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NEWS:

NARFE Legislative Hotline, March 27, 2015

Message From NARFE President Richard G. Thissen

“This week, both the House and Senate approved budgets that ask for disproportionate sacrifice from a federal workforce that has already contributed more than $120 billion toward deficit reduction. If enacted into law, the policies put forth by each budget would degrade substantially our nation’s ability to recruit and retain the highly qualified people necessary to ensure effective government. Each budget would also undermine the promise of affordable health benefits for federal retirees, earned throughout careers of service. With your help, NARFE will continue to fight to make sure these proposals do not become law.”

House Passes Budget Attacking Federal Workforce

On Wednesday, March 25, the House of Representatives passed its Fiscal Year 2016 Budget Resolution, H.Con.Res.27, by a vote of 228-199. The budget assumes $318 billion in savings from federal and postal employees and retirees. Specifically, the House budget proposed the following:

  • An increase in retirement contributions for all current federal employees of roughly 6 percent;

  • A 10 percent reduction of the federal civilian workforce through attrition, whereby one employee would be hired for every three who leave government service;

  • A decrease in the rate of return on the Thrift Savings Plan’s Government Securities Fund (G Fund);

  • Increasing some federal retirees’ share of their health insurance premiums by basing the government contribution on their years of service;

  • Increasing employees’ Federal Employees Health Benefits Program (FEHBP) premiums by tying the government’s employer contribution to inflation, rather than the average cost of the plans;

  • Encouraging the total elimination of the Federal Employees Retirement System (FERS);

  • Eliminating the FERS Annuity Supplement; and

  • Increasing postal employees’ share of their FEHBP premiums

Let your representatives know your disappointment in their vote; or thank them for their opposition by sending this letter.

Prior to the vote, NARFE President Thissen wrote a letter to House members, available here, urging them to oppose H.Con.Res.27. Following the vote, NARFE issued a press release, available here, denouncing passage of the budget.

Senate Passes Budget Targeting Federal Workforce

Early Friday morning, March 27, the Senate passed its Fiscal Year 2016 Budget Resolution, S.Con.Res.11, by a vote of 52-46.

The budget resolution assumes $170 billion in “savings” from federal employees and retirees. Specifically, it assumes budget savings from the elimination of federal jobs, a 6 percent federal employee pay cut resulting from increased retirement contributions without any corresponding benefit increase, and an increase in health care costs for federal employees and retirees resulting from reduced employer contributions to Federal Employees Health Benefits Program (FEHBP) premiums.

President Thissen wrote to senators urging them to vote against the budget resolution. Join him in letting your senators know your disappointment in their vote; or thank them for their opposition by sending this letter.

Bipartisan “Doc Fix” Compromise Passes in House

On Thursday, March 26, the House passed a bill, H.R.2, by a vote of 392-37, to permanently repeal and replace the Medicare “sustainable growth rate” (“SGR”) formula, which determines how much doctors are reimbursed for providing care to patients covered by Medicare. Under the SGR formula, doctors would be faced with a 21 percent cut in payments for treating Medicare patients, which could lead doctors to refuse to accept those patients. However, since 2003, Congress has passed a short-term “doc fix” 17 times to prevent those payment cuts from going into effect. H.R.2 would permanently repeal the SGR formula, avoiding those “doc fixes,” providing modest, 0.5 percent increases in payments for the next four years, and transitioning to a performance-based payment formula.

To partially offset the cost of repealing the SGR formula, the bill would increase premiums for higher-income Part B and Part D participants, starting in 2018. Premiums would increase by up to 15 percent for individuals with income above $133,500 ($267,000 for a couple). It also would prohibit private “Medigap” plans from covering the Part B deductible for new beneficiaries, starting in 2020.

The Senate is expected to consider the House-passed bill when it returns from a two-week recess.

House Committee Approves Bill to Fire Tax Delinquent Feds

On Wednesday, March 25, the House Oversight and Government Reform Committee approved H.R. 1563, the Federal Employee Tax Accountability Act, introduced by Committee Chairman Jason Chaffetz, R-UT. The bill would allow agencies to fire or deny employment to federal employees or prospective hires who are delinquent in paying their federal taxes.

NARFE opposes the bill as an unnecessary attack on the federal workforce. About 97 percent of federal workers pay their taxes, compared to a 91 percent compliance rate for the general public. Furthermore, processes already exist to collect unpaid taxes from federal employees, including wage garnishment and the Federal Payment Levy Program.

Annual OPM Call Letter to FEHBP Requires Equal or Lower Rates for “Self Plus One” Option

Federal employees and retirees covering only two individuals in a self and family plan under FEHBP should be able to reduce their health insurance premiums beginning in 2016 by switching to self plus one coverage. In its annual “call letter” to FEHBP plans, OPM set its requirements for new self plus one enrollment types. Notably, OPM expects self plus one rates to be lower than self and family rates, and in no event can they be higher. Furthermore, catastrophic limits and deductibles must be less than or equal to those in self and family plans. Copays and coinsurance amounts cannot vary by enrollment type. In other words, lower premiums cannot be offset by higher out-of-pocket costs.

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NARFE Legislative Hotline, March 20, 2015

Message From NARFE President Richard G. Thissen

“It was an honor to preside over the 14th Biennial NARFE Legislative Training Conference this week. Many of the 250 NARFE members who attended from across the country called this the ‘best conference ever.’ Conference attendees stormed Capitol Hill on Tuesday to discuss NARFE’s top priorities amidst a contentious budget process that aims to take more from the federal community. To all of those who attended, I say, ‘THANK YOU!’ The work doesn’t stop here. I hope you share what you learned with your NARFE federations and chapters.”

House and Senate Budgets Released

The House and Senate Budget Committees released their budget plans this week. The question of how the budget will affect the federal community is on everyone’s mind.

The $3.8 trillion House budget released by Committee Chairman Tom Price, R-GA, called for an increase in retirement contributions by federal employees, but no percentage increase was specified. No figures pertaining to a pay raise for federal employees for 2016 have been released either, although the President’s budget proposed a raise of 1.3 percent. The resolution passed committee yesterday, and more information can be found here.

The Senate budget released by Chairman Michael B. Enzi, R-WY, proposes a plan that would save $170 billion over the next 10 years at the expense of the federal workforce, according to media reports. However, the blueprint remains vague on specifics. In line with the House budget, the Senate budget calls for increased pension contributions for current federal employees. This comes after Congress already has increased the contribution level for new hires twice in recent years. The Senate budget also would make changes to the Federal Employees Health Benefits Program (FEHBP), and would limit federal hiring, but again, no specifics were mentioned. More information on the Senate budget can be found here.

The House and Senate budget resolutions are guiding documents for the annual appropriations process and are not signed into law by the President. However, both resolutions include reconciliation instructions, which could make massive cuts to mandatory spending programs, including federal employee retirement contributions. Only time will tell how this process will unfold.

2015 NARFE Legislative Training Conference

Thank you and congratulations to the 250 grass-roots activists and leaders who participated in the 2015 NARFE Legislative Training Conference. During the four-day event, participants heard from five members of Congress, received training on NARFE issues and grass-roots advocacy, learned from national speakers and trainers, and networked with leaders from across the country. On Tuesday, participants met with more than 200 members of Congress or staff and shared NARFE’s priorities for the 114th Congress. NARFE members are encouraged to ask participants about their experiences and what they learned. More information will be available in an upcoming issue of narfe magazine.

Rising Inequality Mapped by State

While there has been much discussion of inequality in America, the PEW Charitable Trusts’ “Stateline” used data from the Census Bureau’s American Community Study to map the shrinking middle class. Stateline reports the middle class has shrunk since 2000 in all 50 states and the District of Columbia. In 22 states, middle-class households – defined as those making between two-thirds and twice the state’s median income – fell to less than half of the total households between 2000 and 2013. Questions? Contact NARFE senior analyst Chris Farrell at cfarrell@narfe.org.

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NARFE Legislative Hotline, March 6, 2015

Message From NARFE President Richard G. Thissen

“In the battle to defend federal employees’ pay and benefits, another shot in the 114th Congress was fired this week when a freshman member of the House filed a bill to base federal employee annuities on the highest five years of salary instead of the current highest three years. Yes, the ‘high-three to high-five’ idea has been floated for several years in Washington. And, yes, it is one that we have successfully warded off every time it has been raised. Significantly, however, this is the first time that it has been proposed in a stand-alone piece of legislation. In a statement on the bill, sponsor Rep. Westerman says it ‘ensures that the program employees of the federal government have paid into for their careers is available in retirement and sustainable for future generations.’ I think we can all see through that misleading pronouncement. We will vigorously fight this once again.”

Bill Introduced to Repeal GPO and WEP

The Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP) have an impact on more than two million retirees by taking away their earned Social Security benefits, costing them thousands of dollars of income each year. Recently introduced in the House by Rep. Rodney Davis, R-IL, the Social Security Fairness Act of 2015 (H.R. 973) aims to repeal these two unfair provisions. The GPO prevents retirees who receive a government annuity based on work in non-Social Security-covered employment from collecting full Social Security benefits based on their spouse’s work. The WEP greatly reduces the Social Security benefit of retirees who worked in Social Security-covered employment and who also receive an annuity based on their non-Social Security-covered government jobs. The GPO and WEP penalize individuals who have dedicated their lives to public service. NARFE supports H.R. 973 and the repeal of the GPO and WEP. Now available on the Legislative Action Center is an action letter you can send to your members of Congress, urging them to cosponsor H.R. 973 or thanking them for supporting this legislation.

Bill Introduced to Base Benefits on Highest 5 Years of Salary

Rep. Bruce Westerman, R-AR, introduced H.R. 1230 this week, which would base federal employee annuities on the highest five years of salary instead of the highest three years. According to Westerman, the bill, which would go into effect January 2017, would save the government $3.1 billion dollars over the next 10 years. It would apply to all civilian federal employees, including members of Congress and their staff, who are employed at the time the law goes into effect. NARFE opposes H.R. 1230. You can follow its progress through the bill tracker on the Legislative Action Center.

President Signs Bill Funding DHS through September, Shutdown Avoided

This week, Congress passed, and the President signed, a “clean” bill funding the Department of Homeland Security (DHS) through September 2015, avoiding a threatened DHS shutdown. Prior to the bill's passage, DHS funding was set to expire at midnight tonight, after Congress approved a one-week funding bill late last week. DHS funding has been a source of controversy in Congress because the department is responsible for implementing the majority of the President's executive actions on immigration.

Federal Funds Still 2nd Largest Source of State Budgets

As our nation emerged from the Great Recession, federal dollars made up a bigger proportion of states’ revenue from fiscal year 2009 to 2012 than at any other time in the past 50 years. Pew Charitable Trusts’ Fiscal 50: State Trends and Analysis presents 50-state data on key fiscal, economic, and demographic indicators and analyzes their impact on states’ long-term fiscal health. You can drill down into state finances in five core areas. Want to discuss further? Contact NARFE Senior Analyst Chris Farrell at cfarrell@narfe.org.

No Legislative Hotline Next Week

Since the House is in recess next week, there will be no Legislative Hotline. The following week (March 16-20) is the 14th Biennial NARFE Legislative Training Conference. A Hotline release on March 20 will be dependent on staff availability and news stories of interest.

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