UPDATE: Congress passes bill hiking future feds' pension contributions


UPDATED: As expected, the bill extending the payroll tax cut and unemployment insurance easily passed Congress today. Federal unions, employee groups, and fed-friendly lawmakers are enraged, however, because the bill would drastically hike future feds’ pension contributions from 0.8 percent to 3.1 percent.

The bill would also make future lawmakers and their staffs receive the same pension rate as everyday feds. But Rep. Dennis Ross, R-Fla., who has been pushing hard to cut Congress’ more-generous pensions and increase feds’ retirement contributions, voted against the bill. Said Ross:

We should stop congressional pension perks because it is the right thing to do, not to pay for something else. We should require federal workers to join the rest of America and actually pay something for their pensions because it is the right thing to do, not to pay for something else.

The House this morning approved it 293 to 132, and the Senate soon followed, passing it 60 to 36. It now heads to President Obama for his signature.


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  1. What individuals like Rep. Ross who go on about how good Federal employee have it fail to see is that it, in many cases is a trade off. The CBO report, as has been addressed in a number of articles, is overly broad and doesn’t address the reality of the job situation.

    First, Federal employment is a trade off in many cases. Specifically, it is a trade off between a lower salary (significantly in the case of senior Federal employees) with a better benefits package and job security and a higher salary with perhaps lesser benefits and more volatility. Using myself as an example, my private sector equivalent, with similar education, experience, and professional certifications makes anywhere from $25-$40k more per year in salary than I do, however, yes my benefits are better in some ways.

    Second, Federal employees are tax payers too. As with many tax paying Americans, Federal employees already work for no compensation for roughly 3 months out of the year. However, unlike private sector employees, Federal employees are also paying themselves with their own tax dollars. So, I pay taxes, and part of those taxes go to pay may salary, and then I am taxed again on taxes I have paid.

    Third, various agency heads, and even Congress, have commented numerous times on how we have a severe shortage in qualified personnel in critical fields such as cybersecurity. There are a finite number of professionals and government is competing with industry. How can we ever hope to hire and retain the proverbial best and brightest when compensation is not on par with the private sector for these fields.

    What Congress needs to do is look at their own gross mismanagement of our exisiting tax dollars and stop coming up with new ways to spend money. Republicans wanted to use Federal employee salary “savings” to pay for highway improvements? Really? How about the taxes that are already collected for those purposes? What are they being used for? How about getting back the $17 billion in overpaid unemployment benefits in 2010, or the $100’s millions thrown down the toilet for Solyndra and other companies. I’m sure those funds would help fix a pothole or two.

  2. Every federal employee should be outraged that the Congress, rather than having the courage to cut spending, is funding programs off the backs of federal employees. Watch out because this is just the beginning. Federal employees are likely to see continue pay freezes and additional pension contributions. Given that employees now have to pay a greater amount in contributions, it’s time to research the contribution versus the return relative to other governmental entities across the country. At 3.1%, the 1% year might no longer be such a great deal. This does nothing to encourage talented young people to work for government. The future is bleak.

  3. Dennis Ross seems to forget that federal employees already pay the full cost of their pensions in the form of a reduced salary to start with.

    Many professional workers in the private sector who have no defined pension have far higher salaries instead. Their 401Ks are often times matched by their employer in a more generous manner than the government. (up to an 8% match or in some cases, a 2 for one match up to 3%). Health care benefits are another matter. I know several colleagues who pay nothing for their health insurance premiums-their employer pays the whole amount.

    If the congress feels the cost of the federal payroll is too high, they ought to take the bull by the horns and decide what functions the federal government should cease–and reduce the workforce accordingly. Somehow, I think they would be far too cowardly for such bold action.

  4. How’s this – Rep Ross gets $174,000/year plus benefits. Taxpayers paid $973,361 in salary for his staff (they’re allowed 18 staffers), don’t know about their benefits. Speaker, whips, leaders get more. Taking the base of $174,000 times 435 members of Congress = $75,690,000 per year. If each had 18 staffers, the American taxpayer is putting out $391,500,000 per year. Since they are unable to perform the duties that the taxpayers sent them to do – Cut their salaries by half, eliminate half of their allowable staffers, and put them based on performance. They do their jobs well, they get a $500-$1,000 bonus, if they don’t do their jobs they have to submit a performance improvement plan (PIP). They pushed for the PIP for federal employees – they should lead by example. Congressmen/women and their staffs should not be allowed the perks of lobbyists or entities for which they can benefit financially. Eliminate the truly free ride our congresspeople have at the expense of the citizens of this country. Ultimately, this country may be better off to vote in a part time Congress, with the accompanying part time pay. They currently get full time pay, and don’t get anything done no matter who has control.

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