Cuts to federal retirement, pay freeze part of new budget proposal
- By Chase Gunter
- Mar 19, 2019
The White House is proposing cuts to federal retirement and leave as well as a pay freeze as part of its fiscal year 2020 budget.
Some of the workforce cuts come from past proposals -- including a freeze on pay, shifting pension calculations to an average of an employee's five-highest salary years instead of the current "high three" formulation, increasing contributions to retirement funds and modifying returns on the G-fund, an investment available via the federal Thrift Savings Plan.
The White House is also proposing to combine vacation time and sick leave into a single category and to reduce the overall paid time off available to civilian federal employees.
In addition to the pay freeze, the proposal includes a plan to slow the pace of step increases that move employees up the pay schedule ladder while increasing the use of pay for performance. The White House also wants legislation that seeks to "further streamline procedures" for disciplining and firing federal employees for cause.
For the proposals to become reality, they must first be approved by Congress -- something that's especially unlikely with a Democratic House.
Rep. Gerry Connolly (D-Va.) said the proposals were "not surprising," adding the budget was dead on arrival.
"Instead of recycling these tired and radical attacks on federal workers, the president should move expeditiously to implement the 1.9 percent pay increase Congress sent to his desk almost a month ago," he said. The administration has yet to issue an executive order implementing the retroactive 1.9 percent pay raise for fiscal year 2019 approved by Congress.
Workforce experts and government veterans have pointed to the repeated shutdowns, agency downsizing, budget cuts and proposed pay freezes as major obstacles to government's reputation as an employer.
Shared services and the adoption of automation technologies may reduce agencies' needs for full-time employees, according to the budget proposal. Despite these measures, the budget request calls for a planned increase to the federal civilian workforce. About 70 percent of that increase is due to hiring for the 2020 census, and some civilian agencies would lose employees under the plan.
The merger of the Office of Personnel Management and the General Services Administration is still on the docket. Under the proposed budget, OPM as an independent agency with 5,800 employees will cease to exist. The White House is seeking legislation to transfer OPM policy functions to the Office of Management and Budget and to shift "transactional services" including retirement, health care and insurance to a new organization at GSA. The effort also includes a handoff of security clearance authorities from OPM to the Department of Defense.
The budget specifies that 2,500 jobs be added to GSA, which accounts for some of the OPM workforce. The DOD civilian workforce is also set to add 5,400 jobs, but it is not clear how much of this increase is created by the transfer of OPM's National Background Investigations Bureau.