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April 27, 2012
 House Panel Approves Tax Hike on Federal Employees:The House Oversight and Government Reform Committee on Thursday voted along party lines, 19-15, to approve a measurethat would amount to a $79 billion tax increase on federal employees by requiring them to contribute an additional 5 percent of their salary toward their retirement plan with no increase in benefits. The tax increase would phase in over five years starting in 2013 for current employees. New hires who have less than five years of prior federal service would see the full 5 percent increase starting next year.
AFGE protested the legislation, saying 60 percent of federal employees are paid an equivalent of a GS-9 or below. And they have already sacrificed $75 billion in pay freeze and increased pension contributions while federal contractors have not given up a nickel.
The following are the lawmakers who voted for a tax increase on federal employees: Issa, Calif.; Burton, Ind.; Turner, Ohio; Chaffetz, Utah; Mack, Fla.; Walberg, Mich.; Lankford, Okla.; Amash, Mich.; Buerkle, N.Y.; Gosar, Ariz.; Labrador, Idaho; Meehan, Pa.; DesJarlais, Tenn.; Walsh, Ill.; Gowdy, S.C.; Ross, Fla.; Guinta, N.H.; Farenthold, Texas; Kelly, Pa.
 VA’s Budget Exempt from Sequestration: In response to the Government Accountability Office (GAO)’s query about the impact of automatic across the board spending cuts, known as sequestration, on Veterans Affairs programs including veterans’ medical care, the Office of Management and Budget (OMB) said the VA budget is exempt from sequestration because of provisions under the 1985 Balanced Budget and Emergency Deficit Control Act and the 2010 Pay-As-You-Go Act. The 1985 law exempted certain VA programs in the event of sequestration and set the maximum reduction for veterans’ medical care at 2 percent. The 2010 law amended the 1985 law to say that all programs administered by the VA are protected from sequestration. The 2011 Budget Control Act that called for sequestration did not amend those VA provisions.
“The conclusion we have reached is that all programs administered by the VA, including veterans' medical care, are exempt from sequestration,” Steven Aitken, OMB's deputy general counsel, wrote in an April 23letter to Julia Matta, assistant general counsel for appropriations and budget at GAO.
Veterans groups, which feared that the cuts would force the VA to ration services and extend wait times, praised the decision.
“Disabled veterans can breathe a sigh of relief today knowing that VA programs are exempt from sequestration,” said Richard L. DeNoyer, commander-in-chief of the 2 million-member Veterans of Foreign Wars, in a statement. “Today’s decision means the healthcare plans and programs the VA currently provides to millions of disabled veterans will continue unabated, as will claims processing and veterans’ burial benefits. Protecting the VA is exactly what President Obama told me he would do during a meeting in the Oval Office in March, and now he has come through for America’s veterans and survivors. It’s a great day to be a veterans’ advocate.”
OMB Gives Contractors a 10% Pay Raise: While federal employees’ pay has been frozen for two years, the Office of Management and Budget recently decided to give contractors a 10 percent pay increase. According to a notice issued this week in the Federal Register, OMB increased the maximum annual salary that government contractors can charge taxpayers for each of their five most highly paid contractors from $693,951 in 2010 to $763,029 in 2011. (For the Defense Department, the cap is also supposed to apply to all contractor employees – not just the top five executives – because of a provision in the 2012 Defense Authorization Act) The compensation cap has tripled since 1995 and will continue to grow unless the statutory formula used for determining the cap is revised.
“Current federal employees have had their own salaries frozen for two years and new employees will have to pay four times as much in retirement contributions, saving the government $75 billion. Yet nothing is being done to trim out-of-control contractor spending,” AFGE President John Gage said. “Taxpayers should not be on the hook for these outrageous salaries that no one in government earns – not federal employees, not members of Congress and not even the President of the United States.”
In March, a bipartisan group of senators led by Senator Barbara Boxer of California introduced a bill that would cap the reimbursement rate at the president’s salary, currently $400,000, and apply it to all contractor employees. Lowering the cap would not limit how much these contractor employees can earn, only how much can be charged to the government. A similar bill introduced in the House by Representative Paul Tonko would lower the cap to $200,000 and apply it to all contractors. Unfortunately, OMB has not endorsed extending the cap to all contractor employees, proposing instead to lower the cap to $200,000 for only the five most lavishly compensated employees at each government contractor.
26 Senators Urge Defense to Lift Civilian Workforce Cap: Twenty-six senators are urging Defense Secretary Leon Panetta to lift the arbitrary cap on the civilian workforce. In a letter to Panetta this week, the senators said under the Defense Department’s co-called “Efficiency Initiative,” the number of civilian employees has been capped at 2010 levels, but there has been no comparable cap on the contractor workforce. This has encouraged managers to use contractors instead of civilian employees, even though privatization is more expensive than doing the work in-house and also violates the law. The letter, initiated by Sens. Sherrod Brown of Ohio and Kirsten Gillibrand of New York, asks Panetta to manage each group of workers – military, civilian, and contractors – from the total force perspective.
“When determining whether services should be performed by employees or contractors, DoD’s sourcing decisions should be made on the basis of law, cost, policy and risk, and not because DoD managers simply have fewer civilian employee slots,” the senators wrote.
Until the cap on the civilian workforce is lifted, DoD should cap spending on service contracts at fiscal 2010 levels, as mandated by the 2012 National Defense Authorization Act, and should cap the service contractor workforce, the lawmakers wrote. A companion letter in the House, initiated by Rep. Maurice Hinchey of New York, was signed by 131 lawmakers and sent to Panetta in March.
“This ill-conceived cap has forced managers to cut tens of thousands of federal jobs, while the much larger and more expensive contractor workforce continues to grow unchecked,” AFGE President John Gagesaid. “It’s long past time that we restore some balance and fairness to how the entire workforce is managed and treated. I hope Secretary Panetta takes immediate action to comply with these recommendations.”
Here are the 26 signatories: Brown, Ohio; Gillibrand, N.Y.; Mikulski, Md.; Harkin, Iowa; Murray, Wash; Leahy, Vt.; Sanders, Vt.;, Casey, Pa.; Wyden, Ore.; Akaka, Hawaii; Tester, Mont.; Coons, Del.; Boxer, Calif.; McCaskill, Mo.; Begich, Alaska; Blumenthal, Conn.; Durbin, Ill.; Stabenow, Mich.; Shaheen, N.H.; Franken, Minn.; Lautenberg, N.J.; Menendez, N.J.; Conrad, N.D.; Merkley, Ore.; Klobuchar, Minn.; and Schumer, N.Y.
Student Loan Rates to Double July 1: If Congress doesn’t act, student loan interest rates will double on July 1. Congress passed the College Cost Reduction and Access Act in 2007 to lower the interest rate on federal student loans from 6.8 percent to 3.4 percent, but the law expires July 1. The Obama administration wants to extend it, but many right wing lawmakers have voiced “concerns” that helping these students would cost the government $6 billion, even though last week they had no problem giving corporations another tax break that would add $46 billion to the deficit. House Budget Committee Chairman Paul Ryan’s Path to Poverty budget blueprint, which passed the House and has become the right wing’s vision of America, has counted on the student loan rates to double in order to save money so that their campaign donors can have another tax break.
Feeling pressure from the administration and their colleagues, right wing lawmakers this week changed course and said they would support keeping the student loan rates at the current level, but they want to pay for it by terminating the Prevention and Public Health Fund created by the 2010 health care law that benefits middle-class Americans. That doesn’t sit well with some members of Congress.
“Here they go again on women’s health,” said Rep. Chris Van Hollen of Maryland. “By raiding a fund that’s going to provide breast cancer screening, cervical cancer screening, we know that they’re really not serious about trying to help people. Once again they’re not talking about getting rid of the subsidies for corporate jets or oil companies.”
“I believe there are ways we could do so without eliminating important public health funding, such as ending unnecessary tax breaks for big oil companies making record profits,” said Rep. Steny Hoyer of Maryland.
Anti-Union Measure Fails in Senate: A measure that would have blocked a new National Labor Relations Board (NLRB) rule that streamlines union-forming elections failed in the Senate Tuesday. S.J. Res. 36 offered by Sen. Mike Enzi of Wyoming failed along party lines, 45 to 54. The NLRB rule, which is strongly opposed by businesses and right-wing lawmakers, will give employees who have petitioned for an election the right to vote in a timely manner. It will help reduce the delays, inefficiencies, abuse of process, and unnecessary litigation that plague the current system. The rule is due to take effect April 30. Contrary to the right wing’s false claim, the new rule does not encourage unionization as it also applies to elections to decertify a union. In response to the new election rule, right-wing House lawmakers passed a bill last November to give employers new tools to delay union elections. The measure was never considered by the Senate.
AFGE Volunteers Needed to Evaluate Scholarship Applications: AFGE is seeking interested members to volunteer on Federal Employee Education and Assistance 's regional scholarship committees! Committees receive their scholarship application packages by early June and must meet and select winners before August. You can learn more about what scholarship volunteers do by visiting the FEEA website or contacting the regional representatives here. Don't miss out on this great opportunity to represent your union and be part of the scholarship award process! Click here to find out more about FEEA and its numerous contributions to federal employees.
This Week in Labor History: April 25, 1886 - The New York Times declares the struggle for an eight-hour workday to be “un-American” and calls public demonstrations for the shorter hours “labor disturbances brought about by foreigners.” Other publications declare that an eight-hour workday day would bring about “loafing and gambling, rioting, debauchery and drunkenness.”
Inside Government: Tune in now to AFGE’s “Inside Government” for a closer look at the “Buffett Rule” tax legislation. The show, which originally aired on Friday, April 20, is now available on demand. Campaign for America’s Future Co-director Roger Hickey discussed the legislation, which recently failed to garner enough votes in the Senate, and how it would have impacted public services. Hickey also addressed key issues in the upcoming presidential election. GovLoop Founder and President Steve Ressler then previewed the Next Generation of Government Summit July 26 – 27 and also detailed GovLoop’s career guide and mentor program. Lastly, National Women’s Law Center vice presidents Emily Martin and Judy Waxman joined Center for American Progress Senior Constitutional Policy Analyst Ian Millhiser to discuss the constitutionality of the Affordable Care Act and its impact on women.
Listen LIVE on Fridays at 10 a.m. on 1500 AM WFED in the D.C. area or online atFederalNewsRadio.com.
 Quote of the Week
Rep. Chris Van Hollen of Maryland on the right wing’s plan to end the Prevention and Public Health Fund – not tax breaks for the rich – in order to pay for a bill that would keep the student loan rates low.
“Here they go again on women’s health. By raiding a fund that’s going to provide breast cancer screening, cervical cancer screening, we know that they’re really not serious about trying to help people. Once again they’re not talking about getting rid of the subsidies for corporate jets or oil companies.” |
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