Stealing From Federal Civil Servants: You May Be Next

Imagine that an employer wishes he hadn't paid you so much in the past, so he goes into your bank account and takes what he wants. Sound outrageous? That's essentially what the federal government may be about to do to its workers!

And if that doesn't make you angry, consider this. The rest of us may be next. The battle to protect the earned compensation of federal employees is everyone's battle.

The Budget Conference Committee, which formed as a result of the government shutdown this October, is scheduled to report on December 13. To meet that deadline, Senator Patty Murray (D-WA), chair of the Senate Budget Committee, and Congressman Paul Ryan (R-WI), chair of the House Budget Committee, have been negotiating a package behind closed doors.

Because Republicans refuse to require millionaires and billionaires to pay a single additional penny towards the common good, federal employees -- a group that has already sacrificed more to deficit reduction than any other group -- will reportedly be forced to sacrifice even more.

In light of concerns about income inequality, it is aggravating that politicians are going after middle class workers while imposing not a penny of costs on the wealthiest among us. But it's even worse. They are going after compensation those workers have already earned. They are going after their pensions.

The budget package reportedly includes $20 billion of pension savings. But like Social Security, federal and other employer-sponsored pensions are earned benefits, not gifts or handouts. They are part of a compensation package, often explicitly negotiated for in exchange for reduced current pay. Making pension benefits less generous or more expensive with respect to work already performed is taking away compensation that has already been earned!

In 1974, Congress enacted the Employee Retirement Income Security Act (ERISA) in an effort to safeguard pension benefits earned by private-sector employees. ERISA is intended to, among other things, prevent those in charge of company pension plans from raiding pension funds or misusing their authority in other harmful ways. Those statutory safeguards are backed up by personal liability and even criminal penalties. Who would have guessed, back in 1974, that federal workers would need that kind of protection from their employer?

This is not just an issue for those directly affected; it is an issue that should concern all of us. The contemplated cutbacks raise significant concerns about fairness and reneging on agreements, especially alarming when engaged in by our government. Furthermore, in setting federal pay and benefits, the government should look toward attracting the best workforce possible, not reducing the deficit by unfairly targeting its own employees. The work our civil servants perform is crucially important to all of us. In addition, and perhaps most directly affecting the rest of us, Congress appears to be on the threshold of establishing a precedent that has wide-ranging implications.

One of the changes that reportedly will be in the package is familiar to those who follow closely the debate over Social Security. It is to switch to the so-called Chained CPI for the purpose of measuring cost of living. This is an especially cruel and poorly targeted cut. Because the cut compounds over time, it would fall heaviest on the oldest of the old, the poorest of the poor, and those disabled at the youngest ages. (More information on the Chained CPI can be found here.)

Thwarted so far in the effort to enact this disastrous policy government-wide -- for Social Security, veterans', military, and other federal benefits -- Congress may now be attempting a divide and conquer strategy. Start with federal employees, and then incrementally impose the Chained-CPI on everyone else. But if it is bad policy for veterans and Social Security beneficiaries, it is also bad policy for federal retirees (most of whom also receive Social Security, and many of whom are veterans).

Those who oppose the Chained CPI for Social Security should reject this and the other proposals aimed at reducing the compensation of federal workers. Members of Congress need to hear from their constituents that the time has come to stop taking from civil servants and other working- and middle-class Americans in order to protect the wealthiest among us. If our elected officials do not hear from enough of us, our benefits may be next.