Senate strips most retirement cuts from reconciliation, but anti-civil service provisions remain

This story has been updated at 5:08 ET.

An initial draft of the Senate Republicans’ version of the budget reconciliation package does away with several provisions that would have reduced federal workers’ retirement benefits but significantly increases the burden on new hires.

On Thursday night, the Senate Homeland Security and Governmental Affairs Committee published its portion of the budget reconciliation bill, which aims to cut federal spending to partially pay for tax cuts for the wealthy and increased immigration enforcement.

Gone from the bill are House-passed provisions that would require all federal workers to contribute 4.4% of their basic pay toward the Federal Employees Retirement System, reduce their FERS benefit calculation from the average highest three years of salary to the highest five years, and eliminate the FERS supplement for employees who retire before Social Security kicks in at age 62.

But in their place is a more draconian iteration of the controversial plan to force future federal workers to choose between a more expensive defined benefit annuity and at-will employment, meaning they can be fired “for good cause, bad cause, or no cause at all.” Under the Senate plan, all new federal hires would pay more than double toward FERS compared to feds hired after 2014—9.4% of their basic pay—and those who elect to accrue civil service protections would pay an additional 5 percentage points on top of that, or 14.4% of basic pay.

Also still in the bill are provisions requiring federal workers to pay a $350 filing fee to challenge an adverse personnel action before the Merit Systems Protection Board, as well as a requirement that the Office of Personnel Management conduct an audit of the Federal Employees Health Benefits Program for beneficiaries that are no longer eligible.

Additionally, the bill ramps up attacks on federal employee unions, requiring federal agencies to charge a 10% fee on automatic union dues payroll deductions as well as requiring labor groups to pay rent on office space and other use of agency property.

John Hatton, staff vice president for policy and programs at the National Active and Retired Federal Employees Association, said that while his organization welcomes the removal of provisions that would have cut current federal workers’ retirement benefits, including for many whose pensions had already vested, the new proposal is just as dangerous.

“The level that new hires pay into this system would be incredibly high that it potentially leads to an undermining of the entire system and whether it’s a valuable benefit,” he said. “The tradeoff from what you’re paying in and what you’re getting back on the back end, are you really even getting a bang for your buck based on the government’s contributions? And if you’re taking so much of out of your pay to begin with, you might not have much left to put into the Thrift Savings Plan, undermining that leg [of the retirement stool] as well.”

In a statement, American Federation of Government Employees National President Everett Kelley blasted the measure as another effort to penalize government employees and their unions.

“This so-called reconciliation bill is in fact a big retaliation bill—retaliation against AFGE and other unions for successfully standing up for our members and fighting this administration’s illegal attempts to obliterate our federal agencies and the patriotic civil servants who run our federal programs,” he said. “These provisions represent a direct assault on federal employees and their labor unions and will make it that much harder for federal agencies to recruit and retain the qualified employees they desperately need to serve the American public.”

And National Treasury Employees Union National President Doreen Greenwald described the proposed cuts as "gouging' civil servants.

"These proposals would slash the take-home pay for newly hired civil servants without any corresponding increase in their retirement benefits, making it even harder for the federal government to compete for skilled employees in the face of higher private sector salaries," she said. "Not satisfied with imposing new financial burdens on federal employees, their families, and charities across the country, the bill also targets employees' unions and workplace rights. Proposals to start charging federal employee unions simply for existing in the workplace is punitive and a form of union-busting that should be rejected. This vision for the future of the federal government is one where employees have little-to-no rights, don't earn enough to survive, and can see their jobs vanish with no warning. It's wrong, cruel, and should be renounced by the Senate."