Budget Reductions Aimed at Federal Employees

On March 25, 2024, the Republican Study Committee, led by Rep. Kevin Hern, R-OK, unveiled its fiscal 2025 budget plan, titled “Fiscal Sanity to Save America”. The proposal aims to balance the budget within seven years by slashing $17.1 trillion in spending, which includes substantial reductions to federal workers’ retirement and health care benefits and the elimination of the president’s authority to provide annual pay raises to federal employees.

The committee recommends reducing or eliminating the cost-of-living adjustments (COLAs) for FERS and Civil Service Retirement System (CSRS) annuities, eliminating the Federal Employee Retirement System (FERS) annuity for new hires, computing retirement benefits based on the highest five years of salary rather than the highest three, increasing the share of employee contributions to FERS, eliminating the FERS annuity supplement, and reducing the rate of return on the Thrift Savings Plan’s G Fund to near zero. Their budget also calls for using the chained Consumer Price Index to calculate COLAs for federal annuities and Social Security benefits and requiring federal employees and retirees to pay a greater share of health benefit premiums.

NARFE strongly opposes this plan as it threatens the federal workforce’s stability and effectiveness. This budget plan represents a stark vision for the future of federal employment, sparking a debate over the value and treatment of public servants in the quest for fiscal responsibility.