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NARFE President Reacts to President Obama’s FY15 Budget

FOR IMMEDIATE RELEASE   Contact: Jessica Klement
 March 4, 2014 703-838-7760
  jklement@narfe.org

Alexandria, VA – Today, President Obama sent Congress parts of his fiscal year (FY) 2015 budget. Joseph A. Beaudoin, president of the National Active and Retired Federal Employees Association (NARFE), released the following statement:

“Past budgets from President Obama included an increase in retirement contributions for current federal employees. NARFE is pleased to see that the President adhered to a promise made at the end of last year to exclude this tax on feds in the budget released today. Federal employees have contributed over $119 billion toward deficit reduction in recent years. It’s time the President and Congress stop coming back to the federal employee piggy bank for savings. This is the first step in reversing this trend, and we hope this provision remains excluded when the rest of the budget is released next week.

“While the budget proposes a 1 percent pay raise for federal employees, the figure is half the amount that private-sector wages rose in the last year. Now that our country is back on stronger economic footing, it is time to start closing the growing gap between public- and private-sector wages. That gap now stands at over 35 percent. The effects of the past three years of financial hardship have left their mark on federal workers, to the extent that half the federal workforce reportedly is exploring other career options.

“Any good employer knows you need competitive wages to retain the best and the brightest. NARFE urges Congress to appropriate a raise that would allow the government to be competitive in the hiring process and keep pace with the private sector.

“With the long-anticipated retirement wave taking hold, now is not the time to make public service less attractive to potential employees. The President’s budget makes a commitment to a governmentwide training program but should go further, ensuring adequate succession planning across the government.

“Unlike his FY14 budget, the President’s FY15 budget no longer includes a move to the Chained CPI. Our nation’s seniors, veterans and federal retirees do not deserve to be pawns in the budget game. This flawed proposal should be taken off the table once and for all.”

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By way of background, the Employment Cost Index (ECI), on which the annual raise is usually based, was 1.9 percent for the 12-month period ending September 2013. (The ECI measures the increase in employment costs in the private sector.) While federal employees were provided a 1 percent pay raise this year, the ECI rose 1.8 percent in the previous year. According to the Federal Salary Council, the pay gap between private- and public-sector employees is now 35 percent. Due to the pay freeze alone, federal workers have sacrificed $98 billion for deficit reduction. Over the last four years, the cost of goods and services has increased by 7 percent, and the wages and salaries of private-sector workers have increased by 6.5 percent, according to the Bureau of Labor Statistics.

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The National Active and Retired Federal Employees Association (NARFE), one of America’s oldest and largest associations, was founded in 1921 with the mission of protecting the earned rights and benefits of America’s active and retired federal workers. The largest federal employee/retiree organization, NARFE represents the retirement interests of nearly five million current and future federal annuitants, spouses and survivors