As part of his budget proposal that was released on March 12, Paul Ryan is proposing that 210,000 more federal employees be let go, which is 10% of the current number of employees. He would not directly lay off employees, however, but would achieve the reduction in the federal workforce through attrition, by imposing a two-year hiring freeze.
This action would save a reported $49 billion toward Ryan’s overall goal of eliminating the federal deficit by the year 2023.
A further $132 billion in savings over 10 years would be achieved by restructuring the current federal employee pension program, so that employees paid more into their retirement accounts than they currently do. This would align federal retirement programs more closely with private retirement programs, in which employees furnish the majority of the contributions.
Ryan’s proposals aren’t offering anything new, but they are likely to be considered more closely than they have been in the past, thanks to the current sequestration cuts that are being enacted. These include a 20% pay reduction for many federal employees, through the use of mandatory unpaid furlough days, and the elimination of some 46,000 private contractors that used to work for the Pentagon.
Federal workers make, on average, approximately 44% more than their private sector counterparts, which is attributed in part to higher education levels and more white-collar jobs in the government, as well as the fact that many jobs are in the high-cost-of-living area surrounding Washington, DC.
Federal workers are already operating under salaries that are frozen at 2010 levels, although President Obama has proposed a 0.5% increase when the current budget ends. Many feel they have been unfairly targeted as part of the budget deficit debate.
They may have a point, but it seems clear that they are currently on the losing side of the discussion. Legislation from both parties seems to have them squarely in the crosshairs, so federal employees should definitely be looking for a safe haven.