventing him from publicly discussing his political ambitions. A watchdog group has accused him of violating those laws, but the Office of Special Counsel -- which enforces the Hatch Act -- said it would not be able to pursue discipline of the governor since he no longer holds federal office.

As governor, Christie has fought tenaciously -- and quite publicly -- to modify the pension system for state employees. He highlighted those reforms in his announcement speech Tuesday.

“We made the difficult decision to reform pensions and health benefits,” Christie said, “and we continue that fight today.”

In a controversial move in 2010, Christie signed into law a bill to decrease pension benefits for future employees. In 2011, he signed a much grander law that raised most public workers’ contributions into their defined benefit funds from 5.5 percent of their paychecks to 7.5 percent, suspended cost-of-living adjustments for retirees and raised the retirement age.

Christie compromised by agreeing the state would pay more toward the pension fund, but later backtracked and invested far less than originally promised. That decision has left New Jersey as one of the states with the largest unfunded pension liabilities.

The governor has since said his initial reform did not go far enough, and has pitched more changes that would switch state employees to a defined benefit, defined contribution hybrid -- much like the current federal system. The proposal, however, would overhaul the benefits for current government employees. Generally, changes to federal employees’ pensions have grandfathered in active workers and restricted the changes to new hires. Christie also proposed freezing the existing pension system, creating a “cash balance” that would help newer employees while hurting long-time public servants.

Christie has coupled his pension reforms with an overhaul of state employees’ health care benefits. He has twice required public workers to contribute more toward their health insurance premiums, noting the changes would bring the state more in line with the federal system. 

As governor, Christie made a name for himself in part by taking on public sector unions and fighting to reduce the benefits for state employees. If elected president, he would have the opportunity to bring those cuts to the federal level.