Fed Benefit Changes Made as Updated Reconciliation Bill Clears House, Trump Calls on Quick Senate Action
Changes are made to federal benefit cuts as the House last week narrowly passed, on a vote of 215-214-1, the massive reconciliation bill enacting much of President Trump’s agenda.
Federal employees were spared over $30 billion from an original $50 billion cut target Not included in the updated legislation was a proposal to raise the Federal Employees Retirement System (FERS) contribution rate to a mandatory 4.4 percent for all federal employees.
And changes for annuity calculation from High-3 to High-5 were dropped entirely following advocacy before the House vote by House Oversight Committee Democrats and some Republicans. Previously the implementation date had been kicked back one year to 2028.
Other federal benefit cuts remain in the legislation, although some of the dates were changed.
The elimination of the FERS annuity supplements for those who have not yet reached the age of 62 to collect Social Security, was delayed until 2028.
There were also additional exceptions created to receive the FERS supplements, including for those who accrue 20 years of service by age 50, or reach 25 years of service at any age. The exception for feds who retire at age 57 due to mandatory early retirement was included in the earlier text.
Federal employees subject to mandatory early retirement are also exempt from the provision requiring employees to choose between “at-will” employment status or accepting a five percent increase to their FERS contribution rate.
The bill would cut taxes by nearly $4 trillion while generating about $1.6 trillion in spending reductions and other deficit-reducing policies. The Committee for a Responsible Federal Budget said it would add about $3.3 trillion to the federal debt through fiscal year 2034.
President Trump Tries to Unify Fractious Republicans
The fate of the massive bill last week was up in the air, with President Trump visiting Capitol Hill Tuesday to rally support for the legislation, which House Speaker Mike Johnson was able to successfully pass before Memorial Day.
“We urge all federal employees and retirees to let the Senate hear it as well. This isn’t the final product. NARFE will keep fighting until all of this bill’s onerous provisions directed at federal employees and retirees are removed,” wrote National Active and Retired Federal Employees Association (NARFE) President Bill Shackelford following the House vote.
The bill now heads to the Senate for action.
There, multiple Senate Republicans have indicated they want to see more changes to the bill to earn their support. Meanwhile, the president is calling for the bill to be sent to his desk as quickly as possible.
