Legislative Issues: Anti-Federal Employee Environment

(Updated May 15, 2018)

QUICK REFERENCE

1. The Office of Personnel Management recently sent a letter to Speaker Ryan with a legislative proposal from the Administration that greatly affects federal employees’ retirement, including air traffic controller retirement. It proposes to: (1) eliminate the Social Security annuity supplement; (2) increase federal employee FERS retirement contributions 1 percent per year until the contributions reach 7.25 percent; (3) reduce CSRS cost-of-living adjustments (COLAs) by 0.5 percent each year and eliminate COLAs for FERS for all current and future retirees; and (4) modify the CSRS and FERS annuity calculations to be based upon a high-5 years rather than the current high-3 years.

2. NATCA vigorously opposes these proposals and any legislation that would attack federal employee wages and benefits.

3. Congress should not try to balance the federal budget on the backs of federal employees, including NATCA members, by making cuts to their wages and benefits.

HOW THIS ISSUE AFFECTS NATCA MEMBERS

The vast majority of attacks on federal employees are Congress’s attempts to balance the federal budget by cutting federal employees’ pay and benefits. No matter what the issue — elimination of annuity supplements, increased retirement contributions, changes from “high three” to “high five” calculations, and elimination or reduction of cost-of-living-adjustments (COLAs) — all result in reduced take-home pay for federal employees and negatively affect workforce morale. Most significantly, the elimination of the Social Security annuity supplement could cause a large wave of unanticipated retirements that would cripple the National Airspace System (NAS) by exacerbating the current staffing crisis. Finally, efforts to limit or eliminate official time, if enacted, would harm NATCA representatives’ ability to act effectively on behalf of its bargaining unit employees at the local, regional, and national levels.

FULL BACKGROUND

ISSUE

For the past eight years, legislators in both chambers of Congress have been trying to balance the federal budget in large part by making cuts to federal employees’ pay and benefits. Such cuts have affected NATCA members. For the past two years, these attacks also have originated in the president’s fiscal year budget proposals. Further, the U.S. House of Representatives has adopted new procedural and operating rules that make it easier to propose cuts to federal spending by reducing the number of government employees and their salaries.

At a time when the FAA is at a 29-year low for certified professional controllers (CPCs), with over 1,800 of the approximately 10,500 CPCs eligible to retire today, any reduction in retirement benefits will cause air traffic controllers to retire early. A large wave of unanticipated retirements could cripple the NAS by exacerbating the current staffing crisis.

MESSAGE

FAA employees are essential to the safety and efficiency of the NAS, and Congress should not target FAA employees in an attempt to balance the federal budget. The FAA is at a 29-year low for CPCs. Of the 10,546 CPCs in the system as of the end of March 2018, 1,842 — 17.5 percent — are eligible to retire immediately. If these retirement-eligible CPCs know that their annuity will be reduced significantly if they choose to retire after October 1, 2018, the date when the Administration proposes to eliminate the Social Security annuity supplement, it will greatly incentivize retirement before that date. A large wave of unanticipated retirements could cripple the NAS by exacerbating the current staffing crisis.

BACKGROUND

Beginning in the fall of 2010, the bipartisan National Commission on Fiscal Responsibility and Reform (also called the “Simpson-Bowles Commission”) suggested reducing the federal budget through significant cuts to federal employees’ pay and benefits. The final report became the framework for other anti-federal employee actions. In recent years, Congressional budget resolutions have been used to outline attacks on federal employees’ pay and benefits. Likewise, the current Administration has been proposing such attacks since taking office. In 2017, the Office of Management and Budget Director sent a letter to all agency heads directing them to make major cuts in programs, and even directing them to consider ways to implement workforce reductions in order to make the government “lean, accountable, and more efficient.” Since then, the proposed attacks have continued.

RECENT THREATS TO FEDERAL EMPLOYEES

Lawmakers have outlined attacks on federal employees’ pay and benefits as part of their Congressional budget resolutions. While budget resolutions do not have the force of law, they lay the groundwork for the appropriations committees to allocate government funding. Most recently, the proposed House FY 2018 budget resolution contained the elimination of the Social Security annuity supplement, which air traffic controllers receive, as an example of reforms to civil service pensions. Ultimately, elimination of the Social Security annuity supplement was not included in the final Congressional budget proposal. However, the Administration has been firm in its desire to eliminate the annuity supplement.

As such, on May 4, the Office of Personnel Management (OPM) sent a letter to Speaker Ryan that included legislative proposals for Congressional consideration that directly attack federal employee retirement in the following ways:

• Elimination of the annuity supplement for all federal employees who qualify, including air traffic controllers, federal law enforcement officers, and firefighters, who are all subject to mandatory retirement based on the requirements of their jobs.
• Increase of FERS retirement contributions 1 percent per year until the contributions reach 7.25 percent of each employee’s pay.
• Reduction of CSRS COLAs by 0.5 percent each year and elimination of COLAs for FERS for all current and future retirees.
• Modification of the calculation for CSRS and FERS annuity calculations to be based upon a high-5 years rather than the current high-3 years.

All of the aforementioned legislative proposals would attack the retirement benefits for NATCA members. At a time when the FAA faces a staffing crisis with nearly 18 percent of all CPCs eligible to retire today, any reduction in retirement benefits, especially the elimination of the Social Security annuity supplement, will cause air traffic controllers to retire early. This large wave of unanticipated retirements could cripple the NAS by exacerbating the current staffing crisis.

Additionally, the president’s FY 2019 Budget Proposal included each of the following attacks on federal employee wage and benefits, as well as attacks on labor unions in general:

Retirement Benefits:

• Proposal to increase to federal employee contributions to the Federal Employees Retirement System (FERS) to be phased in over several years, with individuals contributing an additional one percent of their salary each year.
• Proposal to eliminate FERS cost of living adjustment (COLA), and also to reduce civil service retirement system (CSRS) COLA by 0.5 percent.
• Proposal to Eliminate the Social Security Retirement Supplement, which would negatively affect air traffic controllers who are subject to mandatory retirement at age 56, before reaching social security age. It will similarly negatively affect federal law enforcement and firefighters, who are also subject to mandatory retirement.
• Proposal to change retirement annuity calculation from “high-3” years to “high-5” years.
• Proposal to reduce the Thrift Saving Plan (TSP) G-Fund interest rate.

Federal Employee Health Benefits:

• This proposal would revise the government contribution rate to between 65-75 percent depending on a plan’s performance.

Leave:

• Currently, all Federal employees receive 10 paid holidays and up to 13 sick days annually, as well as between 13 to 26 vacation days, depending on federal government tenure. This budget proposal would transition the existing civilian leave system to paid time off (PTO), which lumps all time off (sick and vacation) under one category in an attempt to reduce the total number of leave days.

Pay Freeze:

• Proposal to institute a pay freeze for Federal civilian employees for FY 2019.

Labor Relations/Union “Influence”:

• Proposal to overhaul labor-management relations because “collective bargaining contracts can have a significant impact on agency performance, workplace productivity, and employee satisfaction.”
• On September 29, 2017, Executive Order 13812 rescinded the requirement for labor-management forums. Agencies were further instructed to remove any internal policies, programs, or guidelines related to existing forums.

OFFICIAL TIME

Finally, official time has also come under attack in recent years. At the FAA, official time is paid time that employee-representatives may use to resolve disputes, negotiate changes in working conditions, and collaborate on workgroups that implement new procedures, such as NextGen. It saves the FAA and taxpayers’ time and money by allowing the parties to avoid costly arbitrations and other less-efficient means of dispute resolution. Official time is necessary for NATCA members to perform their representational duties owed to all bargaining unit employees, regardless of union membership status. It is an especially important tool now, as America’s air traffic control system is being modernized. Yet, legislation continues to be introduced to limit or eliminate official time. The U.S. House of Representatives has had two recorded votes on the issue in the past five years. NATCA was successful at defeating these efforts both times as a direct result of NATCA’s efforts to educate members of Congress and their staffs at the local and national levels.

NATCA members do not engage in lobbying activities — such as this NATCA in Washington event — while on official time.