Tom Temin: And John, you have looked at this bill that we’re waiting on the Senate for and there’s not everything to love in this, even though it does fund the government through the end of the fiscal year.
John Hatton: Yeah, I mean, I think CRs generally are not ideal. They don’t allow reprioritization of funding for the upcoming fiscal year and changes and planning for the future. This continuing resolution does keep funding levels flat with some anomalies that would reduce and make some adjustments in programs, but not a large amount of those. So those anomalies were included by Republicans. They were not supported by Democrats, so this came out of the House with a party-line vote. One Republican voted against because it wasn’t conservative enough and then one Democrat voted for it.
Tom Temin: Right. Well, anything on federal employment that people should worry about or, I mean, the pay scales are what they are, but there are talks about benefit changes and so on?
John Hatton: So the continuing resolution does not include changes to federal benefits. That will be part of the congressional budget resolution and budget reconciliation process. And so that will be ongoing, but that’s a separate process that allows changes in mandatory spending that aren’t authorized via that annual appropriation process. So the House passed congressional budget resolution would require the Committee on Oversight and Government Reform to cut $50 billion off the deficit from programs under their jurisdiction. Now if you look at programs under their jurisdiction where they can find those savings, it’s pretty much just federal benefits in a list of programs or potential options for savings. The only ones that scored that seem under consideration are federal benefit cuts.
Tom Temin: And benefit cuts, in what form do you expect them to be proposed? I mean, they’re not in law yet, but we think they’ll try to go after, I guess, contributions to the annuity. Is that the basic way they go at it?
John Hatton: Yeah, there’s a few options. I would say that the two top options that they seem to be looking at are increasing contributions to the annuity to the federal to the first pension benefit for current employees. Those contributions have gone up for people who started in 2013 or 2014 or later. They’re now paying people who’ve started since 2014 are paying 4.4. So this would bring everybody else up to that level. So that is nothing more than an across-the-board pay cut for individuals because they’re not receiving any additional benefit. The other one that we’re particularly concerned about is voucherizing the Federal Employees Health Benefits Program and that would hit current employees and retirees alike. It basically would hold steady the government’s contribution at a set rate, likely increased for basic inflation. The problem is health care premiums have been going up at a rate of closer to 6.5% where inflation is closer to 2.5%. So you have that 4% gap that year after year, the government’s paying less means you’re paying more and after 10 years, you’re paying more than 50% of premiums. At some point, that program doesn’t even become very viable in terms of comparative to alternative. So we’re worried about that for protecting the integrity of health benefits for employees and retirees.
Tom Temin: But there’s no fundamental discussions like when they went from the Civil Service Retirement System to the Federal Employee Retirement System, SERS to FERS. That was enormous. Nothing like that. It’s just sort of almost a death by 1,000 cuts.
John Hatton: Yeah, we haven’t seen as one of the proposals that has been circulated, just eliminating the FERS annuity entirely. Doesn’t mean somebody wouldn’t propose that doesn’t mean it couldn’t be under consideration. But that is not something we’ve seen in the list. Now that has been proposed by the Republican Study Committee in the past that has been out there. It would likely be applied to new hires if that was applied. I don’t know what the savings would be for that, probably a lot larger, but just probably outside that 10-year window. So I don’t think that’s at the top of the list of threats, but it’s not outside the possibility.
Tom Temin: We are speaking with John Hatton, staff vice president of the National Active and Retired Federal Employees Association, or NARFE. And what have you been watching for on the RIFs? I mean, this Education Department deal, that kind of came out of the blue, well, expected but unexpected with the speed and severity of it, I guess you could say.
John Hatton: Yeah, overall, there’s an effort to create large-scale reductions in the federal workforce. And we’ve seen that with the deferred resignation offer, followed by layoffs of probationary employees and now with planned reductions in force. And some have already started in certain agencies, but there’s a timeline laid out by the administration in guidance for plans to be done this week, then followed by a second phase two set of plans to be done in April. And I think it remains to be seen how aggressive those rifts are and I think it’ll be agency by agency. I think we are maybe seeing a little bit of pushback from agencies on some of these DOGE efforts where agency heads are concerned, for example, about firing air traffic controllers, given recent safety issues. So how much pushback agencies are allowed to have in this process will certainly be something that’s revealed in the coming weeks and months.
Tom Temin: Yes, because the political leadership does seem to be taking different types of approaches in different agencies. I mean, Linda McMahon in Education, wow, closed the building and 13, 15, 1900, whatever the number is of people being told they’re gone. But some of the other departments, it’s a little bit more orderly or you’re not hearing this kind of mass firings and so forth after the White House a couple weeks ago said, ‘Well, we’re going to leave it up to the agency heads more than we are to DOGE at this point.’
John Hatton: Yeah. And I think this also ties in with the overall government funding process in Congress. I think the more politically disfavored agencies are seeing really, really severe cuts to the point of being eliminated potentially. And at some point, you run into empowerment concerns that could be challenged in court if you’re just deciding not to carry out the functions of the agency. Now, with the continuing resolution, that would keep the law the Congress put out with regard to directing federal agencies that would remain in place. So the administration has two different options for some of these cases where they’re essentially eliminating agencies or stopping programs that were directed by Congress. One is to challenge in court their power to impound those funds and not carry them out, which I don’t think even Republicans in Congress are that supportive of. The other is to send a rescission request to Congress to pass. Now there’s a process in Congress where that doesn’t avoid a filibuster from Senate Democrats. So if the Republicans are all in unity on some of those cuts, that could be done that way. So we will see, I think, this continuing resolution potentially sets up the stage for one of those two pathways. And until we see the rescission request, it hasn’t been committed to by the administration, we could be in this very uncertain time and uncertain legality of a lot of their moves.
Tom Temin: And what are you telling members then, generally? This is all happening outside of anybody’s real ability to kind of slow it down, except the courts.
John Hatton: I mean, we’re trying to provide as many resources for individuals as possible. I think in certain cases, people will simply need to consult a lawyer to challenge particular actions. There are actions that are applicable governmentwide. NARFE is a party to a couple pieces of litigation, one on DOGE’s use of violation of Privacy Act laws, another one with regard to preventing the implementation of Schedule F, or now PC, which would allow firings at-will for employees that would be moved into that excepted service schedule. So there’s a lot going on in the legal arena that may provide a glimmer of hope for the future there. I think as individuals are affected personally that I think going into the court battle and assessing what rights you may have and potentially litigating those rights is what we suggest. On the democracy side of things, certainly we suggest that people contact their members of Congress and let them know how this is affecting them. Ultimately, with this continuing resolution, Congress is saying, We’re OK generally with the way you’re going about it.’ Maybe they’re saying a few things behind closed doors. Maybe they’re asking for rescission requests, but they’re not standing up to all the administration’s actions right now.
