Obama to propose $35 billion in federal retirement plan cutsNews added by Benefits Pro on April 9, 2013

Benefits Pro

Joined: September 07, 2011

My Company

By Paula Aven Gladych

President Barack Obama's budget proposal is expected to include up to $35 billion in cuts to federal retirement programs.

According to The Washington Post, a senior administration official told reporters at a White House media briefing that the president’s plan would include cuts to federal retirement programs. In prior year budget proposals, the White House has said it would like to save $21 billion from 2013 to 2021 by asking federal employees to contribute more to their retirement savings plans and reducing the federal government’s contributions by the same amount.

The government already has made changes to its pension plans by asking workers to contribute more. People hired in the past year are expected to pay 3.1 percent of their earnings toward their pensions. Most government employees contribute only 0.8 percent.

The president's plan, to be released Wednesday, also is expected to include more tax revenue and cuts to social safety nets like Medicare and Social Security.

The plan already has angered many organizations that are fighting to save Medicare and Social Security. They believe the administration is trying to balance the federal budget on the backs of the people who can least afford it: the elderly.

“Federal workers are not an ATM that elected officials can draw from whenever they’re in a fiscal pinch,” William Dougan, national president of the National Federation of Federal Employees, said in a statement. “Federal workers are already hurting after more than $100 billion in cuts to pay, hours, benefits and jobs. The bank is closed.”

NFFE added that the potential cuts come at a difficult time for millions of federal workers. “Most are facing furloughs, new employees are already paying more for their pensions, and all have been subject to a three-year pay freeze. All of this has happened at a time when agency budgets are shrinking fast and employee workloads are increasing even faster.”

David Cox Sr., national president of the American Federation of Government Employees, accused the White House of continuing to betray federal workers.

The Obama “administration has frozen our pay for three years. It oversaw and approved shifting retirement system costs for new employees that will lower their salaries by 2.3 percent forever. The administration signed the Budget Control Act that brought us the sequester. It is implementing the sequester by imposing lengthy furloughs on federal workers while leaving the larger and costlier contractor workforce untouched,” he said.

The White House’s fiscal 2014 budget, with possibly $35 billion more in retirement system cuts, would just accelerate “the race to the bottom for federal workers and their families,” Cox said.

“We cannot understand how an administration that claims to stand up for working and middle-class Americans can simultaneously push policies that would impose such enormous pain on its own workforce. This proposal is as unnecessary as it is cruel, and we urge lawmakers to reject it entirely.”

The new budget also would change the formula used in calculating federal retirees’ cost-of-living-adjustments so they receive less over time.

Originally published on BenefitsPro.com
The views expressed here are those of the author and not necessarily those of ProducersWEB.
Reprinting or reposting this article without prior consent of Producersweb.com is strictly prohibited.
If you have questions, please visit our terms and conditions
Post Press Release