Blog - Page 17 of 71

2024 RSC Budget Would Slash Federal Employee Pay, Benefits

June 20, 2023/in Blog/by Karen Dzierzynski

The 2024 Republican Study Committee (RSC) budget blueprint proposes substantial cuts to federal employees’ pay and benefits.

The fiscal year 2024 budget from the Republican Study Committee (RSC) would make drastic reductions to the pay and benefits of federal employees.

Among the proposed changes to federal employees’ pay and benefits are:

Reforming paid leave policies to match the value of private sector benefits
Ending automatic pay raises for federal employees
Restrictions on bonuses paid to federal employees
Elimination of pensions for newly hired federal employees
Changing from a high-three to a high-five pension calculation for current federal employees
Moving to a voucher system for FEHB premiums

Reforms to Federal Employee Pay

The 2024 RSC budget notes that the compensation system currently used for federal employees “largely ignores the more efficient compensation approach used in the private sector.”

Furthermore, it points to a 2017 report from the Congressional Budget Office which found that federal employees earn, on average, 17% more than their private sector counterparts.

Consequently, the 2024 RSC budget proposes the following reforms to federal employee pay. Click HERE to read more.

US Capital Sputters As Federal Workers Stay Home

June 12, 2023/in Blog/by Karen Dzierzynski

Washington’s role as the US capital makes it reliant on government workers for its economic success — and many are choosing to stay home, perhaps for good, leaving vast federal offices empty and the city struggling.

From restaurants hosting federal lobbyists to world-class cultural centers, the city’s fortunes have long been tied to the government employees who operate the machinery of the state.

Now, more than three years after the Covid-19 pandemic forced the United States government to rely on telework, long-term remote work is having painful consequences for the local economy.

Washington’s workers are coming into the office less than half what they were before the pandemic, according to Kastle, which manages entry badges for 40,000 companies across the country.

“The DC office market is dying,” Chris LeBarton, director of market analytics at the real estate data company CoStar told AFP in an interview at the company’s offices downtown.

“If you can’t get the federal government back to Washington, DC, even at three days a week, good luck,” he said.

“Because the rest of this, largely, is offshoots of that,” he added, waving at the city around him.

– ‘Economic engine’ falters –

While many federal employees relish working from home, the impact on the city’s commercial real estate sector — also hit by a toxic combination of high interest rates and tighter bank lending — has been severe.

The federal government occupies almost a quarter of commercial property in the downtown area, historically the “economic engine” of the city, the Office of the Deputy Mayor for Planning and Economic Development (DMPED) told AFP by email. Click HERE to read more.

DoD Identifies 23,000 Employees with Pension Errors

June 12, 2023/in Blog/by Karen Dzierzynski

The Department of Defense recently began notifying more than 23,000 employees that they have been receiving either an overpayment or underpayment of their salary due to calculation errors in their pension contributions.

All of the affected employees are under the Federal Employees Retirement System (FERS). More than 8,400 affected employees work for the Army, nearly 6,000 work for the Air Force, and more than 5,600 work for the Navy. Another 2,100 are at the Defense Logistics Agency, while 825 employees were affected at the Defense Finance and Accounting Service. The rest work for the Washington Headquarters Service or other DoD components.

Employees are being notified by their respective agencies if they are entitled to a reimbursement because of overpayments or if they owe money due to underpayments. The amount of money owed ranges from a couple hundred dollars to more than $10,000.

Employees who have been inadvertently underpaying into their pensions can submit a waiver requesting forgiveness for the amount owed or an extension of time in which to pay back the debt. Instructions for completing the waivers are included in the letters employees are receiving.

The calculation errors resulted from two changes in pension contribution rates for FERS employees that were made by Congress in 2012 and 2014. Due to no fault of employees, DoD agencies assigned some employees to the incorrect FERS retirement plan, resulting in erroneous contribution rates.

The Navy first discovered the coding errors last year, which triggered a departmentwide review by the Defense Civilian Personnel Advisory Service. DCPAS identified 23,175 employees across DoD with inaccurate calculations. Click here for the DCPAS PowerPoint presentation.

According to DCPAS, employees who have retired during the period in which the calculation errors were made are not affected because their pensions were adjusted at the time of retirement.

Citation: AFGE June 12, 2023

Explainer-What Is the U.S. Debt Ceiling?

June 1, 2023/in Blog/by Karen Dzierzynski

WASHINGTON (Reuters) – The U.S. is rapidly approaching the deadline for Congress to pass a deal, reached over the weekend by Democratic President Joe Biden and top congressional Republican Kevin McCarthy, to suspend the government’s $31.4 trillion debt ceiling or risk a catastrophic default.

WHEN WAS THE DEBT CEILING REACHED?

Washington regularly sets a limit on federal borrowing. Currently, the ceiling is roughly equal to 120% of the country’s annual economic output. The debt reached that ceiling in January and the Treasury Department has kept obligations just within the limit by suspending investments in some federal pension funds while continuing to borrow from investors.

The Treasury on Friday warned that it could run out of room under the limit as soon as June 5, a few days later than its earlier June 1 forecast.

Because the Treasury borrows close to 20 cents for every dollar it spends, Washington at that point would start missing payments owed to lenders, citizens or both.

IS THE DEBT CEILING GOOD FOR ANYTHING?

Few counties in the world have debt ceiling laws and Washington’s periodic lifting of the borrowing limit merely allows it to pay for spending Congress has already authorized.

Treasury Secretary Janet Yellen and other policy experts have called on Washington to eliminate the limit, because it amounts to a bureaucratic stamp on decisions already made.

Some analysts have proposed that the Treasury can bypass the crisis by minting a multitrillion-dollar platinum coin and putting it in the government’s account, an idea widely seen as an outlandish gimmick. Others argue the debt ceiling itself violates the U.S. Constitution. But if the Biden administration invoked that argument, which involves the 14th Amendment, a legal challenge would follow.

The White House has dismissed both ideas as impracticable at this stage.

WHAT HAPPENS WHEN WASHINGTON CAN NO LONGER BORROW MONEY?

Shockwaves would ripple through global financial markets as investors questioned the value of U.S. bonds, which are seen as among the safest investments and serve as building blocks for the world’s financial system.

The U.S. economy would almost certainly fall into a recession if the government was forced to miss payments on things like soldiers’ salaries or Social Security benefits for the elderly. Economists expect that millions of Americans would lose their jobs. Ratings agencies have warned they could downgrade the U.S.’s sovereign credit rating — as occurred in a prior 2011 showdown — and investors have shunned some U.S. debt securities that come due in the coming weeks as they try to avoid bills maturing when the risk of a debt default is highest.

HOW DID WE GET HERE?

Republicans, who hold a narrow 222-213 majority in the House of Representatives, in late April passed a bill that would raise the debt limit but also set in place sweeping spending cuts over the next decade.

The bill has no chance of approval in the Democratic-controlled U.S. Senate. McCarthy and Biden over the weekend agreed on a tentative deal to suspend the borrowing limit for two years and cap spending, but they face objections from the most partisan lawmakers in each party.

HAVEN’T WE HEARD THIS SONG BEFORE?

This kind of brinkmanship has been part of U.S. politics for decades but worsened significantly after fiscal hawks in the Republican Party grew in power since 2010.

In a 2011 showdown, House Republicans successfully used the debt ceiling to extract sharp limits on discretionary spending from Democratic President Barack Obama.

Spending caps stayed in place for most of the rest of the decade, but the episode rattled investors and led to a historic downgrade of the U.S. credit rating.

Citation: Reuters- May 29, 2023

TSP Millionaire Count Continues Recovery

May 31, 2023/in Blog/by Karen Dzierzynski

The count of TSP millionaires continued to recover in the first three months of this year, although it remains below the level of 12 months before and well below the peak at year-end 2021.

The count stood at just above 88,000 as of March 31, up from just under 77,000 at year-end 2022 (the TSP made some revisions to the previously reported figures for that count), but about 12,000 below the count of 12 months prior and down about 25,000 from the nearly 113,000 high at year-end 2021.

As of the end of March there were about 93,000 investors with accounts between $750,000 and $1 million and about 206,000 with accounts between $500,000 and $750,000. That’s up from about 88,000 and about 198,000 for the three months but still below the 99,000 and 212,000 of 12 months prior.

The largest account balance was just under $7.2 million; the largest balance as of year-end 2022 was just under $6.9 million while the figure for 12 months prior was $8.4 million—presumably, but not necessarily, the same person.

Citation: FEDweek May 30, 2023