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Congress / CONGRESS

Van Hollen: Federal Pay and Benefits a GOP Target

House Budget Committee ranking member Chris Van Hollen, D-Md., at the Democratic National Convention in Charlotte, N.C.(Chet Susslin)

December 13, 2012

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A top House Democrat said on Wednesday that he did not know of any specific proposals targeting federal pay and benefits being touted by the Republican leadership to avoid the fiscal cliff, but that does not mean federal employee compensation is off the table.

“I have not gotten word that the speaker has advanced specific federal proposals [reducing pay and benefits],” said Rep. Chris Van Hollen, D-Md., whose district is home to many federal employees. Van Hollen was quick to point out, however, that Speaker John Boehner’s first counteroffer to the White House’s deficit-reduction framework broadly mentioned past GOP proposals that reduce federal employees’ pay and benefits as a way to cut spending.

Those proposals, included in a budget resolution the House passed in the spring, would extend the federal pay freeze, shrink the government workforce by 10 percent through attrition, and require workers to contribute more to their pensions. The provisions would result in about $368 billion in cuts to the federal workforce during the next decade, according to Republican estimates.


The second GOP counteroffer from the Ohio Republican reportedly is similar to the first one.

Based on that blueprint, and previous Republican efforts, Van Hollen said it was safe to assume federal pay and benefits are still a GOP target, saying that “virtually every proposal that has come before Congress over the last two years has taken a meat ax to federal employees.”

Van Hollen spoke during a conference call with reporters and representatives from the Federal-Postal Coalition, a group made up of more than two dozen federal union, management, and retiree organizations. The House member was a member of the 2011 joint select congressional panel on deficit reduction, also known as the super committee, and is the ranking member of the House Budget Committee.

The Maryland Democrat said he and other lawmakers continue to emphasize to the Obama administration that federal employees already have made sufficient sacrifices in the name of deficit reduction. The Federal-Postal Coalition estimated that federal workers have contributed $103 billion toward deficit reduction, including the two-year pay freeze that has been extended through the end of March and the requirement that new federal workers hired after Dec. 31, 2012, contribute more to their pensions than current employees.

“[That’s] a very large amount to come from such a small group of middle-class workers,” said Maureen Gilman, legislative and political director of the National Treasury Employees Union.

Van Hollen also mentioned the need for a return to pay parity between civilian and military employees, as one of the “important points we are communicating to the administration.”

Time is running out for political leaders to cut a deal to avoid the fiscal cliff -- a perfect storm of expiring tax cuts, another round of debt-ceiling negotiations, and sequestration all scheduled to collide at the end of this year and the beginning of 2013. “It’s increasingly clear there will not be an agreement before Christmas,” Van Hollen said, which leaves Congress the days between Christmas and the New Year to hammer out a deal. He said he was confident that lawmakers and the administration can reach a deal before the end of the year, but there’s still a way to go.

One proposal under serious consideration in the fiscal-cliff talks could affect civilian and military retirees. The proposal would switch the current formula for calculating cost-of-living adjustments for federal retirees and Social Security beneficiaries to what’s known as the “chained CPI.” The chained Consumer Price Index is viewed as a more accurate measure of how people substitute one item for another in the face of a price increase. The result would be lower COLAs over time.

Republicans are floating the chained-CPI proposal as part of their fiscal cliff deal; during the last few years, Obama reportedly has expressed support for switching to a chained CPI, at least in private deficit-reduction talks. Groups, including the National Active and Retired Federal Employees Association, oppose moving to a chained CPI.

During Wednesday’s conference call, Van Hollen also sympathized with the uncertainty that federal departments and agencies are experiencing with the potential spending cuts. He said he knows agencies are in the process of planning for a possible sequester, and that deciding where to make reductions puts them in a difficult position. “There is not one cookie-cutter way that agencies can do this; they have to plan based on their distinctive characters,” he said.

The Maryland Democrat said he believes that agencies are doing everything they can to avoid furloughing or laying off employees. “My understanding from most federal agencies is that you would not anticipate any immediate furlough and layoffs; that they would look for other ways to manage the situation,” he said. Still, Van Hollen acknowledged that officials might have to take those measures toward the end of the fiscal year to comply with the spending cuts.

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