https://www.fedsmith.com/2018/02/12/substantial-cuts-federal-employee-benefits-proposed-fy-2019-

budget/

Substantial Cuts to Federal Employee Benefits Proposed in FY

2019 Budget

Ian Smith February 12, 2018 Pay & Benefits, Retirement Comments (127)

The White House released its fiscal year 2019 budget proposal today. As expected, it contains specific

proposals that would impact federal employees. One of the accompanying documents was entitled

“Major Savings and Reforms” that outlined specific changes to federal employee benefits.

Reductions to Federal Retirement Benefits

Perhaps the most significant changes would be to federal retirement benefits. Many of these proposals

are not new and have been floated in various budget proposals before.

Eliminate COLAs

Cost of living adjustments would be eliminated for retirees under the Federal Employees Retirement

System (FERS) and reduce them by 0.5% for retired federal employees under the Civil Service

Retirement System (CSRS).

The budget proposal notes that this would bring compensation for federal employees more in line with

the private sector. It adds, “FERS and CSRS COLAs for annuitants are currently determined based on

statutory formulas tied to the Consumer Price Index. However, FERS annuitants are somewhat protected

from economic effects, because their retirement packages include Social Security benefits and TSP, in

addition to the FERS annuity…”

Other Proposed Changes

• The FERS Special Retirement Supplement would be eliminated for those employees who retire

before Social Security eligibility age.

• Annuities would be calculated based on a high-5 instead of a high-3 as is done currently.

• The G Fund interest rate would be reduced to base the yield on a short-term T-bill rate instead of

the current rate (an average of medium and long term Treasury bond rates).

Justification

The budget proposal says this about these proposed changes:

The employee compensation landscape continues to evolve. Private sector employers provide a smaller

share of compensation in the form of retirement benefits than does the Federal Government. Recent

decades have seen a dramatic shift by private employers away from defined benefit retirement programs.

The Federal Government, in contrast, provides a much greater share of its employees’ compensation in

the form of retirement benefits—including pension benefits and post-retirement health care benefits. The

provisions of this proposal would bring Federal retirement benefits more in line with the private sector,

while reducing their long-term costs.

The budget proposal also adds some additional detail justifying the proposed changes.

For eliminating the FERS Special Retirement Supplement, it notes that this is a unique benefit provided

to federal workers. “When private sector employees retire before Social Security eligibility age, no such

supplement is provided. This proposal would eliminate this “extra” benefit, which is not typically

provided in private sector annuity plans,” states the proposal.

The logic behind changing the G Fund interest rate is much the same. The budget proposal states that is

one only available to federal employees, and the interest rate is higher because it gets “a medium-term

rate of return on what is essentially a short-term security. Basing the yield on a short-term T-bill rate

instead of the current rate (an average of medium and long term Treasury bond rates) would reduce both

the projected rate of return to investors and the cost of the fund to the Treasury.”

Raise Employee Portion of FERS Retirement Contributions

Another proposal from the FY 2019 budget blueprint would increase the employee share of

contributions to federal employees under FERS. Specifically, it would raise the employee contributions

to 50% of cost, but phase it in over several years to mitigate the impact. For certain categories of federal

employees, such as law enforcement and firefighting, employee contributions would increase, but the

government would continue to pay a higher share of the normal cost.

Justification

As to the reasoning behind this change, the budget report cites a 2017 Congressional Budget Office

report which notes that federal employees are, on average, paid 17% more than their private sector

counterparts when factoring in both pay and benefits. The bulk of this is due to the retirement benefits

offered to the federal workforce, so this would bring this benefit more in line with that of the private

sector.

“As the CBO study shows, in comparison to the private sector, the Federal Government continues to

offer a very generous package of retirement benefits, even when controlling for certain characteristics of

workers. At large private sector firms, only approximately 35 percent of workers had access to a

combination of defined benefit and defined contribution programs,” reads the report.

An added benefit according to the budget blueprint is that the change would “generally equalize” the

percentage of salary going towards retirement for both new and existing FERS employees. “At present,

newer cohorts of employees pay a higher percentage than do those with greater seniority,” notes the

report.

Changing the Government’s FEHB Contribution Rates

A final proposal of direct relevance to federal workers would change the government’s contribution rate

to the Federal Employees Health Benefits (FEHB) program by basing it on a plan’s score from the

FEHB Program Plan Performance Assessment.

“Currently all FEHB carriers participate in the assessment, which includes 19 measures of health

outcomes, quality, and efficiency. Under this proposal, the Government contribution would range

between 65-75 percent depending on a plan’s performance. This proposal would encourage enrollment

in high-performing health plans,” says the proposal.

The idea behind this proposal is to reduce health care costs. It states:

The Government contribution to premiums is currently set in statute at 72 percent of the weighted

average of all plan premiums, not to exceed 75 percent of any given plan’s premium. Under the current

structure, enrollees have few incentives to choose less expensive, higher value plans. This proposal

would incentivize enrollees to select high-performing, high-value plans by making them more

affordable. The proposal would also provide carriers with greater incentive to compete on price and

quality, help driving down overall program costs.

Summary

Many of these changes are not new. Some of them, in fact, were included in the Trump administration’s

FY 2018 budget proposal. Some date back even further, such as the proposal to cut G Fund interest

rates.

None of them have been enacted thus far as it would require new legislation from Congress to enact any

of these changes. The budget simply outlines the administration’s priorities and overall philosophy as to

the role of government.

Budget 2019: Major Savings and Reforms by FedSmith Inc. on Scribd

About the Author

Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect

the federal workforce.

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https://www.washingtonpost.com/news/powerpost/wp/2018/02/12/budget-provides-no-raise-targets-retirement-benefits-for-federal-employees/?utm_term=.3a56a7d905c6

PowerPost

Budget provides no raise, targets retirement benefits for federal

employees

By Eric Yoder February 12 Email the author

The Trump administration budget proposal targets federal employee pay and benefits while calling for

an overhaul of what it called an “increasingly incomprehensible and unmanageable civil service

system.”

The spending plan released Monday proposes no federal employee raise for January 2019, in contrast to

the White House’s recommendation last year for an average 1.9 percent increase that took effect last

month.

“Across the board pay increases have long-term fixed costs, yet fail to address existing pay disparities,

or target mission critical recruitment and retention goals. The Administration therefore proposes a pay

freeze for Federal civilian employees for 2019. This Administration believes in pay for performance,”

one of the budget documents says.

It cites as an example the “within-grade” increases that are paid, up to limits, at regular intervals in the

pay systems covering most federal workers. Employees must be performing acceptably to receive them,

but those increases are paid “without regard to whether they are performing at an exceptional level or

merely passable (they are granted 99.7 percent of the time). The Budget proposes to slow the frequency

of these step increases, while increasing performance-based pay for workers in mission-critical areas.”

However, the budget does not go into detail on performance-based pay, nor on restricting employee

appeal rights to address what it calls those who “are simply unable or unwilling to perform at acceptable

levels.”

“The requirements to successfully remove an employee for misconduct or poor performance are

onerous. Employees have a variety of avenues to appeal and challenge actions . . . This is yet another

area where the Federal workforce could benefit from adopting some private sector norms,” it says.

President Trump had signaled that proposals were coming on both pay-for-performance and discipline in

his recent State of the Union speech, when he called on Congress to give agencies “the authority to

reward good workers — and to remove federal employees who undermine the public trust or fail the

American people.” Preliminary budget documents obtained and released by Sen. Claire McCaskill (D-

Mo.) had indicated that no raise for 2019 would be proposed.

The budget notes that civil service law was last overhauled 40 years ago and cites independent studies

that have decried it as outdated. “It is time to reconsider where that law has succeeded and where it has

failed” in areas including what it called an overly “generous benefits package” compared with the

private sector’s, the government’s hiring practices and employee union rights.

The plan repeats what it calls “compensation reforms” from last year’s proposal, some of which

progressed in the House before falling by the wayside. These include:

• Requiring employees under the Federal Employees Retirement System — more than nine-tenths

of the workforce — to contribute more toward their retirement benefits. This would be phased in

as one percentage point increases, requiring most to eventually pay an additional 6 percent of

salary into the system.

• Eliminating cost-of-living adjustments on the civil service annuities of those retired under FERS

while reducing the adjustment by a half-percentage point for those retired under the older Civil

Service Retirement System.

• For those retiring in 2019 and later, annuities would be based on the highest five consecutive

salary years rather than the current three, and those retiring under FERS below age 62 would no

longer receive a supplement that is paid until that age when they can collect Social Security.

Federal employee pay raises have been determined in the annual congressional budget process in recent

years. Pay rates were frozen in 2011-2013 and raises of 1 to 2 percent have been paid each year since;

by not acting, Congress has allowed raises recommended by the White House to take effect by default.

Revamping the pay system to put a greater emphasis on performance would require a major legislative

effort, however, as would changing retirement benefits and civil service protections.

“Weakening our civil service system and attacking the pay and benefits of federal workers will backfire

and leave our country unable to tackle the complex issues we are facing,” National Treasury Employees

Union President Tony Reardon said in a statement. “Those include threats to public health and security

at the ports of entry, a clean environment, cutting-edge research and vital financial protections for

American consumers.”

“Federal workers shouldn’t be hired or fired on the whims of political appointees whose allegiance is to

their political party, not the country’s best interests. By stripping employees of their due process rights

and firing those who reject his politics, President Trump is opening the door for rampant corruption,

discrimination, and worker intimidation,” said American Federation of Government Employees

president J. David Cox Sr.

In addition, for the first time the White House proposed reducing the rate of interest the government

pays in a government securities fund, called the G Fund, in the Thrift Savings Plan, a 401(k)-style

program for federal employees and military personnel. That idea did feature in prior budget plans

prepared by House Republicans that ultimately were not enacted.

“We oppose this proposal,” said Kim Weaver, a spokeswoman for the TSP, which does not report to the

White House. “A change from the existing statutory formula for the G Fund (currently 2.75 percent

annualized) to the 3-month Treasury rate or the 4-week interest rate would drop the current G Fund

annualized to 1.46 or 1.43 percent, respectively. Such a change would make the G Fund inadequate and

ineffective from an investment standpoint for TSP participants who are saving for retirement,” she said

in an email.

Two-thirds of TSP investors have at least some of their money in the G Fund, and of those, four-tenths

invest only in that fund, she said.

The budget plan also recommends a study of whether to give employees newly hired after a future date a

retirement plan with no annuity component but rather only an enhanced savings program, with current

employees having the option to switch into it. That idea, too, has circulated on Capitol Hill in recent

years but was not in last year’s White House proposal.

The proposal also would revise the way premium costs are shared between the government and enrollees

in the Federal Employees Health Benefits Program. Rather than a fixed 72 percent of a weighted

average across the entire program, the government share would vary between 65 and 75 percent of a

plan’s total premium, depending on the plan’s quality ratings.

That idea is a twist on long-running proposals to shift to a “voucher” system in which the government

share would be set at a fixed dollar amount and increased annually by less than the overall rise in costs

in the program.

Another new proposal, although not presented in detail, is to combine the separate sick leave and

vacation leave benefits for federal workers into one while creating a short-term disability insurance

program.

In addition, the budget repeats a proposal to create a nationwide program of six weeks of paid leave for

parents of newborn or newly adopted children; last year’s proposal would have applied to federal

employees along with private-sector workers.

It also would create a $50 million fund to test “innovative approaches to meeting critical recruitment,

retention and reskilling needs across the Government.”

Eric Yoder specializes in poking around under the government's hood to see what makes it run, or not.

Follow @EricYoderWP

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http://www.govexec.com/pay-benefits/2018/02/trump-formalizes-2019-pay-freeze-proposal/145915/?oref=govexec_breaking_alert

Trump Formalizes 2019 Pay Freeze Proposal, Revives Benefits

Cuts

• By Erich Wagner

• 1:37 PM ET

• 1 Comment

The Trump administration announced Monday that it will seek a pay freeze for all civilian employees in

2019, confirming a plan long expected from the White House.

The administration's fiscal 2019 budget proposal released Monday by the Office of Management and

Budget also includes a number of provisions that would cut federal workers’ retirement and other

benefits.

The budget describes the pay freeze plan as the first step in moving the civil service to a pay for

performance system, pairing the freeze with a $1 billion interagency fund to reward high performers.

“This [fund] will replace the across-the-board pay raise that provides federal employees with increases

irrespective of performance with targeted pay incentives to reward and retain high performers and those

with the most essential skills,” officials wrote in a fact sheet accompanying the budget.

In addition to freezing wages in 2019, Trump’s fiscal 2019 budget reintroduces a number of cuts to

federal employees’ benefits and retirement programs that were proposed last year but went

unimplemented by Congress.

The budget would require federal workers to contribute 1 percent more toward the Federal Employees

Retirement System defined benefit annuity each year for six years, and it eliminates the FERS

supplement for retirees under the age of 62, which is when Social Security kicks in.

The plan would reduce cost of living adjustments for employees and existing retirees in the Civil Service

Retirement System by 0.5 percent, and it would eliminate COLAs for FERS employees and retirees

altogether. And it would change the formula that determines future federal retirees’ defined benefit

annuities to be based on the highest five years of salary, instead of the current “high three.”

The budget proposal also could have a significant impact on the Thrift Savings Plan, the federal

government’s 401(k)-style retirement program. Under the plan, the G Fund, which is made up of

government securities and currently has a statutorily mandated annual interest rate of 2.25 percent,

would be based on the yield of the three-month U.S. Treasury bill, which is 1.03 percent per year. TSP

officials decried that idea last fall, saying it would make the portfolio “virtually worthless.”

Rethinking Retirement

The White House indicated that it plans to propose a seismic shift in the federal retirement system in the

future that could remove defined benefit pensions altogether.

“The TSP is a particularly attractive benefit to young, mobile workers not intended to make a career of

federal service,” officials wrote. “The budget, therefore, funds a study to explore the potential benefits,

including the recruitment benefit, of creating a defined-contribution only annuity benefit for new federal

workers, and those desiring to transfer out of the existing hybrid system.”

American Federation of Government Employees National Vice President Philip Glover said such a plan

could be disastrous for employees as they approach retirement.

“I’m retired law enforcement from the Bureau of Prisons, and I can tell you in 2001, right after 9/11, I

lost $65,000 in my TSP overnight,” he said. “In 2008, I lost $45,000 almost overnight. That’s a part of

my retirement that I never made up before I actually retired, and that annuity we receive is what makes it

a stable system for someone like me to retire on.”

The proposal also features plans to change other federal employee benefits. It would do away with the

current leave system, which offers different categories of time off for regular leave, sick days and

vacation, in favor of one category of Paid Time Off, which would effectively reduce the amount of leave

workers receive each year.

And the Office of Personnel Management would change how it determines the employer contribution

portion of the Federal Employees Health Benefits Program, shifting away from the current 72 percent of

the weighted average of all plan premiums with a 75 percent cap.

“Under this proposal, the government contribution would range between 65-75 percent depending on a

plan’s performance,” officials wrote. “This proposal would encourage enrollment in high-performing

health plans.”

According to the budget, this change to FEHB premium contributions would save more than $2.7 billion

over the next decade.

J. David Cox, national president of AFGE, told reporters Monday that Trump’s budget is a significant

threat to federal employees’ livelihood, particularly following years of austerity during the Great

Recession.

“Federal workers already make 5 percent less in inflation-adjusted terms than they did at the beginning

of the decade,” Cox said. “If we don’t stop the pay freeze for 2019, they will have given up $246 billion

in wages and benefits since 2011. No other group has lost more to deficit reduction than the federal

workforce.”

In a statement, National Treasury Employees Union President Tony Reardon described the budget as a

“full-scale assault” on the federal civil service.

“This should alarm every member of Congress and all Americans,” he said. “Weakening our civil

service system and attacking the pay and benefits of federal workers will backfire and leave our country

unable to tackle the complex issues we are facing.”

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https://federalnewsradio.com/your-money/2018/02/trump-proposes-pay-freeze-new-and-familiar-

retirement-cuts-in-2019-budget/

Trump proposes pay freeze, new and familiar retirement cuts in

2019 budget

By Nicole Ogrysko @nogryskoWFED

February 12, 2018 12:54 pm

The White House is proposing a pay freeze for federal civilian employees in 2019, among other

significant changes to the way it rewards top performers, hands out retirement and health benefits and

administers annual leave.

“Across the board pay increases have long-term fixed costs, yet fail to address existing pay disparities,

or target mission critical recruitment and retention goals,” President Donald Trump’s 2019

budget proposal reads. “The administration therefore proposes a pay freeze for federal civilian

employees for 2019.”

Members of the military would receive a 2.6 percent raise, according to the 2019 document.

Senate Homeland Security and Governmental Affairs Committee Ranking Member Claire McCaskill

(D-Mo.) had previously announced in December that she had learned about the possibility of a pay

freeze for civilian workers next year from a preliminary budget document.

Though the president is proposing a pay freeze for civilian employees next year, Congress has multiple

opportunities to suggest and pass law that says otherwise.

An annual across-the-board pay adjustment formula in the Federal Employees Pay Comparability

Act typically sets raises for most federal employees under the General Schedule.

According to that formula, federal employees should receive a 2 percent average base pay raise next

year, and that’s before any additional locality pay adjustments.

The president can choose to differ from this formula, as he just did with his 2019 request. Congress can

ultimately propose and pass any alternative numbers in its annual appropriations or omnibus spending

bills.

The National Active and Retired Federal Employees Association (NARFE) encouraged lawmakers to

consider their own pay proposal for civilian employees.

“This budget singles out federal workers by implementing a pay freeze, which is perplexing given the

president’s continual praise of the strong economy and rising wage growth,” NARFE National President

Richard Thissen said in a statement Monday afternoon. “Denying a modest pay raise during a time of

economic prosperity demonstrates disdain for federal workers and needlessly punishes middle-class

households.”

Several lawmakers this year already introduced and sponsored legislation, the Federal Adjustment of

Incomes Rates (FAIR) Act, which would give federal employees a 3 percent raise in 2019.

But at the very least, Monday’s 2019 request details the Trump administration’s thinking and overall

mindset for managing and compensating the federal workforce, and it will likely drive the policy

discussions in the coming year.

The budget proposal is littered with recommendations on the federal workforce. Some are broad,

sweeping suggestions.

Citing last year’s Congressional Budget Office study on federal compensation, the White House

describes a system that has “long term, fixed” and “significant” costs to employ the federal workforce.

Those costs, according to CBO, are an average of 17 percent higher than what the private sector spends

to compensate its workers.

“This administration believes in pay for performance,” the budget reads. “The existing federal salary

structure rewards longevity over performance. This is most evident in the tenure-based ‘step-increase’

promotions that white collar workers receive on a fixed, periodic schedule without regard to whether

they are performing at an exceptional level or merely passable.”

The Trump administration is proposing to the “slow the frequency” of step increases in the General

Schedule and increase “performance-based pay” for employees in mission-critical occupations.

The General Schedule, and the broader federal personnel system, are relics of an earlier time,

the administration said. The 40-year-old Civil Service Reform Act of 1978 is inadequate for today’s

modern workforce, the White House added.

“The administration also intends to partner with Congress to cull statutory and regulatory rules that have

over time created an increasingly incomprehensible and unmanageable civil service system,” the budget

said. “The administration will propose changes in hiring and dismissal procedures to empower federal

managers with greater flexibility. Agency managers will be encouraged to restore management

prerogatives that have been ceded to federal labor unions and create a new partnership with these entities

that maintains the primacy of each agency’s obligation to efficiently and effectively accomplish its

public mission.”

The president’s request, however, provides few details on how exactly the administration plans

to implement performance-based pay.

Other recommendations are more specific.

For example, the White House proposes the creation of a $50 million central fund that would pay for

innovation ideas to help meet recruitment, retention and reskilling challenges across government.

The President’s Management Council would select a board of “federal officials to manage the fund,

which would review and select from among the agency and cross-agency proposals to pilot innovative

and cost-effective ways to strengthen the workforce, to meet future workforce challenges and to evaluate

the impacts in a manner that best informs future policies,” the budget reads.

Retirement

The president’s 2019 budget also includes several familiar proposals to change the federal retirement

system, many of which the White House included in the previous year‘s request.

Specifically, the president is recommending:

• An increase in employee contributions by 1 percent each year,

• An elimination of the cost-of-living adjustment (COLA) for current and future Federal Employee

Retirement System (FERS) participants and a 0.5 percent cut to the COLA for Civil Service

Retirement System (CSRS) participants of what the typical formula currently allows,

• Basing future retirement benefits on the average of an employee’s highest five years of salary,

and,

• An elimination of the FERS Special Retirement Supplement, payments for employees who retire

before age 62.

Federal employees in some occupations, such as law enforcement officers and firefighters, would in fact

contribute more toward their retirements, but the government would continue to pay a higher share of

the normal cost, the budget said.

The Trump administration would phase in this proposal over several years. It wouldn’t realize savings

from this recommendation until 2020 — roughly $2.3 billion in the first year — but predicts $68.7

billion in savings over the next 10 years.

The Office of Management and Budget detailed how much savings all of these proposals would realize

over the next 10 years:

The White House is also reviving another familiar recommendation: reducing the interest rate for the

Thrift Savings Plan’s G fund.

“G Fund investors currently benefit from receiving a medium-term rate of return on what is essentially a

short-term security,” the 2019 budget proposal said. “Basing the yield on a short-term T-bill rate instead

of the current rate (an average of medium and long term Treasury bond rates) would reduce both the

projected rate of return to investors and the cost of the fund to the Treasury.”

The 2019 budget also funds a study that would explore the potential benefits to moving to a defined

contribution retirement plan for future federal employees or permitting current workers to transfer out of

the existing system.

This study may be one of the only concrete proposals that the White House could accomplish with little

congressional debate or support.

Health care

The Trump administration is also recommending changes to the formula that currently dictates the

government’s contribution rate for participants in the Federal Employees Health Benefits Program

(FEHBP).

The budget suggests that moving forward, the Office of Personnel Management base the government’s

contribution rate on an FEHB plan’s score from the program’s plan performance assessment. OPM rates

all FEHBP carriers on 19 health outcomes, quality and efficiency standards.

A formula set under law determines the share that the government and the enrollee pays toward FEHBP

premiums each year. Government pays about 75 percent of a participant’s premium up to a certain cap.

The cap equals 72 percent of the weighted average of the previous year’s premiums.

Now, the Trump administration wants to alter the formula slightly, so that government would contribute

more toward an employee’s health care depending on how well specific FEHB plan performs under

OPM’s standards.

The Office of Management and Budget projects the government would contribution would range

between 65-to-75 percent.

“Under the current structure, enrollees have few incentives to choose less expensive, higher value

plans,” the budget reads. “This proposal would incentivize enrollees to select high-performing, high-

value plans by making them more affordable. The proposal would also provide carriers with greater

incentive to compete on price and quality, help driving down overall program costs.”

According to the Office of Management and Budget’s projections, the administration wouldn’t see

savings from this proposal until 2021 — about $192 million worth. Slowly, government would realize

roughly $2.8 billion over the next 10 years.

Annual leave

Trump’s budget also seeks to align federal employee sick and annual leave benefits more closely with

the private sector.

The 2019 proposal suggests combining all leave into one “paid time off category. ”

“This would reduce total leave days, while adding a short term disability insurance policy to protect

employees who experience a serious medical situation,” the 2019 request said.

Currently, federal employees receive 10 paid holidays, up to 13 sick days and anywhere from 13-to-26

vacation days, depending on tenure.

Federal employee unions, who had anticipated similar proposals, bashed the administration’s budget

request.

“It appears that the administration is throwing every harmful proposal it could gather at the civil service

system and federal employees,” National Treasury Employees Union President Tony Reardon said in a

statement. “Taken together, these proposals represent a full-scale assault on what has been a bedrock of

our democracy: a civil service made up of skilled professionals who are committed to the taxpayers they

serve, not the politicians.”

Nicole Ogrysko

Nicole Ogrysko is a workforce reporter for FederalNewsRadio.com focusing on federal workforce,

personnel, veterans’ and homeland security issues. Follow @nogryskoWFED/

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https://www.federaltimes.com/management/budget/2018/02/12/trump-budget-will-cost-federal-

employees-in-pay-and-

benefits/?utm_source=Sailthru&utm_medium=email&utm_campaign=Fed%20DB%2002-12-

18&utm_term=Editorial%20-%20Daily%20Brief

Budget

Trump budget will cost federal employees in pay and benefits

By: Jessie Bur 1 day ago

The 2019 presidential budget proposal includes a pay freeze for federal employees for the federal fiscal

year, and documents the administration’s intention to rely more on “pay for performance” structures

than the standard pay increase schedule.

The existing federal salary structure “rewards longevity over performance,” according to budget

documents, which pointed specifically to tenure-based ‘step-increase’ promotions “that white-collar

workers receive on a fixed, periodic schedule without regard to whether they are performing at an

exceptional level or merely passable.”

Employee union groups, however, have labeled the pay-for-performance structure, and the

corresponding removal of poor performers, as an attack on due process for federal employees.

“Federal workers shouldn’t be hired or fired on the whims of political appointees whose allegiance is to

their political party, not the country’s best interests,” said American Federation of Government

Employees national president J. David Cox Sr. “By stripping employees of their due process rights and

firing those who reject his politics, President Trump is opening the door for rampant corruption,

discrimination, and worker intimidation.”

“There’s due process and there’s over process,” said Robert Shea, principal at Grant Thornton and

former associate director at the Office of Management and Budget, pointing to a table included in the

2019 budget proposal that details the complex process employees already have for reporting improper

punishments.

Trump's 2019 budget proposal includes a chart illustrating how federal employees can review major

disciplinary actions. (Source 2019 budget proposal analytical perspectives)

The 2019 budget proposal relies on employee compensation cuts and changes to reduce the deficit by

more than $70 billion by 2028. Much of this comes from reducing the government’s contributions to

retirement and health programs and eliminating some programs such as special retirement supplements

and the Federal Employee Retirement System cost of living adjustments.

The 2019 budget proposal estimates that adjustments to government contributions to the Federal

Employee Health Benefits Program will reduce the deficit by $192 million in 2021 and achieve a total

reduction of nearly $2.8 billion by 2028.

Similarly, the 2019 budget proposal estimates that changes to federal retirement benefits will reduce the

deficit by nearly $2.6 billion in 2019 and add up to more than $68 billion in reductions by 2028.

Changes to federal employee retirement benefits include:

• Increasing employee contributions to retirement by one percent per year until it reaches 50

percent

• Elimination of the special retirement supplement

• Elimination of FERS cost of living adjustments and reduction of civil service cost of living

adjustments by 0.5 percent

Such adjustments are not a new concept.

“The federal government contributions to employee benefits have always been levers in budgeting,” said

Shea. In fact, federal employees have already contributed $200 billion in deficit reduction through cuts

to pay and benefits.

However, federal employee unions have promised to fight the use of such levers in any final budget

decisions.

“It appears that the administration is throwing every harmful proposal it could gather at the civil service

system and federal employees,” said National Treasury Employee Union national president Tony

Reardon. Taken together, these proposals represent a full-scale assault on what has been a bedrock of

our democracy: a civil service made up of skilled professionals who are committed to the taxpayers they

serve, not the politicians.“

The 2019 budget proposal also seeks to combine federal employee leave into one pool, rather than

separate divisions for sick, annual or holidays, a system increasingly popular in the private sector.

However, under the current system, employees can accrue sick leave over years to eventually cover

medical emergency or other major life event.

The time that employees spend at work, on the other hand, would be more restricted under the Trump

administration’s proposal. According to Shea, an appendix of the budget would cut down the time

employees can use for union duties:

“Unless authorized in accordance with law or regulations to use such time for other purposes, an

employee of an agency shall use official time in an honest effort to perform official duties. An employee

not under a leave system, including a Presidential appointee exempted under 5 U.S.C. 6301(2), has an

obligation to expend an honest effort and a reasonable proportion of such employee’s time in the

performance of official duties.”

About

this

Author

About Jessie Bur

Jessie Bur covers federal IT and management.

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https://www.washingtonpost.com/news/powerpost/wp/2018/02/13/is-trump-joking-about-strengthening-the-federal-workforce/?utm_term=.db9de5d2fc73

PowerPost

Is Trump joking about ‘strengthening the federal workforce’?

By Joe Davidson February 13 Email the author

President Trump and his budget director, Mick Mulvaney, must have been in a jocular mood Monday

when they issued their fiscal 2019 budget appendix titled “Strengthening the Federal Workforce.”

It could have just as easily been called “Picking the Pockets of Federal Employees.”

The section begins benignly enough, noting many important services federal workers provide. Improved

hiring procedures, as the administration wants, would strengthen the workforce. But the central thought

in Trump’s plan to improve an “increasingly incomprehensible and unmanageable civil service system”

is firing feds faster.

While his civil service reform ideas are vague, Trump’s plan on federal compensation is clear — cut it.

Compensation cut No. 1: Freeze federal pay in 2019.

In justifying the administration’s call for a pay freeze, the budget document says that “Across the board

pay increases have long-term fixed costs, yet fail to address existing pay disparities, or target mission

critical recruitment and retention goals.”

It’s true that pay raises cost money. Yet freezing pay comes with other costs, including lower morale

and increased hardship for employees. But how does no raise for anybody address pay disparities? And

freezing pay hurts — not helps — recruitment and retention. As other costs rise, frozen pay is a

reduction in the real wages of federal workers.

Compensation cut No. 2: Slow the frequency of “tenure-based ‘step-increase’ promotions that white-

collar workers receive on a fixed, periodic schedule” while increasing pay-for-performance.

Pay-for-performance riles federal union leaders, who recall the troubled system the Defense Department

employed during the George W. Bush administration. It was repealed by Congress, following a flood of

complaints, including charges of racial discrimination in pay in favor of white employees.

Compensation cut No. 3: Have the government pay less and federal employees pay more toward their

retirement.

Trump and Mulvaney would do this in four ways:

• Decrease the government’s share and increase employees’ payments toward the Federal

Employees Retirement System (FERS) that covers most feds by 1 percent per year, effectively

cutting their pay by 6 percent.

• Reduce or eliminate cost-of-living increases for current and future retirees.

• Base annuity calculations on the highest five salary years instead of the “High-3.”

• Eliminate the special supplement for FERS annuitants who retire before their Social Security

eligibility.

Compensation cut No. 4: Reduce federal employee sick days and vacation time.

Trump and Mulvaney say federal sick time and vacation days are “disproportionate to the private

sector.” Under the guise of giving federal employees “maximum flexibility,” the administration wants to

combine “all leave into one paid time off category.” As the budget acknowledges, “This would reduce

total leave days,” which is another way to cut compensation.

Compensation cut No. 5: Reduce the interest rate on the G Fund, a popular investment vehicle in the

401(k)-like Thrift Savings Plan (TSP) for federal employees.

This would render the fund “inadequate and ineffective,” Kim Weaver, a TSP spokeswoman, told my

colleague Eric Yoder.

Ironically, or dastardly, in the same paragraph outlining the plan to gut the defined-contribution G Fund,

the budget document says the administration will study adopting a defined-contribution-only annuity

benefit for new federal workers. Trump and Mulvaney think killing pensions and providing only a

diluted TSP might have a “recruitment benefit.”

Federal employees rallied against the administration’s proposals, as the American Federation of

Government Employees (AFGE) held its legislative conference when the budget plan was released.

AFGE President J. David Cox Sr. accused the administration of “trying to suck the life blood” out of

federal workers.

“To that, we don’t say, ‘No’; we say, ‘Hell no,’ ” he shouted to cheers as he promised to give the

administration “a jar of whoop-a–.”

At an AFGE rally Tuesday outside the AFL-CIO headquarters, just across Lafayette Square from the

White House, Sen. Bernie Sanders (I-Vt.) warmed the crowd by saying, “You are here today not only on

behalf of hundreds of thousands of federal workers who want decent pay and decent working conditions,

but you are here today on behalf of 300 million Americans who understand that what this country is

about is providing quality care for veterans, to the elderly, to the children, to the poor and to the sick.

That’s what you do. Thank you very much for doing it.”

Amid the cheers for Sanders, no one spoke about his leading role in laying the groundwork for today’s

effort to fire feds faster. When Sanders chaired the Senate Veterans Affairs Committee in 2014, he

pushed legislation that provided needed improvements to the scandal-plagued Department of Veterans

Affairs but also hit civil service protections for its senior executives by significantly weakening their

appeal rights against adverse personnel actions. The bill won bipartisan approval, and then-President

Barack Obama signed it without a word of dissent about the employee-offending provisions. To the

Obama administration’s credit, in 2016 it told Congress the Justice Department would not defend the

section of the law that prohibited appeals to the presidentially appointed members of the Merit Systems

Protection Board.

There was no mention of that as Cox led the crowd in a chant of “Bernie, Bernie, Bernie.”

Read more:

Budget provides no raise, targets retirement benefits for federal employees

Columnist Joe Davidson covers federal government issues in the Federal Insider, formerly the Federal

Diary. Davidson previously was an assistant city editor at The Washington Post and a Washington and

foreign correspondent with the Wall Street Journal, where he covered federal agencies and political

campaigns.

Follow @JoeDavidsonWP