Congress Yet To Deal With Budget Plan That Affects Federal Retirement Benefits

Congress Yet To Deal With Budget Plan That Affects Federal Retirement Benefits



The House’s recess has just started and will continue until after Labor Day – the Senate isn’t that far behind. Moreover, as of now, there has been no floor vote taken in regards to a budget plan that would cut federal retirement benefits, as suggested by the Trump Administration.


As it currently stands, the budget resolution is just a planning document.  It needs the House Oversight and Government Reform Committee to come up with $32 billion in shortfall cutbacks during the next 10 years in programs it has control over.


The way the goal is to be attained is raising a number of contributions employees make to their retirement benefits and getting rid of the Special Retirement Supplement that people in FERS get if they retire before 62 years old and cannot draw their Social Security benefits.


The resolution didn’t touch the other multiple proposals noted in the White House budget plan, which bases the future retirees’ benefits on their highest five-year salaries, not the present three highest. It also didn’t touch on decreasing the COLA for CSRS retirees or getting rid of COLA for civil service employees on FERS benefits.


The Oversight committee can deal with these matters since they have the full discretion of how to attain the target.


Of course, when this process starts is anyone’s guess, as House Republicans have been unable to hold a floor vote because of other disagreements. A group of 10 House Republicans asked the committee to reject all proposals in similar fashion to the letter sent to the House leadership. Roughly 100 House Democrats and 18 Senate Democrats sent letters similar to their leaders.


In the House resolution, there would be a partial hiring freeze set in place with the idea to reduce the workforce by 10% for an undetermined amount of time.


In the meantime, the House Republican Study Committee came up with a budget plan on their own, which stated their positions, not an actual measure that could be voted upon. Some of their recommendations included increasing the retirement contributions and basing the COLA on another inflation index (one that would lead to minute increases).


The proposal also endorses a shift in how the government contributes to the FEHB premiums contribution. Right now, the contribution is in percentages, but they are requesting it be made in dollars. According to an analysis of that plan, enrollees would end up paying more. People in the lowest-cost plan may benefit from this switch.

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