House Passes Republican Bill Freezing Federal Pay, Slashing Retirement; Obama Promises Veto

(National Federation of Federal Employees)

Tuesday the House passed a Republican bill, H.R. 3630, which included a one-year pay freeze extension and major cuts to federal retirement benefits. The bill passed by mostly party line vote of 234-193. Shortly before its passage, President Obama issued a Statement of Administration Policy pledging to veto the bill if it ever made it to his desk.

“The Administration strongly opposes H.R. 3630,” said Obama in his policy statement. “H.R. 3630 seeks to put the burden of paying for the bill on working families, while giving a free pass to the wealthiest and to big corporations by protecting their loopholes and subsidies.”

Indeed, middle class federal employees would pay a heavy price under the Republican measure. The bill would extend the current pay freeze to three years, rendering pay levels for federal workers flat through 2013. If passed into the law the legislation would also triple the amount federal workers pay toward their pensions, raising the contribution rate from 0.8% to 2.3% over three years beginning in 2013.

The bill also dramatically impacts retirement annuity calculations for new hires with less than five years of experience. For those individuals, the “annuity multiplier” calculation figure, which is set at 1.0% for most employees today, will be reduced to 0.7%. They will also be calculated using the average from their highest five years of salary rather than the current “high three” figure. The result of these two changes alone will diminish the value of federal pensions by 30% over a career.

“It’s clear that Congressional Republicans are more interested in scoring political points by targeting federal workers than making a good faith effort at extending needed tax relief to middle class Americans,” said NFFE National President William R. Dougan. “It’s a sad state of business when shallow politics trumps sound policy, but NFFE and other federal unions are as ready as we have ever been to stand together and fight back.”

Democrats in the Senate are expected to come up with their own proposal later this week, and then the two parties will have to work out their differences to arrive at a final package. This leaves federal workers little time to contact their members of Congress, so NFFE is urging every federal worker to call their elected officials as soon as possible (as a constituent, on your own time, using your own phone). Call Congress today and tell them to say no to pay freeze extensions and retirement cuts!