WASHINGTON (PAI) – Government workers’ union leaders and AFL-CIO president Richard Trumka slammed the federal budget deal top lawmakers reached on Dec. 10, saying it unfairly hits the nation’s two million federal workers – who have borne the brunt of prior budget cuts.
And Trumka hit Congress for refusing to ask those who have gained the most from the slow economic recovery – the rich and Wall Streeters who caused the crash – to pay their fair share of the recovery’s costs, including extending jobless benefits.
But lawmakers appeared to pay little heed to the federal workers, 85 percent of whom live and work outside metropolitan Washington, or the union leaders. In haste to get out of town for the holidays, the GOP-run House planned to approve the deal on Dec. 12, with the Democratic-run Senate aiming to agree to it the following week.
Many pro-worker lawmakers endorsed the agreement, though they criticized key sections – such as requiring federal workers to pay more for their pensions, and refusal to extend federal jobless benefits beyond their Dec. 28 end.
The 2-year bipartisan agreement sets non-entitlement spending at $1.012 trillion for the year that began Oct. 1, and $1.014 trillion for the year that begins next Oct. 1. It ends “sequestration,” the GOP-mandated budget cuts that slashed billions from both the military and domestic agencies.
Instead, it saves $63 billion by, among other methods, requiring future federal workers to contribute $6 billion more from their paychecks over the next two years to fund their pensions, but with no increase in pension payouts. Civilian defense workers would contribute $6 billion through lower cost-of-living increases for those aged 40-62.
And firms with traditional pension plans would have to pay $8 billion more in fees to the federal Pension Benefits Guaranty Corp., the agency that steps in, with lower pension payouts, when a firm goes bust and gives up its pension plan. Airline passengers would pay $12.6 billion more in ticket taxes, too.
Comments included Trumka praising Senate negotiator Patty Murray, D-Wash., for successfully “resisting Republican demands to cut Social Security, Medicaid, and Medicare benefits and food assistance for people with low incomes.” But he said the deal “does nothing for the millions of people who remain without work and asks nothing from the people who caused our economic crisis and continue to benefit from economic inequality.” Trumka too slammed the federal pension provisions, and predicted the higher PBGC fees would let firms “justify new rounds of pension dumping.”
“Meanwhile, at the insistence of” Rep. Paul Ryan, R-Wis., the House budget negotiator, “the agreement does not demand any sacrifice from the wealthy or from Wall Street,” Trumka said. “It is hard to justify demanding further sacrifice from federal employees and private sector workers while continuing costly tax preferences for Wall Street investment managers and companies that send jobs overseas.”
The pension cuts drew the ire of the government worker union leaders, who reiterated their members have already suffered a 3-year pay freeze, lost 16 days of pay due to the GOP-engineered federal shutdown in October, and were ordered just last year to send more money in to pay for pensions.
“AFGE cannot support any budget deal that asks for more from federal employees. AFGE represents more than just the 670,000 federal and D.C. employees on the rolls today, but every other federal worker who will one day take the oath and be forced to live with this needless pension cut,” union President J. David Cox, a retiree from the Veterans Affairs Department, said.
“AFGE rejects the notion there should be a trade-off between funding the programs to which federal employees have devoted their lives, and their own livelihoods. Though the $6 billion in increased retirement contributions for new employees is less severe than the administration’s $20 billion proposal, it is still unacceptable.”
Cox explained newly hired federal workers pay one of every 11 dollars from their paychecks to fund their pensions and contribute to Social Security, combined. A 1.3 percent hike in the pension contribution, which the budget deal mandates, would push that figure to 10.6 percent of newly hired workers’ paychecks. “The result will be a…substantial lowering of their standard of living,” he said.
The National Treasury Employees Union “strongly condemned” President Obama’s $20 billion in proposed federal worker pension cuts, but took a dim view of the budget deal, too.
“While we were able to prevent any cuts to current employees…we continue to believe there should be zero cuts to federal pay and benefits in this deal and that federal employees are being asked to contribute a disproportionate share to deficit reduction,” NTEU added. It put that “contribution,” from the pay freeze and prior pension contributions, at $114 billion, not counting furloughs, the 16-day shutdown or sequestration impacts.
The Fire Fighters, whose union includes workers who tackle wildfires on federal lands, reiterated those points and added that “these contributions” by federal workers to deficit cutting “will not be called upon to pay” an increased pension benefit. “They’ll be diverted to other uses.
“We support congressional efforts to find additional revenue” to help get rid of the sequester and its impacts, IAFF added. “But we strongly oppose asking workers to once again foot the bill.” Instead, Congress should eliminate “tax breaks for millionaires and billionaires,” the union added.
“Federal employees did not create the deficit. They have done their part to alleviate it. Asking them to do more simply because they are an easy target is wrong.”
In a letter to budget bargainers Sen. Patty Murray, D-Wash., and Ryan, a coalition of unions and other groups-including the Laborers, AFGE, AFSCME, the Fire Fighters, the Letter Carriers, the Mail Handlers/Laborers, the Machinists, the Postal Workers, the Air Traffic Controllers, NTEU, the Government Employees and the Rural Letter Carriers-said pension cuts are “simply unacceptable.”
“The proposal would effectively cut the take-home pay of federal employees who are already struggling financially. Some refer to these changes as ‘fees’ on the federal workforce. Make no mistake about it – this is a tax on federal employees pure and simple; the only constituency who would be taxed under your proposed budget,” the coalition’s letter explained.
“No other group of Americans contributed to deficit reduction the way federal employees have. It is time for Congress to do its job and find other ways to reduce the deficit than continually taking from our members whose only sin has been to dedicate their lives to federal service.”
Photo: The new compromise budget is seen by unions as a scheme by Reps. Paul Ryan and Boehner to raid the pensions earned by workers. J. Scott Applewhite/AP