The House leadership’s proposed budget for fiscal year (FY) 2017, which calls for significant cuts to discretionary and mandatory spending over the next ten years, advanced out of the House Budget Committee last week on a party-line vote, but House leadership has so far been unable to secure the needed votes to pass it on the House floor. House leadership has announced their plan to attempt a floor vote in mid-April as they work to secure additional support from Republican members who want greater cuts to overall spending.
Specifically, the budget calls for $49 billion in unspecified cuts in FY 2017 to “other mandatory programs,” and over the entire ten-year budgetary window, these non-specified federal programs are to be cut by approximately 1.5 trillion dollars. It is important to note that federal employee retirement and health care programs fall under this category of spending.
The accompanying report from the House Budget Committee for H. Con. Res. 125 has now been released and it contains more detailed information regarding the proposed reductions in spending, including the proposed changes and cuts to federal employee benefits. Referred to as “illustrative policy options,” these proposals serve as recommended changes to the actual congressional committee of jurisdiction, which if the budget were ultimately adopted, would be given a dollar figure of how much spending must be cut and tasked with making the final determination of how to achieve those cuts. Federal employee retirement and health care benefit programs fall under the jurisdiction of the House Committee on Oversight and Government Reform, chaired by Representative Jason Chaffetz (UT).
The House Budget Committee’s report suggests that federal employees should make greater contributions toward their FERS (or CSRS) defined benefit pension and that the FERS Supplement should be eliminated. The report also envisions a transition to a defined contribution system, eliminating the FERS system entirely. Other suggestions in the report include adjusting the Thrift Saving Plan’s G Fund rate in a way that would seriously reduce the rate of return of the Fund. The report also advocates reducing the number of federal employees, and recommends instituting a hiring restriction of one new employee for every three that leave.
Also, the report proposes that the premiums paid for the Federal Employees Health Benefits Program insurance benefits should be based on the number of years of federal service, and recommends significantly lowering the government’s share of premiums. It is unclear whether these would be only for retired federal employees or a wholesale change to the program. Both have been suggested in the past.
All these devastating provisions have been introduced in previous House budgets. NTEU has successfully fought these provisions before, and we will fight them again. At this time, it is unclear whether H. Con. Res. 125 has enough support to pass the full House, which is on recess until April 12. We will provide more information as it becomes available.