Conservatives: End Annual Across-the-Board Pay Raises for Feds and Cut Benefits

A group of more than 150 House conservatives on Wednesday unveiled their plan to balance the federal budget in seven years, with many of their ideas falling on the backs of federal workers, either via cuts to pay and benefits or the weakening of civil service and union protections.

The Republican Study Committee, led by Rep. Kevin Hern, R-Okla., said this year’s budget plan, entitled “Protecting America’s Economic Security,” features a laundry list of proposals to reduce government spending on federal employees and retirees.

The document argues that the private sector is more “efficient” in how it compensates employees, and argues that, when including non-salary benefits, federal workers make 17% more on average than their counterparts outside of government. Democrats and employee groups argue that those benefits are integral to attracting qualified employees to public service, as per Bureau of Labor Statistics data, federal workers make 24.09% less than private sector employees on average.

On the pay front, the study committee advocates for the end of automatic across-the-board raises in favor of targeted “merit-based” pay increases, as well as reducing federal workers’ access to paid leave to more closely “match” private employers. Taken together, these two changes would cut spending by $132 billion over the next decade, the group said. And the plan alludes to an even bigger shakeup to the federal pay system: getting rid of the General Schedule.

“Congress should reform the federal pay scale to attract and reward high skilled, highly productive federal workers, and stop overpaying less qualified employees,” the plan states.

When it comes to retirement benefits, the group recycled an array of proposals first floated by former President Trump in each of his budget plans, although none of the ideas survived the congressional appropriations process. Under the committee’s proposal, federal retirees’ annuity benefits would be calculated using the average of the highest five years of an employee’s salary, instead of the current high three, increasing the amount federal workers must contribute from their paychecks toward the Federal Employee Retirement System, and “reducing or eliminating” federal retirees’ annual cost of living adjustment through FERS and the Civil Service Retirement System.

The plan also calls for the elimination of the FERS supplement for federal employees who retire before Social Security kicks in at age 62, and would base the returns of the Thrift Savings Plan’s government securities (G) fund on the yield of the short term Treasury bill. TSP officials have said that such a move would make the portfolio “virtually worthless.”

The plan also includes some new ideas for cutting feds’ retirement benefits: it proposes eliminating FERS for new hires, allowing them to participate only in the TSP, a move proponents say would save $235 billion over 10 years. And a 2012 measure requiring federal employees to contribute more toward their FERS annuity each paycheck, originally targeted only at those hired after its enactment, would apply to all federal workers.

The Federal Employees Health Benefits Program would not emerge unscathed under the study committee’s proposal, either. The group calls for the program shift from agencies contributing a percentage of a federal worker’s health care premiums to a “premium support system,” where the government would pay a flat sum toward premiums, and federal workers would be responsible for whatever is left over. In theory, federal workers would then choose less expensive plans, saving agencies money.

“This option would encourage employees to purchase plans with the appropriate amount of coverage that fits their needs,” the document states. “The government should also reduce its contributions to federal workers’ premiums to align with the private sector more closely.”

The budget plan also would end the practice of FEHBP continuing to offer coverage to federal retirees, although that change would only affect new hires.

The conservatives also took aim at the federal workforce’s civil service and union protections. The plan endorses legislation that would reduce the firing process to 30 days and limit federal employees’ ability to appeal adverse personnel actions only to disciplinary actions, prohibiting appeals based on compensation decisions.

And they reiterated their support for efforts to crack down on union activity in the federal workplace, calling for a ban on official time and repealing President Biden’s Protecting the Federal Workforce executive order, which repealed a trio of Trump-era executive orders aimed at cracking down on unions, expanded the scope of agency bargaining obligations to include permissive subjects, and rescinded Schedule F, an initiative that would have reclassified tens of thousands of federal workers in “policy-related” positions into a new job category and effectively making them at-will employees.

Federal employee unions were quick to denounce the study committee’s fiscal roadmap as a “slap in the face” to the federal workforce.

“This budget proposal is an unserious document packed with partisan policy suggestions that will delight those on the extreme fringes of the right wing and cripple the effectiveness of the federal government by gutting civil service protections, union rights, and federal employee pay and benefits,” said Everett Kelley, national president of the American Federation of Government Employees. “Each aspect of this proposal will make it more difficult for the federal government to recruit and retain top talent, putting the United States at a disadvantage versus global competitors like China.”

National Treasury Employee Union National President Tony Reardon called the plan “an unconscionable broadside.”

“The authors of this proposal clearly have no respect for federal employees’ commitment to public service or the value they deliver to the American people,” he said. “Cutting—and in some cases eliminating—their pay, their benefits and their rights shows how little regard this extreme group of Republican House members have for the civil servants who protect our country, safeguard the public health and promote economic growth . . . This plan is not about governance; it is about demonizing and hurting hundreds of thousands of Americans in every city and state who took an oath to the Constitution and have chosen a career serving their fellow citizens.”