What you won't hear about this new deal:
Public workers will get eviscerated, to achieve "deficit reduction"
David Dayen
2013 has not been a pleasant year if you work for the federal
government. You’ve been subject to pay freezes, furloughs and shutdowns.
One of you got
yelled at
by a Tea Party Republican at the World War II memorial. And if Congress
passes the budget deal announced Tuesday night by Rep. Paul Ryan and
Sen. Patty Murray –
a big if
– you will get a final Christmas present: You’ll have to pay more into
your pension, an effective wage cut that just adds to the $114 billion,
with a “B,” federal employees have already given back to the government
in the name of deficit reduction.
The
deal
between House and Senate negotiators Ryan and Murray would reverse part
of sequestration for 2014 and 2015, itself a major source of pain for
federal workers. But negotiators want to pay for that relief in future
years, with the overall package cutting the deficit by an additional $23
billion. And one of the major “pay-fors” is an increase in federal
employee pension contributions. President Obama’s 2014 budget included
such a proposal, which would have raised the employee contribution in
three stages, from 0.8 percent of salary to 2 percent. Congress had
already made this shift for new hires; the Obama proposal would affect
all workers hired before 2012.
That proposed increased
contribution translated to a 1.2 percent pay cut, and a total of around
$20 billion in givebacks over 10 years. Negotiators were pressured by
the
powerful Maryland Democratic delegation,
including Minority Leader Steny Hoyer, House Budget Committee ranking
member Chris Van Hollen and Senate Appropriations Committee chairwoman
Barbara Mikulski, into softening the blow on federal employees, many of
whom live in their districts. According to Sen. Murray, the increase in
contributions now equals about $6 billion over 10 years. But negotiators
traded some of the cuts to federal employee pensions with
different cuts to military pensions, also totaling $6 billion. So whatever the occupation, people who work for the government will bear the brunt of the pain.
A
small pay cut doesn’t sound like much. But you have to add that to the
pile of hits federal workers have taken over the past several years.
Government pay has been frozen since January 2010. The only way you’ve
gotten a raise over the last four years if you work for the government
is if you received a promotion or a similar advance. The Congressional
Budget Office
estimates
that this has reduced the purchasing power of a government salary by
over 7 percent since 2010. The deal to avoid the government shutdown in
October finally broke this fever with a
1 percent pay raise starting in January. This budget deal would wipe much of that out.
Pay
freezes are just the beginning. In February, hundreds of thousands of
federal workers were forced into unpaid furloughs in accordance with
sequestration’s across-the-board budget cuts. In
virtually every federal agency, workers had to take as many as
15 unpaid days off
during the last fiscal year. Then, when the government shutdown
occurred, workers were again sent home without knowing if they would
ever get paid for the missed time. The lack of cash flow stressed
workers and made it difficult to pay bills on time. Fortunately,
Congress did
provide back pay
for the 6.6 million work days missed during the shutdown. However, that
comes out of agency budgets, and workers have to still complete their
tasks without the ability to hire additional personnel to make up the
time.
The Federal Workers Alliance, a coalition of unions representing federal employees, estimated in a
message to the budget negotiators that between the pay freeze and furloughs, federal employees have sacrificed $114
billion
in pay cuts over the past three years, an average of over $50,000 per
employee. Yet somehow, budget negotiators are going to the well again.
It’s notable that this attack targets public pensions, which have been
under assault
all over the country. Last week, a federal bankruptcy judge allowed
Detroit to enter bankruptcy and impair pensions for city workers and
retirees, and Illinois passed a sweeping law that would cut pensions
significantly. Both of those states have constitutional protections
preventing cuts to pensions, but no matter. Now, under the proposed
budget deal, federal pensions would be subject to higher employee
contributions. The Federal Workers Alliance notes that the average
annual pension benefit for federal employees is just $12,800 per year.
The proposed increased costs amount to close to hundreds of dollars a
year in lost take-home pay without any increase to that meager benefit.
Moreover, they represent a weakening of public pensions generally, at a
time when the loss of pensions in the private sector, in favor of shaky
401(k)-style plans, has contributed to a
retirement crisis.
The threat to a dignified end of life is now coming to government
workers, who explicitly forgo wages in exchange for the promise of a
modest retirement benefit.
Sequestration in 2014 was scheduled to
squeeze agency budgets even more.
The budget cuts are larger, particularly on the military side. Cuts
from 2013 sequestration have not been fully implemented, and agencies
were able to shuffle around money to lessen the pain in ways that would
not be available to them next year. All this means that a full
sequestration in 2014 would have, in all likelihood, lead to layoffs.
Now, just as Congress closes in on limited relief from sequestration,
workers are told they’ll have to pay for some of that relief themselves.
You
could probably find some federal workers to blame for the economic
predicament in which we find ourselves, but those would be members of
Congress. By contrast, federal employees, who inspect our food, work in
veterans hospitals, investigate crimes at the FBI and generally ensure
the smooth functioning of essential government services, have been
blasted over and over again, as if their pay and benefits packages are a
cookie jar to be repeatedly raided by Congress. This has led to
terrible morale for federal workers, and a difficulty in
finding and recruiting new talent.
Federal retirements have risen as workers cash out rather than subject
themselves to more stings. If you wanted to devalue the role of
government from the inside out, what we’ve done to federal employees
over the past few years would be the perfect blueprint.
President Obama just gave a
speech
highlighting inequality as “the defining challenge of our time.” If he
signs a budget deal that knocks federal employees once again, he will
have contributed to the continued hollowing out of the middle class,
which after all is one of the biggest causes of inequality. If you
cannot secure the promise of a decent living and an honest retirement
even by working for the government, then there’s little hope that we can
arrest this growing split between the ultra-rich and everybody else.
No comments:
Post a Comment