April 16, 2013Obama Budget Proposal Shows Disrespect, Ingratitude to Federal Employees: President Obama's fiscal 2014 budget marks a shameful abandonment of his campaign promise to protect the middle class and needy from tax increases or harmful benefit cuts. The budget includes proposals that would cut federal retirement benefits, cut federal employee health benefits, cut Social Security benefits, and cut federal jobs. The budget also proposes to end the three year pay freeze with a 1% adjustment, an amount so low that it banks $18 billion in savings over ten years for the government to spend elsewhere. The administration's budget hits federal retirement benefits in three ways: denying pay adjustments, so the salaries on which retirement benefits are based are lower, increasing by 1.2% the amount of salary that employees hired before 2013 would pay for their benefit, and reducing the annual cost-of-living increase in Social Security and annuities by using an inferior measure of inflation known as chained CPI (Consumer Price Index). The 1.2% increase, to be phased in over three years beginning in 2014, would bring up the contributions of Federal Employees Retirement System (FERS) employees from 0.8% to 2% and increase the contributions of Civil Service Retirement System (CSRS) employees from 7% to 8.2%.
The proposed change to the chained CPI would change the way retirement benefits are calculated. According to an analysis by the Center for Economic and Policy Research, using chained CPI for indexing income tax brackets would mean raising taxes 14.5% for those earning between $10,000 and $20,000 a year. Sixty-nine percent of the tax increases resulting from chained CPI-indexing would come from households earning less than $100,000. Federal retirees, whose average pensions under FERS are just $13,000, will suffer substantial declines in living standards under chained CPI. The average Social Security recipient, who at age 65 receives just $15,000 per year, will suffer cuts of $650 a year by age 75 and $1,130 a year by the time she or he turns 85.
"Instead of holding to its promise to protect the middle class and the working poor, the administration seems determined to contribute to a worsening of living standards for federal workers, disabled veterans, and the elderly," AFGE National President J. David Cox Sr. said. "Adding FEHBP cuts to the pay freeze, furloughs, and retirement and Social Security cuts just defies comprehension. The president actually says in his budget that federal employees "deserve our respect and gratitude. I would describe this package of cuts as evidence of disrespect and ingratitude, and I know that's how all of our members feel as well."
Agencies with a proposed budget increase:
Commerce: $8.6 billion, a $1 billion increase
Education: $71.2 billion, a $3.1 billion increase
Energy, $28.4 billion, an 8% increase
HHS: $80.1 billion, a $3.9 billion increase
HUD: $47.6 billion, a 9.7% or $4.2 billion increase
Interior: $11.7 billion, a 4% increase
Justice: $27.6 billion, a 3.1% increase
Labor: $12.1 billion, a $20 million increase
National Science Foundation: $7.6 billion, a $593 million increase
SSA: $12.3 billion, a 7% increase
Transportation: $76.6 billion, a 5.5% or $4 billion increase
VA: $63.5 billion, an 8.5% increase
FDA: $4.7 billion, up from $4.5 billion
Agencies with a proposed budget decrease:
Defense: $526.6 billion, a $3.9 billion decrease
Homeland Security: $39 billion, a $615 million decrease
State: $47.8 billion, a 6% decrease
Treasury: $14.2 billion, a 2.3% decrease
Corps of Engineers: $4.7 billion, a 5.5% decrease
EPA: $8.2 billion, a 3.5% or $296 million decrease
NASA: $17.7 billion, a 0.3% or $50 million decrease
SBA: $810 million, a $109 million decrease
Same amount as last year:
Agriculture: $22.6 billion
What Else Would the Obama Budget Do?
Some Lawmakers Reject Obama's Proposed Cuts to Social Security, Medicare as Too Modest: Many in Congress will reject Obama's proposed cuts to Medicare and Social Security not because it will harm most Americans but because it doesn't do enough damage. Senate Majority Leader Mitch McConnell of Kentucky, for example, said the cuts are too "modest" to justify nearly $700 billion in new taxes on the wealthy. House Budget Committee Chairman Paul Ryan of Wisconsin dismissed Obama's offer to use chained CPI, which is actually one of Ryan & Co.'s key priorities, to reduce benefits for retirees. "I don't see this as fundamental entitlement reform as much as clarifying a statistic which does happen to save money," he said.
- Call for more rounds of base realignment and closure (BRAC)
- Allow domestic partners of federal employees to be eligible for health benefits
- Propose $370 billion in cuts to Medicare
- Expand preschool to cover all 4-years-olds across the country
- Cut subsidies to farms
- Force millionaires to pay a minimum tax rate of 30%
- Close the loophole that allows Wall Street hedge fund managers to pay a special lower tax rate
- Eliminate tax breaks and deductions for oil and gas companies.
- Make permanent the American Opportunity Tax Credit (credit for higher education cost) and the expansions of the Earned Income Tax Credit and Child Tax Credit, which provide aid to low/middle-income families.
- Reform some of the tax loopholes that allow corporations to get away with shifting profits overseas to avoid U.S. taxes
- Increase high earners' premiums for Medicare Parts B and D
- End "pay for delay" deals, in which drug companies pay generic suppliers to delay releasing generic versions of the brand-name drugs
- Increase minimum wage to $9/hour
In Testimony, AFGE Blasts Obama Proposal to Shift Health Care Costs onto Feds: In testimony delivered last Thursday before a House subcommittee, AFGE Public Policy Director Jacqueline Simon criticized proposals that the Obama administration has presented for altering the Federal Employees Health Benefits Program. As described in President Obama's fiscal 2014 budget released Wednesday, the proposals would shift costs for the program onto federal employees to the tune of $8.4 billion over 10 years.
"With federal pay frozen for three straight years, massive tax increases on FERS employees via increased retirement contributions, and furloughs of up to 14 days that may be repeated each year for the next decade, federal employees cannot withstand any more reductions in their compensation," Simon said. "Federal workers pay on average 30% of premiums and as much as 64% in some plans, yet we are denied information and denied any input in decisions about changes in benefits, changes in administration or changes in the program's structure. Workers are apparently just supposed to keep quiet and keep paying."
Fedscape from the 2014 Budget:
NP Cox's Intervention Saves Jobs at Anniston Army Depot: AFGE National President J. David Cox Sr.'s recent intervention led to the lifting of the total hiring freeze at the Anniston Army Depot and an assurance that work won't be contracted out. Nearly 400 term employees working in support of missions in Iraq and Afghanistan were being let go as their term expired and the Army discussed contracting out those jobs because of the hiring freeze. NP Cox wrote a strongly worded letter to Assistant Secretary of Defense for Readiness and Force Management Fred Vollrath criticizing the Army's failure to extend current workers, the hiring freeze and the plan to contract jobs held by civilian employees. NP Cox said the freeze was outrageous especially when the money was available and mission workload was at stake. In an email to NP Cox, Vollrath said the work won't be outsourced and the depot will be able to hire employees as needed through either term or temporary hiring authority.
- 85% of federal employees live and work outside of the Washington, D.C. metropolitan area.
- Since the 1950s and 1960s, the U.S. population increased by 77%, the private sector workforce increased 137%, while the size of the federal workforce rose just 10%, with 92 residents for every federal worker. By 2012, the ratio of residents to federal workers had increased to 148. Relative to the private sector, the federal workforce is less than half the size it was back in the 1950s and 1960s.
- Employment levels for 2014 are expected to go up 0.3%. Most of the growth is in the VA. Employment increases also are expected at the Justice Department and Homeland Security, Patent and Trade Office, FDA, and the IRS. Workforce decreases are expected at USDA, EPA, and NASA.
- In FY 2009, there were 512,240 veterans in the federal government – 26% of the workforce. By the end of FY 2012, the number of veterans had grown to 611,784, or 30% of the federal workforce.
- Federal employees such as doctors, engineers, scientists, statisticians, and lawyers now make up a large portion of the federal workforce. More than half (55%) of federal workers work in the nine highest-paying occupation groups as judges, engineers, scientists, nuclear plant inspectors, etc., compared to about a third (33%) of private sector workers in those same nine highest paying occupation groups.
- While 45% of private sector workers work in the seven lowest-paying occupation groups as cooks, janitors, service workers, clerks, laborers, manufacturing workers, etc., about 26% of federal workers work in those seven lowest-paying occupation groups. Between 1981 and 2011, the proportion of the federal workforce in clerical occupations fell from 19.4% to 5.1% of the workforce, and the proportion of blue-collar workers fell from 22% to 9.7%.
- About 22% of federal workers have a master's degree, professional degree, or doctorate versus only 10% in the private sector. Only 19% of federal employees have not attended college, compared to 40% of workers in the private sector.
- Federal workers tend to have demographic characteristics associated with higher pay in the private sector. They are more experienced, older and live in higher cost metropolitan areas. For example, 21% of federal workers are 55 or older – up from 17 percent 10 years ago and significantly more than the 16 percent in the private sector.
- The number of federal retirements is on a steady increase, rising from 95,425 in 2009 to 96,133 in 2010 to 98,731 in 2011 and 112,817 in 2012. Increases in retirement are expected to continue. Nearly 22% of the over 687,000 respondents to the 2012 Federal Employee Viewpoint Survey expressed an intent to retire during the next five years.
57 House Lawmakers Urge Hagel to Revisit Furloughs Decision at DoD: AFGE DoD Locals have so far garnered support of almost 60 House lawmakers who have signed on to a letter calling on Defense Secretary Chuck Hagel to not rigidly impose arbitrary furloughs at DoD. The letter was initiated by House Armed Services Committee ranking member Adam Smith of Washington, who is urging his colleagues to sign on to the bipartisan letter asking the Pentagon to rethink the decision to furlough civilian workers, put hiring on hold, and fire temporary and term employees. With DoD considering making further reductions in furloughs, AFGE has asked our Locals to intensify their efforts to generate signatories to the Smith letter. The deadline for signing has been extended until April 19. Here is the list of the 57 current signatories:
Smith (WA); Bordallo (GU); Shea-Porter (NH); Larsen (WA); Langevin (RI); Owens (NY); Davis (CA); Johnson (GA); Enyart (IL);Cartwright (PA); Gallego (TX); Ryan (OH); Loebsack (IA); Tonko (NY); Brady (PA); Castro (TX); Heck (WA); Moran (VA); Kilmer (WA); Cole (OK); Bishop (UT); Scott (GA); O'Rourke (TX); Kind (WI); Duckworth (IL); Brownley (CA); Cummings (MD); Visclosky (IN); McGovern (MA); McCollum (MN); Courtney (CT); Van Hollen (MD); Maffei (NY); Pingree (ME); Thompson (CA); Gibson (NY); Barber (AZ);Garamendi (CA); Michaud (ME); Carson (IN); Honda (CA); Wolf (VA); Kennedy (MA); Mullin (OK); Lankford (OK); Sarbanes (MD); Sires (NJ); Maloney (NY); Turner (OH); Ruppersberger (MD); Rush (IL); Lewis (GA); Holt (NJ); DelBene (WA); Smith (NJ); Kaptur (OH); and Clay (MO).
AFGE Coast Guard Council Wins Labor-Management Cooperation Award: The AFGE Council 120 and the U.S. Coast Guard have been selected as the recipients of the Society of Federal Labor and Employee Relations Professionals (SFLERP) 2013 Labor-Management Cooperation Award.
"It is clear that your organizations have been very successful at working together to improve your relationship through the establishment of labor-management forums, engagement in pre-decisional discussions, and LMR training. Such efforts serve as examples of how labor and management can work together in the federal sector. For that reason, the Society applauds your efforts." said SFLERP Executive Director Paco Martinez-Alvarez.
The Awards Luncheon will be held April 19 in Arlington, Va. Council 120 was formed five years ago but has accomplished much despite significant challenges including the massive reorganizations that affected most bargaining unit employees across the country.
AFGE Blasts TSA for Putting Interests of Knife Lobbyists over Flying Public: Knife industry lobbyists appear to have played a key role in getting the Transportation Security Administration to allow knives back on commercial aircraft for the first time since 9/11. After intense lobbying by knife manufacturers and knife industry groups, the policy change that will allow small knives on airplanes is set to take effect April 25. While knife advocates had their voices heard at TSA headquarters, TSA failed to consult with the union that represents 45,000 Transportation Security Officers. In a press release issued after the decision was made, the American Knife & Tool Institute – a lobbying group run by knife manufacturers – touted itself as being "instrumental" in TSA's decision to remove small knives from its list of prohibited items.
"So now we know where this reckless and dangerous policy change came from," said AFGE National President J. David Cox Sr. "This wasn't strictly about improving the screening process at our nation's airports as TSA has claimed. The knife lobby fought for the change, but TSA never disclosed closed-door meetings with knife advocates when the policy change was announced. This decision compromises the safety of TSOs, flight attendants and the flying public for the benefit of the knife industry. Congress must step in and reverse this misguided policy change."
AFGE to Hold Midwest Training Conference in South Dakota: Join other AFGE leaders and activists at the Midwest Regional Training conference in Spearfish, South Dakota, on May 20-24, 2013. The training, hosted by District 6, 7, 8 and 9, will be held in the beautiful Black Hills of South Dakota. The 2013 Midwest Regional Training will include:
For complete registration and conference information, go to www.afge.org/midwestregion. Register by May 3rd and save $50 off the regular registration fee.
- A variety of training programs for union leaders such as Collective Bargaining, Representation, EEO, Financial Officers, and New Leaders.
- New advanced-level courses for experienced labor leaders and activists.
- A reception and live auction to raise funds for AFGE Political Action Committee (PAC). If you have any questions about the reception or auction please don't hesitate to contact AFGE Legislative & Political Organizer, Tim Snyder at 202-316-7645 or email@example.com.
This Week in Labor History: April 15, 1889 – A. Philip Randolph, civil rights leader and founder of the Brotherhood of Sleeping Car Porters, was born in Crescent City, Fla. Randolph (1889-1979) was not only the most famous African American labor leader of his time, he was also a key figure in the civil rights movement. At 75, Randolph instigated and directed the 1963 March on Washington for Jobs and Freedom. The civil rights legislation that followed is perhaps his greatest legacy.
This Week's Member Benefit: AFGE Rewards is a new member benefit from AFGE that helps you save while you shop. This powerful rewards program is free to join, free to use, and gives you online shopping access and great savings opportunities at over 600 stores like Target, Macy's, and Home Depot. As a member you'll earn up to 3% cash back on purchases to help you pay for expenses now. Or, to help you save for the future, this unique problem gives you the option to increase your rewards by redeeming them as U.S. Savings Bonds! With AFGE Rewards you have an even smarter way to make the most of your everyday spending. Click here to see how it works.
This Week's Tweet: "Wait, Greg Walden attacked Obama budget for its "shocking attack on seniors" when the House-passed budget pockets the same Medicare cuts?" ~ @jonathanweisman
Inside Government: Tune in now to AFGE's "Inside Government" for reactions to President Obama's fiscal 2014 budget proposal. The show, which originally aired on Friday, April 12, is now available on demand.
Quote of the Week:
- AFGE National Council of Social Security Administration Field Operations Locals President Witold Skwierczynski addressed the chained Consumer Price Index (CPI) and increase in federal employees' pension contributions in the president's budget proposal. Skwierczynski also discussed the status of unresolved articles – appraisals, merit promotions and telework – in the union's contract agreement with SSA management.
- National Committee to Preserve Social Security and Medicare President and CEO Max Richtman continued the budget conversation, analyzing the chained CPI impact on Social Security benefits for seniors and veterans.
- Lastly, AFGE Public Policy Director Jacque Simon detailed proposed changes to the Federal Employees Health Benefits Program
AFL-CIO Policy Director Damon Silvers on Obama's proposed cuts to Social Security:
"President Obama was not elected to cut Social Security…He was elected BECAUSE voters thought he was a better protector of safety net programs."
American Federation of Government Employees, AFL-CIO 80 F Street, N.W., Washington, D.C. 20001 | Tel. (202) 737-8700 | Fax (202) 639-6492 | www.afge.org
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