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Washington, D.C.—The Federal-Postal Coalition—a group that includes the National Treasury Employees Union (NTEU)—today warned that the negative effects of a Senate Republican proposal targeting federal employees and their agencies would be felt throughout the economy and very likely lead to private sector job loss and wage deflation.

In a letter to senators, the coalition of unions, managers and advocacy groups took aim at S. 1931, a bill introduced by Sen. Dean Heller (R-Nev.), that would require a five-year pay freeze for federal workers and permit only one employee to be hired for every three who leave the federal service as offsets to a proposed measure extending a Social Security payroll tax reduction.

“On behalf of the 4.6 million federal and postal workers and annuitants represented by the national member organizations of the Federal-Postal Coalition, we urge you to reject further federal pay freezes, staff reductions and agency budget cuts to offset the loss of revenue from extending the payroll tax reduction,” the group wrote.

Their letter added that “federal employees are already going into the second year of a congressionally-mandated pay freeze. Like other Americans, their health insurance costs have gone up. Their housing values have gone down, and they are facing all of the same challenges as other middle-class families in these difficult times, including spouses and grown children without jobs.”

The coalition emphasized the impact on the public of proposed cuts. “Federal employees are already facing downsizing based on funding cuts in the debt ceiling agreement, and agencies are having difficulty delivering the services the American public wants and deserves,” it wrote. “Reducing the size of the workforce by 10 percent will only exacerbate these problems.”

It added pointedly: “Yet, supporters of S. 1931 would rather put more people out of work during this recession and cut off the ability of agencies to deliver needed services than ask the wealthiest to pay one cent more.”

The group noted the irony that close to 600,000 federal employees, mostly older workers, are not themselves eligible for any payroll tax reduction because they pay into a federal retirement system that does not include Social Security. It called on the Senate to address that inequity by providing a tax credit equal to the payroll tax holiday to those workers who do not participate in Social Security.

NTEU is the largest independent federal union, representing 150,000 employees in 31 agencies and departments.