NATCA Bookshelf

FULL BACKGROUND ISSUE For the past seven years, legislators in both chambers of Congress have been trying to balance the federal budget in large part by making cuts to federal employees' pay and benefits. Such cuts have affected NATCA members. We have seen the House of Representatives adopt new procedural and operating rules that make it easier to propose cuts to federal spending by reducing the number of government employees and their salaries. Pay freezes and furloughs also have taken their toll on federal employees. Some proposed cuts include increased retirement contributions for current and future employees, a reduction in retirement benefits for current employees and annuitants, and alterations to retiree health benefits based on length of service. MESSAGE FAA employees are essential to the safety and efficiency of the National Airspace System. Congress should not target FAA employees in an attempt to balance the federal budget. BACKGROUND Beginning in the fall of 2010, the bipartisan National Commission on Fiscal Responsibility and Reform (also called the Simpson-Bowles Commission or the Deficit Commission) suggested reducing the federal budget through significant cuts to federal employees' pay and benefits. The final report — not formally approved by the entire Commission — laid the groundwork and became the framework for other anti-federal employee actions. The report's provisions have since been included in a range of amendments, proposed legislation, and budget resolutions. These include: • Freezing federal salaries, bonuses, and other compensation for federal employees for three years; • Cutting the federal workforce by 10 percent; • Using highest five years to calculate civil service pensions rather than the current high three years. This would apply to both the Civil Service Retirement System (CSRS) and the Federal Employee Retirement System (FERS); • Asking federal workers to contribute half of the cost (compared to the current 1/14th) of their defined benefit portion of FERS; • Reforming cost-of-living-adjustment (COLA) payments for civilian and military early retirees; • Switching to a "more accurate" measure of inflation, the chained Consumer Price Index (CPI), for calculating COLAs for federal retirees and social security, which reduces the buying power of both groups; and • Raising the regular Social Security retirement age to 68 in 2050 and 69 in 2075 (affects FERS employees). RECENT THREATS TO FEDERAL EMPLOYEES On April 12, 2017, the Office of Management and Budget (OMB) Director sent a letter to all agency heads directing them to make major cuts in programs, even directing them to consider ways to implement workforce reductions. The OMB letter states that through these actions the White House aims to make the federal government "lean, accountable, and more efficient." Although the OMB memo is light on concrete proposals, it is a clear signal that this Administration will prioritize government-wide reform and a reduction of the federal civilian workforce. While we have neither a full budget proposal from the White House, nor a budget resolution from Congress, last year, we saw the budget process used as a vehicle to attack federal employees. For example, in the House, former Budget Committee Chairman Tom Price (R-GA) released a Fiscal Year 2017 budget resolution (H.Con.Res.125) that attacked federal employees. While budget resolutions do not have the force of law, they lay the groundwork for the appropriations committees to allocate government funding. The anti-federal employee provisions included in the budget resolution included: • Requiring all existing federal employees, including members of Congress and congressional staff, to contribute more toward their retirement; • Cutting the federal workforce at certain agencies by 10 percent through attrition, and allowing the administration to hire one employee for every three who leave government service (with exceptions for national security positions); • Revising how subsidies for federal retiree health care are calculated by basing the benefits for retired federal employees on their length of service, thereby reducing premium subsidies for retirees who had relatively short careers; and • Changing the Federal Employees Health Benefits Program. 55

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