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NARFE President Reacts to President Obama’s FY16 Budget

FOR IMMEDIATE RELEASE Contact: Jessica Klement
February 2, 2015 703-838-7760
  jklement@narfe.org

Alexandria, VA – President Obama today sent Congress his fiscal year (FY) 2016 budget. Richard G. Thissen, president of the National Active and Retired Federal Employees Association (NARFE), released the following statement:

“While the budget proposes a 1.3 percent pay raise for federal employees, the figure is 1 percent less than 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, which now stands at more than 35 percent. The effects of recent years of financial hardship have left their mark on federal workers, as evidenced by the retirement wave and shrinking numbers of younger workers entering civil service.

“Over the past five years, federal employees’ wages increased 2 percent, while private-sector wages rose 8.3 percent and the cost of living increased 11 percent. This sends a powerful message to job seekers questioning whether a career in the public sector would provide the necessary income to support a family, buy a house and save for the future.

“Any good employer knows you need competitive wages to recruit and 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.

“In a break from recent years, the President’s FY16 budget does not include a switch to the Chained CPI or an increase in retirement contributions for current federal employees. NARFE is pleased that these proposals were not included in this budget, as federal employees have already contributed more than $120 billion toward deficit reduction.”

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By way of background, the Employment Cost Index (ECI), on which the annual raise is usually based, was 2.3 percent for the 12-month period ending September 2014. (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 five years, the cost of goods and services has increased by 11 percent, and the wages and salaries of private-sector workers have increased by 8.3 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 interests of nearly five million current and future federal annuitants, spouses and survivors.