Rep. Paul Ryan, R-Wisc. — one of the House’s leading deficit hawks and a critic of federal payroll costs — recently spoke to a focus group of voters that aired on Sean Hannity’s Fox News program April 12. When pressed to lay out exactly how he would cut the deficit, Ryan talked about ending corporate welfare, and then segued to his plans for the federal workforce:
The size of the federal government grew 10 percent in just the last two years. Name me another business in this time that is growing that much. So what we propose is through attrition, shrinking the federal workforce by 10 percent. For every three workers that retire, one gets rehired, to force the federal government to get more lean and more efficient.
Plus, benefits. We think federal workers should contribute something to their pension, because most other workers, in all other aspects, pay toward their pensions. We think the federal workers should do as well.
Ryan’s statement on federal pensions is misleading, and inconsistent with his previous stance on the subject.
His assertion that feds “should contribute something to their pension” ignores the fact that federal employees already do put money toward their pensions. Employees under the Federal Employees Retirement System contribute 0.8 percent of their salaries towards their defined benefit pensions, as well as 6.2 percent of their salaries toward Social Security, for a total of 7 percent. (Feds under the older Civil Service Retirement System pay 7 percent into their defined benefit pension. CSRS employees do not pay into Social Security, but they don’t receive any benefits from Social Security either.)
Ryan is well aware of this fact. His own budget plan takes a cue from the White House’s deficit reduction commission, and calls for greatly increasing the amount federal employees currently pay toward their pensions. The National Active and Retired Federal Employees Association estimates Ryan’s plan — which formed the basis of a budget plan the House passed April 15 — would increase the share FERS employees pay into their defined benefit pensions from 0.8 percent to 5.8 percent. This, when combined with that 6.2 percent paid into Social Security, would mean FERS employees would pay 12 percent in all toward their pensions. As for CSRS employees, NARFE said their contributions would increase from 7 percent to about 12.5 percent.
One can certainly argue that federal employees don’t pay enough towards their FERS or CSRS pensions. But to imply that they don’t pay at all is wrong. Video of Ryan’s comments are below, and the discussion about the federal workforce begins at the 7-minute mark.
UPDATE: Rep. Ryan’s spokesman, Kevin Seifert, just returned a call I placed earlier today, and said he didn’t think Ryan’s comments implied that feds don’t pay anything toward their pensions — just that they should pay more.
That may be what Rep. Ryan meant, but it doesn’t come across that way — especially since Ryan follows his statement about feds by saying that other workers pay toward their pensions.
Charles King Says:
April 26th, 2011 at 4:11 pm
12-15% into your retirement plan is not unreasonable when you consider they get at least 40% of their income in retirement.
sammie jo Says:
April 26th, 2011 at 5:00 pm
Okay…we forgot to mention something about what FERS employees contribute. We also contribute towards the Govt’s version of a 401K (TSP). Our “pension” is built around Social Security (and we all know that this is an inverted triangle and more than likely will not be around when we retire) and what we put away in TSP (which depending upon how you set it up could be wiped out with a stock market crash). Personally, I lost about 1/3 of what I have put away over the last 25 years of contributing to TSP in the last “market crash” – something I couldn’t afford to lose because of my age and not enough time to make up the loss before I retire.
Patti M Says:
April 26th, 2011 at 5:06 pm
You are mistaken. FERS only gives 1 percent per year of a person’s high 3 salary average. If someone works 10 years for the Federal gov’t, they only get 10 percent of the high-3 average. Say it’s 50,000, so for 10 years of service, that person only receives $5,000 per year in a FERS pension. All you have to do to check this is go to http://www.opm.gov and click on RETIREMENT and read. FERS participants also pay into Social Security, contrary to prevailing public opinion.
MIke D Says:
April 26th, 2011 at 5:22 pm
I’m a retired Federal employee for the last 2 years. Spent 34 years on the job. I’m sick and tired of senators such as Rep. Ryan bashing the current Federal work force. Its ridiculous, mis-leading, and pathetic. We’re not the problem with the current administrations budget woes, yet that same administration is waging war on the backs of the ones who pull their load. Its a disgrace! I don’t see much difference anymore between the parties, they’re all jumping on board. They better remember, the election is just around the corner and change is coming. It always seems to happen. The ones who run for political office are the worst of the bunch. Stupid is as stupid does. Anyone who suggests that the budget can be rectified by slashing current and retired Federal salaries, hiring practices, and benefits should be run out of town on a rail. It worked in President Lincoln’s time. I’m ashamed I voted for some of those bums!
April 26th, 2011 at 5:34 pm
The percentage is based on the number of years working for the government. If you work 40 yrs, yes you do get about 44% but if you work for 21 yrs, you only get 23%. Adding a flat percentage is not fair to those not working for 40 yrs. I am not against it but it needs to take factors into consideration such as age – then it would be more fair. Those retiring at 40 yrs should contribute more. What isn’t mentioned here is that Members of Congress and Congressional staff are also under FERS. They get more than GS schedule FERS. Are they going to contribute more? or do they even contribute at all? What is good for the Goose is good for the Gander.
Need to Change Says:
April 26th, 2011 at 5:41 pm
Instead of getting rid of the Fed workforce, why don’t we make salaries equal to industry (I would get about 20K raise), make the benefits the same (I pay the same for my insurance as does IBM and Oracle – I used to work for them). Freddie Mac has a pension and guess what, they contribute nothing!!!!! Where we could really save money is to eliminate the contractors. We pay 5.6 BILLION a year. Even with my benefits – still pay twice as much for a contractor. Hire qualified Fed workers and get rid of those that don’t perform. Slashing salaries, etc for the Feds isn’t going to solve the problem. Plus no raises, increase deductions means less to spend (5% is bottom line cash) – now may have more foreclosures, bankruptcies, less spending for goods and services. Be very careful for what you wish for.
April 26th, 2011 at 10:33 pm
I am so ashamed at how these fools who we elected in this last election have shown just how stupid they really are. They are so fast to stick it to the middle and lower class workers of our USA and still keep all their sweet cushy own worlds. Why don’t they lead by example like those who served out country learned in the Military? If giving something up is “how we fix their problems” they should be the first to give up something, like one term served and forever earned retirement of their pay. The American people have been so mislead and taken advantage by these dirty politicians for generations and we just keep feeding their greed. Something has to change and that applies to all of them in political offices, they need to be held responsible for their parts. After all did we make these decisions that we are now paying for and so will our grand kids.
Young Fed Says:
April 27th, 2011 at 1:54 pm
If congress were to make all of Ryan’s ideas into law. I would loose my house and most definitly look for another job. I was a student for 5 years, than contractor, now a fed again (G.s. 9). This attack on federal employees will hurt all of us but us young people are finding it hard to find motivation to stick around. Raises are few and far between and a step increase (if you get it) mean nothing if cost of living is not given to us. If their main goal is to give no young people and motivation to work the fed, than they are doing a good job.