CHAINED CPI PROPOSAL IN PRESIDENT'S BUDGET TAKES MORE FROM FEDS - April 17, 2013
Public sector roundup: Obama budget proposal calls for 1 percent federal pay raise, increased pension contributions
By Louis C. LaBrecque, Bloomberg BNA
President Barack Obama released his budget plan for fiscal year 2014 on April 10. While he included a one percent increase to federal pay, he called for the use of a chained consumer price index (CPI) in order to calculate cost-of-living-adjustments. "The chained CPI rises more slowly than the consumer price index for urban wage earners and clerical workers (CPI-W)--a measure of inflation used by the Labor Department's Bureau of Labor Statistics--because it takes changes to consumers' spending habits into account." A chained CPI would result in lower increases to COLAs, negatively affecting retirees.
Commenting on the president's proposal, Federal Managers Association National President Patricia Niehaus stated, "[W]e are troubled that federal employees continue to play a lopsided role in deficit reduction strategies, sending the message that those who serve our nation day in and day out are responsible for our government's spending problem."