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Public Statements

Issue Position: Federal Worker Pay Reform

Issue Position

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Date:
Location: Unknown

Tommy Thompson has proposed a sweeping change to federal health and retirement benefits for federal civilian employees citing a recent Congressional Budget Office report and the success of Governor Scott Walker's reforms in Wisconsin.

The Congressional Budget Office issued a report on March 31st outlining compensation disparities between federal civilian employees and private sector employees. On average, the benefits earned by federal civilian employees cost 48 percent more than the benefits earned by private-sector employees with certain similar observable characteristics.

"The Congressional Budget Office has demonstrated that federal worker benefits are out of line with the private sector, just as they were in Wisconsin before Governor Walker took action to balance our budget. Our federal budget deficit needs the same bold action as was taken in Wisconsin," Thompson said. "As a U.S. Senator, I will introduce legislation to require additional employee contributions to health insurance and retirement to bring these benefits in line with the private sector. In addition, I'll support Representative Duffy's legislation to freeze federal worker pay. We simply can no longer tolerate federal employee pay and benefits that exceed what the taxpayers earn."

The CBO report found:

The cost of providing benefits--including health insurance, retirement benefits, and paid vacation--differed more for federal and private-sector employees than wages did, but measuring benefits was also more uncertain.

Average benefits for federal workers with no more than a high school diploma were 72 percent higher than for their private-sector counterparts.

Average benefits for federal workers whose education ended in a bachelor's degree were 46 percent higher than for similar workers in the private sector.

On average, the benefits earned by federal civilian employees cost 48 percent more than the benefits earned by private-sector employees with certain similar observable characteristics.

We cannot ask our taxpayers to sustain this imbalance as they struggle to pay the bills. Therefore, Governor Thompson is recommending the following specific adjustments to federal compensation:

-Increase employee contributions to health care by 10% across the board. Phase in the increase in employee contribution over two years, beginning with the first budget passed after the 2012 elections.

-Create a new performance-management system. Direct the Office of Management and Budget to consult with private compensation experts to define an effective program that incentivizes and rewards performance, not merely time on the job. Current law provides automatic seniority-based pay increases for additional years of service.

-Increase the federal full retirement age from the current 56 to 62. Apply the new retirement age to all new employees and any workers currently younger than 45 years old.

-Provide new employees with one week of paid leave per year of employment up to three weeks after three years. Thereafter, add one week for every five years of employment. Three-year employees currently receive 10 federal holidays, 20 paid vacation days.


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