The pay and benefits of federal workers are being scrutinized yet again.
This time the Congressional Budget Office determined cutting them would significantly reduce the government’s annual deficit.
In November, the nonpartisan accounting arm of Congress released a report entitled, “Options for Reducing the Deficit: 2015 to 2024,” which offered 79 recommendations for lawmakers to cut spending or increase revenues.
The CBO suggested that the federal government could save more than $100 billion over the next ten years if it changed federal workers current benefits structure and hiring practices.
Among the cost saving proposals, the CBO said the government would realize a $53.6 billion savings if it cut federal workers’ yearly raises by half a percentage point.
The report also suggested that Congress could significantly cut federal spending if they reduced the “number of federal civilian employees at certain agencies by 10 percent. “ This reduction in federal workforce would be achieved through attrition — agencies would hire only one worker for every three that left.
“About two-thirds of the federal civilian workforce would be exempt … thus limiting the workforce reduction to about 70,000 employees,” the agency noted in the report.
Reducing workforce through attrition as recommended by CBO would result in a savings of nearly $50 billion from 2015 – 2024.
This is more bad news for federal workers, whose pay and benefits continue to be put under a microscope on Capitol Hill. Recently, lawmakers asked CBO to develop projections of the long-term impact of the federal retirement system on the federal budget.
And in a House approved spending plan from earlier this year, the so-called Ryan plan, the out-of-pocket contribution of federal employees toward their pension plans would have increased 5.5 percentage points. The plan was defeated by the Senate.
You need to be aware that the benefits and pay you have today may not be the benefits and pay you have tomorrow. Lawmakers are relentlessly eyeing cuts that could deeply impact your finances. They’ve done it before — hiking pension contributions — and surely they may do it again.
You need to begin thinking about your benefits package today and what that means in the future, especially retirement. We can help you understand your benefits and create a plan to help you work toward retirement security.