President Obama signed into law the payroll tax cut package last night, officially increasing of cost of retirement for new federal employees.

The package -- which Congress passed last week -- requires new federal employees to pay 3.1 percent of their salaries into their pensions. That is almost four times as much as the 0.8 percent employees currently pay.

The change will save an estimated $15 billion, which will be used to offset the cost of a one-year extension to long-term jobless benefits. The package also keeps the Social Security tax rate at 4.2 percent for employees -- rather than the usual 6.2 percent -- and prevents a cut to Medicare reimbursement rates.

The pension increases were the result of negotiations that stalled when Rep. Chris Van Hollen (D-Md.) and Sen. Ben Cardin (D-Md.) refused to agree to the package until they were assured the pension changes would not apply to current federal employees. Both voted against the package on the floor.

The next threat for federal employees is the House's transportation package, which counts on more than $40 billion in savings from changes to the federal retirement system. Republicans folded in H.R. 3813 -- a bill from Rep. Dennis Ross (R-Fla.) -- to help offset the cost of the five-year, $260 billion energy and infrastructure package.

H.R. 3813 overlaps with the pension provision in the payroll package; hence, since the payroll package is now law, Ross' bill no longer saves as much as was originally estimated. But H.R. 3813 still makes much more drastic changes than the payroll provision.

Among other things, it requires federal employees with fewer than five years of service to contribute 4 percent of their salary to the Federal Employee Retirement System. 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, meaning that they would be paying more for pensions worth less.