Kelley Condemns House Passage of Anti-Federal Worker Payroll Tax Bill

Press Release December 13, 2011

Washington, D.C.—The leader of the National Treasury Employees Union (NTEU) today harshly criticized House Republicans for passage of a payroll tax holiday bill that unfairly targets the middle-class federal workforce for even greater sacrifices than they are already making.

NTEU President Colleen M. Kelley said rather than approve a balanced, responsible plan to stimulate the nation’s economy, House Republicans have once again looked to the federal workforce rather than the wealthiest Americans.

“This is a message to those who guard our borders, protect our air and water, safeguard our retirement, inspect our food and drugs, assist our veterans, that the Republican leadership would rather cut their pay and retirement than raise taxes even a tiny amount on the ultrarich,” Kelley said.

The NTEU president was particularly angered by the willingness of the bill’s advocates to ignore the connection between federal middle-class workers and the goal of the payroll tax holiday, to give relief to working families.

“A payroll tax holiday, designed to put more money in the hands of working Americans, is an important and much-needed economic stimulus,” she said. “When you freeze the pay and increase the pension contributions of federal employees around the country, you defeat the purpose of the stimulus.”

As one bill after another is aimed at the pay and benefits of federal employees, Kelley repeatedly has emphasized that the men and women of the federal workforce already are making a $60 billion contribution to deficit-reduction efforts through the current two-year pay freeze.

“No matter what the problem, the GOP leadership keeps proposing the same old, tired provisions, cut federal employee pay and benefits,” in spite of the fact that federal employees have had their pay frozen for two years, she said, noting that NTEU will call on Senators to defeat the measure.

The House leadership measure would extend at the present level the payroll tax holiday due to expire at the end of the year, while calling for an increase of 0.5 percent each year beginning in January 2013 in federal employee pension contributions, after which the full 1.5 percent total would become permanent in 2015.

The bill, which would extend the pay freeze for another year, also creates a new class of federal workers—new hires with less than five years of previous federal service—who would see an increase to their pension contribution of 3.2 percent beginning in January 2013. Overall, pension calculation changes, including the use of a high-5 rather than a high-3 average formula, would reduce the value of pensions for these employees by some 30 percent.

It would, as well, eliminate the Social Security supplement, effective Jan. 1, 2013, except for those federal employees with mandatory retirement ages.

“This bill truly is an assault on a dedicated and talented workforce, whose members played no role in creating our nation’s fiscal problems, and who should not be asked to bear the brunt of efforts to address those issues, while the wealthy get a pass,” the NTEU leader said.

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

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