The Ghost of Budgets Past: President Trump’s FY21 Budget Cuts Continue Efforts to Attack, Undermine Strength of Civil Service

Alexandria, Va. – In response to President Trump’s fiscal year 2021 (FY21) budget proposal to Congress, which contains cuts to earned federal retirement and health care benefits, NARFE National President Ken Thomas issued the following statement:

“The very people whom President Trump praised in December for their devotion, vigilant efforts and contributions now face a bleak financial future as the president once again proposes substantial cuts and insufficient advances to civil servants’ earned pay and benefits in his FY21 budget request. Specifically, the administration’s proposed pay raise of 1.0 percent fails to keep pace with private-sector increases and the raise allotted to military members. Additionally, its insistence on pursuing the elimination of the Office of Personnel Management (OPM), even after Congress has prohibited it from doing so, is a clear waste of time and blatant disregard for resources that could be directed toward identifying realistic and feasible improvements to OPM operations.

“At a time when the federal government faces ominous recruitment and retention challenges, the president’s FY21 budget continues to shortchange and renege on previous commitments to federal employees and retirees. These contemptible recommendations do nothing more than undermine the strength of our resilient civil service, and I urge Congress to reject it outright.”

Background

The administration’s FY21 budget includes a 1.0 percent pay raise for federal employees. While NARFE appreciates that this is a departure from previous pay freeze proposals, the proposed 1.0 percent raise fails to keep pace with private-sector increases and the raise allotted to the military in the president’s budget. NARFE urges Congress to appropriate a federal pay raise of at least 3.0 percent in 2021 to keep federal wage increases on par with their private-sector counterparts.

NARFE objects to the following FY21 budget proposals, which account for more than $179.7 billion in cuts to earned federal benefits:

•    Eliminating cost-of-living adjustments (COLAs) for current and future retirees of the Federal Employees Retirement System (FERS) and reducing COLAs for retirees of the Civil Service Retirement System (CSRS) by 0.5 percent each year from what the COLA would have been otherwise. Together, this would cost federal retirees $53.6 billion over 10 years.
•    Increasing FERS employees’ contributions to their annuities by one percent each year for the next six years without any corresponding benefit increase. This will cost FERS employees $87.4 billion over the next 10 years.
•    Eliminating the FERS annuity supplement for new retirees. This benefit, provided to FERS employees who retire before they are eligible to collect Social Security, would hit those with a mandatory retirement age – such as federal law enforcement officers and air traffic controllers – the hardest, costing federal retirees $19.9 billion over the next 10 years.
•    Reducing the rate of return on the Thrift Savings Plan’s Government Securities Investment (G) Fund. This would cost federal employees and retirees, as well as military personnel and veterans, $10.5 billion over the next 10 years.
•    Calculating new retiree pensions based on the average of the highest five years of salary instead of the highest three. This would cost federal retirees $8 billion over the next 10 years.
•    Reducing working and retirement-age benefits for federal workers disabled as a result of their service, costing them $212 million over 10 years.

The plan also issues a joint budget request for OPM and the GSA, indicating that the administration continues to pursue its proposed reorganization of OPM. It does so in spite of the fact that the National Defense Authorization Act (NDAA), which was passed and signed into law in December, explicitly blocked the OPM reorganization plan from advancing at least until 180 days after the National Academy of Public Administration (NAPA) issues a study detailing the challenges facing OPM and recommending solutions.

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As the only organization solely dedicated to the general welfare of all federal workers and retirees, NARFE delivers valuable guidance, timely resources and powerful advocacy. For nearly a century, NARFE has been a trusted source of knowledge for the federal community, Capitol Hill, the executive branch and the media.

CONTACT:
Jill Talley
NARFE Director of Public Relations
jtalley@narfe.org
(703)838-7760