Home Media Center News Releases

Washington, D.C.—As the Senate moves forward in considering year-end tax-cut legislation, the leader of the National Treasury Employees Union (NTEU) welcomed inclusion of NTEU-supported language extending a $230 transit subsidy for employees, including federal workers, who commute to and from work on public transportation.

Without the legislation, the maximum amount of the subsidy is scheduled to revert back to $120 per month. The Senate bill would continue the extension of the higher subsidy for another year.

“A great many federal employees across the country use public transportation to and from their work,” said NTEU President Colleen M. Kelley, “and the increased maximum subsidy has been an invaluable help to them. I am pleased to see the Senate address this important issue.”

At the same time, the NTEU leader called on Congress to act promptly to avoid unequal treatment impacting some 600,000 federal workers who not only face a looming two-year pay freeze, but who would not benefit from a proposed one-year, 2-percentage-point payroll tax cut for workers covered under Social Security. Such a tax-holiday proposal is part of the tax package.

President Kelley said federal workers under the Civil Service Retirement System (CSRS) “face a serious double blow” from the pay freeze and the fact that, because they are not covered by Social Security, they would not benefit from a proposed 2 percent reduction in employees’ contributions to Social Security.

The circumstances of CSRS-covered employees differ from the situation impacting the majority of the federal workforce, covered under the Federal Employees Retirement System (FERS). Under that system, employees pay the same 6.2 percent of their pay into Social Security as is paid by private sector workers and are covered under Social Security. NTEU was successful in securing a technical fix in the pending Senate measure to ensure that FERS-covered employees would receive the temporary reduction in payroll taxes.

In a letter this week to every senator, President Kelley said CSRS-covered federal employees pay 7 percent of their salary toward their pension. Unless the tax cut plan includes a one-year, 2 percent reduction for employee contributions to CSRS pensions, Kelley wrote, federal employees under CSRS would be seeing not only a pay freeze, they also would not benefit from the 2 percent payroll tax cut that would impact both private sector workers and federal employees covered by FERS.

“NTEU believes this unequal treatment of federal employees is unfair, and urges that a one-year, 2 percent reduction in employee contributions to CSRS, or similar remedy, be included in any payroll tax holiday legislation,” Kelley wrote.

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