Update: Congress Refuses to Tax the Rich,
But New Postal, Federal Workers Must Pay
Current Workers Still in Jeopardy
APWU Web News Article 009-2012, Feb. 16, 2012
Published reports indicate that the latest deal to extend the 2 percent payroll tax holiday would require only new postal workers and federal employees to pay more for their retirement benefits. The increase would be used to fund another portion of the bill, which extends unemployment benefits.
The latest compromise, which excludes current employees from the increased cost, was reached at the insistence of a group of Democratic lawmakers. The agreement has not been finalized, and complete details of the agreement are not yet known.
Current Workers Still in Danger
However, another bill, which could be voted on in the Republican-controlled House at any time, would cut pensions for current postal and federal employees, while increasing the contributions the workers must make toward their retirement. H.R. 3813 would increase the amount postal and federal employees contribute to their retirement by 1.5 percent, with the increase phased in over three years, beginning in 2013.
In addition, employees with less than five years of service would face an increase of 3.2 percent. The bill also would reduce pensions for employees with less than five years of service by calculating annuities based on the average of employees’ high-five salary years instead of their high-three years, which is the current method. In addition, their pensions would be calculated at a lower rate of 0.7 percent per year, down from 1 percent.
The measure also would eliminate the supplemental annuity provision, which augments benefits for employees who retire before they are eligible for Social Security benefits at age 62.
H.R. 3813 was pushed through the House Oversight and Government Reform Committee by a pair of politicians who are well-known opponents of postal workers: Committee Chairman Darrell Issa (R-CA) and Rep. Dennis Ross (R-FL). The two are co-sponsors of H.R. 2309, a bill that would destroy the Postal Service as we know it.
The committee approved H.R. 3813 in a party-line vote, 22-16, with Republicans voting in favor of the retirement cuts and Democrats voting against.
Contact Your Legislators NOW!
“No one else is being asked to pay more — certainly not the banks or corporations,” said APWU Legislative Director Myke Reid.
Union President Cliff Guffey also condemned the move. “Congressional Republicans scream whenever there is a hint of raising taxes on the richest 1 percent,” he said, “but when it comes to taxing postal and federal employees, they’re all for it.”
“I encourage union members to contact their senators and representatives and tell them this is a raw deal,” the union president said. “Ask them to stop Congress from balancing the budget on the backs of public servants.” Call the House switchboard at 202-225-3121 and the Senate switchboard at 202-224-3121.