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Trump’s budget request slashes retirement benefits for 2 million federal workers

Each federal worker would lose about $75,000 in retirement savings.

Furloughed federal workers and those aligned with them protest the partial government shutdown in the Hart Senate Office Building January 23, 2019 in Washington, DC. Members of the National Federation of Federal Employees, the American Federation of Gover
Furloughed federal workers and contract workers protest the partial government shutdown in the Hart Senate Office Building on January 23, 2019, in Washington, DC.
Win McNamee/Getty Images

President Donald Trump’s grand vision for America in 2020 can be summarized this way: spend billions more dollars on the US military and immigration enforcement; cut billions of dollars from the social safety net. And do nothing to close the $1 trillion deficit Republicans created with their 2017 corporate tax cuts.

The president’s 2020 budget proposal, which he released Monday, managed to anger everyone from retirees to childhood cancer researchers. It also angered millions of federal employees and retired government workers, who would see their pensions cut under the president’s budget request.

Randy Erwin, president of the National Federation of Federal Employees labor union (NFFE), blamed Trump for trying to make federal workers pay for the 2017 tax cuts, which disproportionately benefited the wealthiest Americans.

“President Trump again sacrifices the middle-class families on behalf of the wealthy through his proposed pay freeze and needless cuts to earned benefits for federal workers,” Erwin said in a statement released Monday. “We saw during the 35-day shutdown earlier this year that many federal workers live paycheck to paycheck.”

The proposal would cancel cost-of-living increases to pension income for retirees in one program, and would lower the annual adjustment to another pension program by 0.5 percent. The budget also scraps certain retirement benefits for employees who stop working before they are eligible for Social Security.

Current federal employees would also end up paying more for their retirement benefits, without getting anything in return.

All in all, the president wants to cut $148.9 billion from employee pensions in the next decade — roughly $75,000 per federal worker, according to NFFE. And it’s not a small workforce, either: The US government is the largest employer in the country, with 2.1 million civilian employees. The vast majority of them live outside the Washington, DC, area.

It’s unlikely that Trump will persuade Congress to pass his version of the budget, especially with the new Democratic majority in the House. He was unable to scale back retirement benefits for federal workers last year, even with Republicans in control of both legislative chambers. But his latest budget request reflects his growing hostility toward the federal workforce he oversees — a relationship that nearly reached a breaking point during the 35-day partial government shutdown that ended in January.

Trump doesn’t want federal workers to get annual raises

Trump has tried many things to keep civilian government employees from getting annual raises since he took office.

He first announced the across-the-board pay freeze in August, saying the federal government couldn’t afford the automatic 2.1 percent pay bump employees were supposed to get in 2019.

Trump’s decision was swiftly met with widespread criticism from labor unions that represent federal workers, calling it “a slap in the face.”

The president is allowed to cancel raises in the event of a “national emergency or serious economic conditions affecting the general welfare,” and past presidents have eased up on scheduled raises for federal workers. President Barack Obama, for example, issued a two-year federal pay freeze in 2010 in response to the financial crash. And in 2012 and 2013, House Republicans stepped in to freeze pay for both federal workers and congressional staff.

But with today’s expanding economy, it’s hard to justify withholding raises from 2 million government workers, most of whom live outside of the nation’s capital. But Trump tried anyway.

In a letter he sent to Congress over the summer, he said the raises were “inappropriate” in light of the government’s fiscal crisis, which includes a $1 trillion budget deficit. He said employees should only get raises based on performance and merit, disregarding increases in cost of living or other factors.

“We must maintain efforts to put our Nation on a fiscally sustainable course, and Federal agency budgets cannot sustain such increases,” Trump wrote. The letter made no mention of the 2017 Republican tax bill, which slashed corporate tax rates and blew a hole in the federal budget.

Trump officially canceled the pay raises in December — just days after he shut down the government and withheld paychecks for nearly 800,000 employees. That included Border Patrol agents and Immigration and Customs Enforcement agents.

Trump’s later decision to reopen the government for three weeks — without funding for a border wall — did not include a raise.

Members of Congress, though, tried to override his decision.

In January, the House passed a bill that would give civilian workers a 2.6 percent cost-of-living increase for 2019. Senate Democrats introduced their own version of the bill calling for the 2.6 percent raise, which would match the increase given to military service members. But Senate Majority Leader Mitch McConnell never brought it to the floor for a vote.

A few weeks later, both chambers agreed to give federal employees a 1.9 percent pay raise, adding it to the 2019 spending bill that Trump signed in February (the workers are still waiting to get it).

Now Trump is hoping to save money by scaling back retirement benefits for the federal workforce too. But he can’t do that without Congress’s approval, and budget negotiations are starting to heat up.

In the next few weeks, lawmakers will have to reach a new deal over budget caps to prevent automatic spending cuts, because of a sequestration policy that Obama negotiated with Republicans in 2011. The government recently surpassed the federal debt ceiling, which limits how much money the government can borrow, but the Treasury Department used extraordinary measures to buy Congress more time to make a deal.

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