Dec. 21, 2012
OMB: Unpaid Furloughs Are Last Resort If Sequestration Occurs: The Office of Management and Budget (OMB) and the Office of Personnel Management (OPM) this week assured federal employees that unpaid furloughs and other personnel actions will be considered as a last resort if Congress and the White House fail to reach a deficit reduction deal by Jan. 2 to avert across-the-board cuts known as sequestration. In an email to union leaders, Office of Management and Budget Controller Danny Werfel said sequestration is different from a government shutdown caused by a lapse in appropriations because sequestration will reduce agency budgets for the entire fiscal year. That means agencies will still have funds available after January 2.
“I do not expect our day-to-day operations to change dramatically on or immediately after January 2, should sequestration occur,” Werfel said. “This means that we will not be executing any immediate personnel actions, such as furloughs, on that date. Should we have to operate under reduced funding levels for an extended period of time, we may have to consider furloughs or other actions in the future. But let me assure you that we will carefully examine other options to reduce costs within the agency before taking such action, taking into consideration our obligation to execute our core mission.”
Werfel said agencies would give employees advance notice if furloughs were to occur. But the personnel actions would be immediately cancelled once a deficit reduction agreement is reached. He said the White House is committed to working with Congress to avoid sequestration, which was put in place by the Budget Act of 2011 and was never intended to be implemented.
 House Approves Bill to Require Feds to Contribute 5% More to Their Pensions, Shift Cuts from Defense to Social Spending: The House of Representatives Thursday night approved a bill that would raise federal employees’ retirement contributions by 5 percent starting in 2013. Under the 2012 Spending Reduction Act, introduced by House Majority Leader Eric Cantor, federal employees’ contributions to their pension plans would go up 1.5% in 2013, 0.5% in 2014, and 1% in 2015, 2016, and 2017. The bill, H.R. 6684, would end the Social Security supplement at retirement for federal employees hired beginning in 2013. The House passed a similar bill in May, but the Senate never took it up.
The bill would also shift automatic defense sequester cuts to non-defense programs. This would devastate the country’s education, infrastructure, health care, security, food inspection and much more. The bill would eliminate the Social Services Block Grant, which serves 1.7 million seniors through programs like Meals on Wheels. It would cut federal funds for nearly 1 million people with disabilities and 6.2 million children. It would eliminate a health prevention fund and programs that help homeowners and prevent foreclosures. It would terminate guaranteed funding for the Consumer Financial Protection Bureau, significantly weakening it.
The White House has threatened to veto the bill.
 Boehner’s Plan B Fails, House Lawmakers Go Home for Christmas: After House Speaker John Boehner abruptly called off a vote on a ‘Plan B’ bill that would have extended tax cuts to income up to $1 million, House leadership Thursday night said members will now go home for Christmas, but they are also advised that the House will return for legislative business after the holiday when needed. Plan B was a counter proposal to President Barack Obama’s plan to allow tax breaks to expire for the wealthiest Americans.
In rare bipartisan fashion, lawmakers from both sides of the aisle cheered its demise. Conservatives did not want to raise taxes on the wealthiest Americans, period. Liberals detested the bill as working families would see their taxes go up by $1,000-$1,500. Plan B would have repealed extensions for the expansions of the Child Tax Credit, Earned Income Tax Credit, and the American Opportunity Credit that were included in the 2009 stimulus, among other things.
Federal Pensions, Social Security, Veterans’ Benefits on Chopping Block: Lawmakers are talking to the White House about changing the way cost of living is calculated, which will then be used to lower federal pensions, Social Security benefits, Veterans’ benefits, and federal benefits to poor children and the disabled. According to the National Committee to Preserve Social Security & Medicare, using the so-called chained CPI (Consumer Price Index) to calculate cost of living “would mean an immediate benefit cut of $130 per year for the typical 65-year old retiree and would grow exponentially to a $1,400 cut after 30 years of retirement.” The average Social Security recipient gets only about $1,200 a month. The proposed measure would deeply hurt seniors as two in five retirees rely on Social Security for 90 percent of their retirement income. Under chained CPI, a disabled veteran who started receiving VA disability benefits at age 30 in 2012 would have his/her benefits cut by $1,425 at age 45; $2,341 at age 55; and $3,231 at age 65, according to Social Security Works. Veterans who are also Social Security recipients would be hurt twice. This is essentially a tax increase they are sneaking in on the middle class and the most vulnerable.
Chained CPI is proposed based on the flawed theory that when the prices of specific products go up, people will switch to cheaper alternatives. This logic only makes sense if you believe a grandma who needs heart surgery could instead get, say, foot surgery. The truth is, most people don’t have the option of changing medical treatment, or housing – the two largest expenses for seniors. Health care costs have already been rising faster than general inflation. Cutting benefits would make life even more difficult for them.
AFGE National President J. David Cox Sr. said using chained CPI to squeeze money out of the old, the sick, and the poor to avert sequestration is unconscionable. After all, they did not cause the deficit or the financial meltdown. Wall Street and the Bush administration’s failed policies did. NP Cox said federal retirees, whose average pensions under the Federal Employees Retirement System (FERS) are just $13,000 a year, will suffer substantial declines in living standards under chained CPI.
“The currently used measures of inflation from the Bureau of Labor Statistics, the CPI-U and the CPI-W, already understate inflation for the elderly,” NP Cox said. “This change will cause a large hit to federal pensions, Social Security benefits, Veterans’ benefits, and federal benefits to poor children and the disabled. It also will raise taxes substantially on the poor and middle class, while leaving the rich untouched.”
Chained CPI is not popular, just like cuts to social safety net programs. According to a recent HuffPost/YouGov poll, 54 percent of Americans oppose switching to the chained CPI.
Congress Approves Bill to Kill 36,000 Civilian Jobs at DoD: When millions of Americans are out of a job, House and Senate negotiators this week passed legislation that will force the Pentagon to add tens of thousands more to the unemployment rolls. Under the final version of the 2013 Defense Authorization Act, up to 36,000 civilians will be laid off as DoD is directed to reduce both civilian and contractor workforces by 5 percent each over five years. The cuts, however, will be far more likely to be carried out on civilian personnel because of civilian personnel ceilings and the lack of spending cap on service contractors, who cost nearly three times more than DoD civilians. As Senate Armed Services Committee Chairman Carl Levin has pointed out in 2010, DoD can’t reliably cut service contracting costs because it lacks an inventory of contract services: “In the past, we’ve found that proposed cuts to contract services are nearly impossible to enforce because expenditures for service contracting are invisible in the department’s budget.”
AFGE National President J. David Cox Sr. said contractors have to bear more cuts since DoD spending for service contracts has more than doubled over the last decade – from $72 billion in 2000 to $150 billion.
“The Pentagon has imposed a cap on the size of the civilian workforce—which prevents it from growing in excess of its complement in 2010,” NP Cox said. “As DoD officials have acknowledged, this cap is forcing managers to use contractors instead of civilians because spending on contractors is uncapped.”
He said reductions in the civilian workforce should be based on workload analysis, i.e., identifying the functions that should no longer be performed by DoD and then dismissing the relevant personnel. Arbitrary cuts are contrary to law and common sense.
The anti-federal employee provision was authored by Sen. John McCain of Arizona.
 AFGE, Coalition Thank Retiring Sen. Akaka: AFGE and the Federal-Postal Coalition this week sent a letter to Hawaii Senator Daniel Akaka thanking him for his service to the country and for being a staunch supporter of federal employees. After 36 years in Congress, Sen. Akaka is retiring at the end of this session. Over the years, Sen. Akaka has sponsored and helped pass countless pro-federal employee bills, including the Whistleblower Protection Enhancement Act which was recently signed into law.
“Your leadership at the helm of the Oversight of Government Management Subcommittee will be sorely missed when Congress reconvenes next year,” the coalition wrote.” “During your time in the Senate you championed issues of great interest to our organizations, including whistleblower protection, hiring reform, non‐foreign COLA equity, and supervisor training. Moreover, when federal and postal employees and retirees needed a voice in Congress, you never hesitated to stand up and oppose legislative proposals that would have a negative impact on them.”
“It has been a privilege to work with you to build a stronger federal and postal workforce and identify solutions to the challenges facing federal agencies and employees. The country and our government are stronger and better prepared to meet the challenges of the 21st century because of your efforts. We wish you all the best in your retirement, and hope you enjoy the well‐deserved time you will have with your family. As you take leave of Capitol Hill, know that your contributions to federal and postal employees and retirees are recognized and your legacy will be carried on as we continue working to defend and strengthen the federal and postal workforce.”
Congress Rejects New Rounds of BRAC: Lawmakers this week approved the 2013 Defense Authorization bill with a provision that rejects the Pentagon’s requested new rounds of Base Realignment and Closure.
Your Chance to Be a Santa and Help Those in Need: This holiday season, as you’re buying gifts for your loved ones and looking forward to spending quality time with them, please consider extending your love and support to fellow federal workers who are not as fortunate. There are many federal employees who have encountered an unexpected financial hardship such as a death in the family, loss of property, or a costly home repair bill. You can help by donating to the Federal Employee Education & Assistance Fund (FEEA), which is a non-profit organization devoted to helping civilian federal and postal employees.
FEEA provides this assistance in a number of ways, one of which is the emergency assistance program that provides no-interest loans for federal employees in need. FEEA also provides grant assistance if federal employees need financial help in the aftermath of a natural disaster such as Hurricane Sandy. Federal workers helping federal workers is both the motto and the mission of FEEA. The way that this help is possible is through donations of people who recognize the importance of the organization and through their consistent financial contributions.
If you would like to help other federal workers in their time of need, please consider making either a one-time or reoccurring donation to FEEA here. Your contribution could make the difference between a federal family in need receiving assistance or not.
This Week in Labor History: Dec. 20, 1970 - The Occupational Safety and Health Act (OSHA) takes effect today.
This Week’s Tweet: “Will Boehner’s speakership survive until Plan C?” ~ @ezraklein
[The vote to elect the next speaker is on Jan. 3 and he needs 218 votes to become speaker]
Hot on YouTube: The very best of Sheldon Cooper
Inside Government: Tune in now to AFGE’s “Inside Government” to learn about federal employees’ sacrifices toward deficit reduction. The show, which originally aired on Friday, Dec. 21, is now available on demand. Rep. Gerry Connolly of Virginia discussed the $103 billion dollars federal employees will contribute toward deficit reduction during the next 10 years and updated listeners on the fiscal cliff negotiations. AFGE National President J. David Cox Sr. then detailed the union’s 2013 agenda, including membership and bargaining goals. Cox also analyzed the “Best Places to Work in the Federal Government” survey and detailed a Legionnaires’ disease outbreak at a Department of Veterans Affairs hospital in Pittsburgh. Lastly, AFGE Defense Conference Chair Don Hale addressed the impact sequestration would have on civilian Defense Department workers and also discussed DoD’s labor-management partnership.
 Listen LIVE on Fridays at 10 a.m. on 1500 AM WFED in the D.C. area or online at FederalNewsRadio.com. For more information, please visit InsideGovernmentRadio.com.
Quote of the week
Sen. Patty Murray of Washington joked about House Speaker John Boehner’s Plan B:
“Well, I actually got really excited when I heard Speaker Boehner talking about Plan B because I thought finally, they’ve made progress on a really important women’s health issue that I’ve been working on. But that was not the case.”
*****AFGE Week in Review will return in January, 2013*****
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