Federal unions claim sneak attack in unemployment insurance deal

Wednesday - 2/15/2012, 5:55pm EST

Federal employees thought they had received a reprieve from an increase in how much they contribute toward their pensions when House Republicans agreed to move forward with a payroll tax extension without budget offsets.

But federal employee unions say lawmakers have slipped in a proposal to raise worker contributions 0.8 percent to help pay for half of the $30 billion cost to extend unemployment insurance for another 63 weeks.

"What scrapes me is, here we have workers being asked to pay for something that they didn't cause, they had no part in, yet the tax on millionaires, financial-service transactions tax, eliminating subsidies for big business, minimum corporate tax, agriculture subsidies, none of this comes into play to pay for the unemployment extension," said John Gage, national president of the American Federation of Government Employees, Wednesday during a call with reporters. "But one party has insisted it come out of federal employee retirement. So we have federal employees making $30,000 to $40,000 to $50,000 actually hav(ing) to pay for unemployment insurance to other working Americans. I think it's just completely wrong headed."

Net loss for federal workers?

Gage said feds already have helped save $60 billion through the two-year pay freeze on federal workers.

Colleen Kelley, the president of the National Treasury Employees Union (NTEU), said she was surprised that House lawmakers went down the path of using federal pension contribution increases to pay some of the cost for extended unemployment insurance.

"Essentially what this means — the passage of the payroll extension — everyone in the country will see an increase in their take home pay and federal employees will see cuts because they will be funding part of this proposal," Kelley said during the press call. "They will end up with a net loss in take home pay."

Gage said Rep. Dave Camp (R-Mich.), the chairman of the House-Senate payroll tax conference committee, is targeting federal worker contributions.

"We are concentrating on Congressman Camp and Sen. [Harry] Reid to not to go through with this deal or reconfigure out so it doesn't come out of working people's pensions and salaries," Gage said. "We've had about 1,000 people in town this week. We've been working the Hill all week."

'Voodoo' accounting?

The House Ways and Means Committee, of which Camp is chairman of, did not immediately respond to a request for comment on AFGE and NTEU's accusations.

Gage said AFGE members met with Camp Wednesday and he said he was hopeful to have made progress in explaining their concerns.

"One thing we have questions about is the discretionary part and mandatory part," he said. "They are saying unemployment insurance is a mandatory deal so it has to be paid for out of mandatory money. When really, the 0.5 percent pay raise the President has in his budget amounts to about a $28 billion savings over the 10 years period. But that is not scored as savings that could be applied to the unemployment insurance. We are asking, why not? A lot of this accounting is voodoo."

An email requesting comments from Reid also was not immediately returned.

The White House proposed in its fiscal 2013 budget request a 1.2 percent increase in employee contributions phased in over three years. A surface transportation bill making its way through the House now, includes a 1.5 percent increase over three years.

Gage and Kelley said it is unclear what the President's proposal and the surface transportation bill proposal would mean for the unemployment insurance proposal, including whether lawmakers would give up on one if the other becomes law.

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