In accordance with the Republican budget blueprint, passed by the House of Representatives in April, the Oversight and Government Reform Committee marked up its portion of the bill on April 30, advancing proposals that would significantly cut federal employee retirement benefits. The committee passed its portion of the bill by a vote of 22-21. The cuts are part of the broader effort to pay for President Trump’s “One big, beautiful bill,” aimed at extending the 2017 tax cuts, enhanced border security, defense spending, and energy dominance.

The House-passed budget reconciliation directions require the Oversight and Government Reform Committee to provide $50 billion in cuts over the next 10 years. The following cuts are included in the current House language:

• Increases the amount all feds – not just new hires – contribute to the Federal Employees Retirement System (FERS) to 4.4 percent.

• Eliminates the FERS annuity supplement for those who retire before Social Security kicks in at age 62. The supplement would be eliminated upon enactment of the bill.

• Changes the formula for calculating an annuity from the average of highest three years of salary to the average of the highest 5 years. This provision would take effect on January 1, 2027.

• Institutes a $350 filing fee for employees who file an appeal with the Merit Systems Protection Board (MSPB).

• Requires new hires to decide between waiving their civil service protections and being an “at-will” employee, or paying an additional 5 percent of their basic pay toward their FERS annuity.

While the committee advanced the proposals for now, Rep. Mike Turner (R-OH) spoke passionately against the cuts and was the only Republican to vote against the bill during the mark-up.

“Making changes to pensions and retirement benefits in the middle of someone’s employment is wrong,” Turner said. “Changing the rules, especially when someone has already been vested in their benefits, is wrong. Employee benefits are not a gift, they’re earned . . . I understand the need for reform, and we can certainly have changes occur for the benefits of new hires, but for current employees, to change the rules for people in the middle of the game is just wrong.”

“I have talked to enough people on the House floor that I do think this will not be included in the final bill,” Turner continued, “and that this bill ultimately will have to be changed if it’s going to be included.”

As Turner indicated, there are several steps remaining – and conceivably opportunities to amend the bill – before the final package is completed. These proposals are not new – they have been proposed many times before in legislation and budget requests from the administration. The bill needs to be considered and passed on the House floor and reconciled with the Senate before it can be sent to the President. However, while changes are possible, the underlying requirement for the committee to provide for $50 billion in cuts remains. And given that this bill is linked to President Trump’s signature legislative agenda, including extension of tax cuts currently scheduled to expire, it remains likely the bill will advance one way or another.

FMA has and will continue to oppose the dramatic cuts to federal workforce retirement packages, particularly those impacting current feds, including through letters and advocacy from the national office, action letters, and coordinated action with our coalition partners within the Government Managers Coalition and the Federal-Postal Coalition.