Burdens Increase on New Federal Employees as Senate Committee Keeps Civil Service Cutbacks

Senate Republicans are giving a first look at their plans for federal benefit cuts, as draft text is released as they mark up their portions of the “Big Beautiful Bill.”  In the crosshairs are new federal employees. 

The text from the Senate Homeland Security And Governmental Affairs Committee (HSAGC) forces new hires to choose between paying higher retirement contributions and receiving civil service protections, or contributing less and becoming at-will employees.

The Senate provision is tougher than the House’s and would raise the mandatory contribution for new hires with civil-service protections to 14.4 percent. New hires who choose to be at-will employees would see contributions rise to 9.4 percent. In contrast, the House legislation raised contributions to five percent for new hires who choose civil service protections. 

Senators believe the proposal will generate $20 billion in savings over five years. 

“The Federal Employee Retirement System (FERS), which provides retirement benefits way beyond what the private sector typically offers, lacks solvency and costs more to administer than what federal employees are required to contribute,” said the draft legislation. 

However, HSAGC did eliminate other House-passed provisions. Those include scrapping the elimination of the FERS supplement to those who retire before age 62 and killing a provision that would change the FERS benefit calculation from the average highest three years of salary to the highest five years. 

Civil Service Targeted

HSAGC did keep the provisions aimed at remaking the civil service and watering down civil service protections. 

A filing fee of $350 for appeals with the Merit Systems Protection Board (MSPB) is included. The fee is reimbursed if appeals are successful. The fee is designed to prevent “baseless claims” from being filed. 

Also included are provisions clamping on unions and professional organizations.

HSAGC text would ban federal employee unions’ use of official time and government resources for union activities.

It would also charge a ten percent fee for any federal employee paycheck deductions that go to “certain tax-exempt organizations” — or namely, payments that go toward federal union and professional association dues.

Finally, HSAGC sets aside $100 million for the Office of Management and Budget (OMB) to oversee and implement the Trump administration’s reorganization plans over the next decade. It would also exempt the president from portions of federal law requiring the executive branch to notify Congress of agency reorganizations. 

Labor Groups Urge Opposition

It’s important to note that these are just draft proposals, and that the text is likely to undergo many changes over the coming weeks, which must remain palpable to Republicans in both chambers.

For their part, federal labor groups are urging opposition. 

“I call on every member of the U.S. Senate to reject these draconian provisions that would undermine our federal workforce, our rule of law, and our democracy,” said American Federation of Government Employees (AFGE) National President Everett Kelley.