President Barack Obama is giving federal workers a raise—but he also proposed more than wiping it out with a pension contribution increase.
Federal workers, hit with pay freezes, furloughs, and a shutdown, are at least likely to get a
one percent cost of living adjustment in 2014:
The president proposed a 1 percent raise for January 2014 in the spending plan he released last spring. With no action in Congress to stop the increase –although Republicans pressed to continue the freeze during the budget negotiations that ended this week – Obama has announced that he plans to enact it by default with a presidential order by the end of December.
That's the good news—and in itself, the idea that a one percent cost of living adjustment after three years of pay freezes constitutes good news is pretty outrageous. The bad-but-not-quite-as-bad-as-threatened news is that people starting work for the federal government after January 1 will face higher pension contributions:
The agreement calls for civilian employees hired after Dec. 31 of this year to pay an additional 1.3 percent of their salary toward their annuity, saving the government $6 billion over 10 years. The change affects new employees with less than five years of service. Working-age military retirees will see their cost-of-living adjustment reduced by 1 percent starting in December 2015. When they reach 62, their retired pay will revert back to the full rate of inflation. This change also will save $6 billion.
That means current workers are spared a pension contribution increase that would have more than wiped out their meager raise—something not just Rep. Paul Ryan but President Barack Obama had proposed. But it also makes federal government work that much less appealing, after years of attacks that have already chipped away at the government's ability to hire and retain the kind of experts we really want to see at, say, the National Institutes of Health. That in turn will make current workers' jobs more difficult as they face understaffing and turnover. And it's a loss for all of us who rely on an effective, knowledgeable federal workforce.