10. FEDERAL WORKFORCE:
Panel approves measure to overhaul pension system
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House Republicans advanced a bill yesterday that would revamp the federal retirement system, forcing employees to pay more for pensions worth less.
The bill -- introduced by Rep. Dennis Ross (R-Fla.) -- would increase the amount employees contribute to their retirement, as well as change the formula used to calculate their pensions. The Oversight and Government Reform Committee sent it to the floor yesterday on a party-line vote but not before Democrats vehemently fought against it.
"What we're about to do today has crossed the lines from disparaging to almost sadism," said Rep. Gerald Connolly, a Democrat whose Virginia district is home to many federal workers. "I think we are breaking faith today. I'm going to oppose this with every fiber of my being, and it is my hope that this bill will die an agonizing death in the United States Senate."
Oversight Chairman Darrell Issa (R-Calif.) chided the other side of the aisle for sounding "like Chicken Little." The retirement system, he said, is unsustainable in its current form, where employees pay 0.8 percent of their pay for a defined benefit pension based on the highest three consecutive years of salary.
"I'm not a hardliner, but let's be honest. There's not a pack of money sitting there," he said.
H.R. 3813 is identical to provisions in the House GOP plan to extend the payroll tax holiday through the end of the year. Republicans hope to use the savings to pay for the extension, and a House-Senate conference committee is likely to discuss those proposals in the coming weeks as it negotiates a payroll package.
But Republicans have been fast-tracking pay-fors from the GOP payroll plan as stand-alone bills in the meantime, and the retirement bill is likely to pass the House. It less likely to get very far in the Senate.
Among other things, the bill requires federal employees with less than five years of service to contribute 4 percent of their salary to the Federal Employee Retirement System. That is five times the current rate. Their annuity would also be based on the highest five years of salary, rather than the current three.
Employees with more than five years of service would see their contributions rise to 2.3 percent of their salary over three years. The formula to calculate their annuity would also change.
Yesterday, Democrats offered several amendments to soften the bill's blow, including one from ranking member Elijah Cummings of Maryland that would have limited the bill's effect to those employees who make more than $100,000 annually. Most amendments failed.
Cummings accused Republicans of using federal employees as a "piggy bank" to fund the needs of the moment. He and other Democrats repeatedly decried the push to cut federal pay and benefits while protecting the "millionaires and billionaires."
"If we continue to disparage public servants, if we continue to denigrate the contributions of civilian workforce ... who will take their places when they retire?" Cummings said.
Democrats also accused Republicans of trying to renege on promises made 20 years ago to federal employees, who expected to get a certain payout from their pensions. Under the bill, those payouts would be reduced.
But Ross dismissed that complaint.
"Unfortunately, reality has reached us today and we can no longer uphold the obligations or the promises that were allegedly made in this regard," he said. "This is a difficult decision to make. It is not at all a swipe at anybody or at any federal employee."
Both Democrats and Republicans experienced at least one moment of bipartisanship when they unanimously passed an amendment from Reps. Stephen Lynch (D-Mass.) and Jason Chaffetz (R-Utah) that would allow employees to deposit lump payments from unused leave into their Thrift Savings Plan, or the government's version of a 401(k).
"Wow. At last this committee is going to do something good for federal employees," said Del. Eleanor Holmes Norton (D-D.C.). "I think we ought to celebrate this amendment."