With both normal budgetary debates and the debt ceiling crisis on the horizon, here’s how federal employee benefits and agency spending could be affected.
The White House Budget is release annually and acts as a starting point for Congressional debates over the Government’s budget. Think of the budget recommendations as a wish list for the current administration. Since the House of Representatives has a small GOP majority, this may leave more room for debate than in 2021 and 2022. In addition to the usual fiscal decisions hammered out by Congress, there’s also the matter of the debt ceiling, which will need to be raised by the summer before the country goes into default on its debt.
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Here’s a look at how federal employee benefits and agency spending will act as bargaining chips in both of these contentious matters.
The White House Budget
The administration is expected to publish its recommended budget around mid-March. Contained in the publication, we can anticipate to find what the President wishes the following year’s annual pay raise for Feds should be. While Democrats in Congress have already pushed for an 8.7% raise in the FAIR Act, the Biden Administration has previously arrived at its suggestion by following the formula laid out in laws surrounding salaries for the federal workforce – which would mean a 5.2% raise for 2024. While in the first two years of Biden’s presidency, there was no countermeasure proposed in budgetary talks, leaving the White House’s figure as the default, the GOP-led House might change things and push for an even lower raise this time around.
Outside of the debt ceiling debate, Republican representatives have also indicated that they will push for the following changes to federal employee benefits:
- Raising the amount FERS employees contribute to their pension while also reducing the value of their FERS annuity in retirement.
- Reducing government contributions to FEHB premiums, which in turn would increase the amount participants have to pay.
- Eliminating the vaccine mandate, which has been on hold via court order since early last year.
- Reducing telework for federal employees (although I’m not sure how this one is supposed to reduce the government’s budget)
The Debt Ceiling Debacle
Regarding the debt ceiling, Republicans are using their small majority in the House to try and push for other matters regarding government spending. To compromise and raise the debt limit, the GOP representatives want something in return and have thus expressed interest in items such as installing work requirements for food stamps (SNAP) and ending legal assistance for migrants. Additionally, the following measures would impact federal workers directly:
- Ending student loan pause, gradually cancelling the Public Service Loan Forgiveness program, and reversing the Biden Administration’s executive order to forgive up to $20,000 of federal loans per individual.
- Cancelling several EPA initiatives.
- Reducing the purchases of green vehicles for federal government use.
While the House speaker has made it clear that cuts to Social Security and Medicare are not on the table, Senators such as Republican Rick Scott of Florida have explicitly expressed interest in such cuts.
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Until Next Time,
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