Leaving Feds to Freeze

It's been a tough week for federal employees, given the announcement of an across-the-board pay freeze and a locality pay freeze. As if that wasn't enough, the president's bipartisan deficit commission on Wednesday issued its final report, which recommended freezing federal civilian pay at all agencies and reducing the government workforce by 10 percent.

The commission also proposed changes to the Civil Service Retirement System and the Federal Employees Retirement System by basing retirement benefits on an employee's highest five years of salaries, instead of the current method of using the highest three, and increasing the amount federal workers currently contribute to their pension plans. In addition, the report recommended that cost-of-living adjustments for civilian and military retirees be deferred until they reach age 62.

The Federal Employees Health Benefits Program also would take a hit under the commission's proposal. The report recommended shifting FEHBP to a defined contribution plan where employees would receive a fixed subsidy from government to purchase health insurance coverage from competing insurers.

There have been mixed reviews on the proposal to freeze federal employee pay. Many employees are content with the proposal, with some joining a new Facebook group called It's OK, Freeze My Pay. But cuts to the workforce and to federal benefits may well be another story, as job security, health benefits and a good retirement have long been considered the most attractive aspects to working in government.

Colleen Kelley, president of the National Treasury Employees Union, said Wednesday that such cuts could be detrimental to the government, and warned that approval of the commission's recommendations "would make it impossible to have the kind of workforce the country needs at this critical juncture."

Could the deficit commission's proposals do more harm than good, particularly as the government needs to recruit and retain a host of information technology and cybersecurity workers both now and in the future?