House Republicans Attack Postal and Federal Retirement Benefits

The House of Representatives voted 243-193 on Dec. 13 to pass the so-called “Middle Class Tax Relief and Job Creation Act of 2011,” which would cut take-home pay for postal and federal workers by increasing their contributions to the Civil Service Retirement System (CSRS) and the Federal Employees Retirement System (FERS). The bill also would slash unemployment benefits, place unreasonable burdens on unemployed workers, and cut vital healthcare programs.

Voting in favor of H.R. 3630 were 224 Republicans and 10 Democrats. Fourteen Republicans and 179 Democrats voted no. Action on the bill now moves to the Senate.

The bill was introduced by Rep. Dave Camp (R-MI), and co-sponsored by Reps. Spencer Bachus (R-AL), Frank Lucas (R-OK), Dan Lungren (R-CA), Ileana Ros-Lehtinen (R-FL), and Fred Upton (R-MI).

The bill also would change the calculation of pensions for new hires with less than five years of creditable service and eliminate the FERS annuity supplement, which is designed to provide a benefit approximating the pension retirees would receive once they become eligible for earned Social Security benefits.

If enacted into law, employee contributions to CSRS would increase from the current rate of 7 percent to 8.5 percent of salary over a three-year span beginning in calendar year 2013. Contributions for employees covered by FERS would increase from 0.8 percent to 2.3 percent over the same period.

The bill would increase the contribution rate for postal and federal employees hired after Dec. 31, 2012, with less than five years of creditable service, from the current rate of 0.8 percent to 4 percent of salary. The pension formula for these employees would be based on the employees’ “high-five” years of service instead of the current “high-three” formula. Pensions for current employees’ would continue to be based on the “high-three.”

President Obama issued a statement before the House vote threatening to veto the bill if it reaches his desk.

"APWU members are encouraged to immediately contact their senators and urge them to oppose this unfair and misguided attack on postal and federal workers when the bill is considered in the Senate," said APWU Legislative and Political Department Director Myke Reid.