FEDweek Weekly Issue: Wed, April 1, 2015

Budget Vote Sets Stage for More Disputes

Both the House and Senate have approved budget plans that could have major implications for federal pay, benefits and job levels, although the ideas built into those plans still would have to be enacted through separate legislation. Congress is on a recess through next week and when it returns the two chambers hope to agree on a compromise version that would go through one more round of voting. The budget resolution does not have the force of law, however, but only serves as a planning document for Congress to draft appropriations bills that would be subject to a White House veto—an action that likely would be difficult for Congress to override. Both versions contain spending limits that they assume would be met in part by changes including: raising required contributions to retirement, by about 6 percent of salary in most cases; reducing the non-security workforce by 10 percent by filling only one of every three future vacancies; eliminating the retirement supplement for most FERS employees who retire before age 62; linking the government's contribution toward FEHB premiums to general inflation, rather than the typically higher increase in premiums, and reducing the government share for retirees who had relatively short federal careers; and reducing the rate of return on the TSP's government securities G fund. Only the House laid out that list, however, and even then not in any level of detail. The precise impact would become clearer if those ideas are translated into specific spending bill language in the months ahead.