Fed Benefit Changes Made in Updated Reconciliation Bill as Overall Fate Remains Uncertain
Changes are made to federal benefit cuts as the House tries to pass the massive reconciliation bill enacting much of President Trump’s agenda.
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.
Other federal benefit cuts remain in the legislation, although some of the dates were changed.
The date to switch federal retirees’ annuity calculations from a high-3 to a high-5 calculation was moved from 2027 to January 1, 2028.
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.
President Trump Tries to Unify Fractious Republicans
The fate of the massive bill remains up in the air, with President Trump on Capitol Hill Tuesday to try and rally support for the legislation, which House Speaker Mike Johnson wants passed before Memorial Day. The so-called “big, beautiful bill” squeaked by the House Budget Committee over the weekend on a 17-16 vote. This comes after an initial committee vote failed.
Some hardline fiscal conservatives are demanding deeper cuts in government spending including cuts to Medicaid and green energy programs. Other Republicans from high-tax states are upset the bill does not raise the State and Local Tax (SALT) deduction cap high enough.
To both, the president fired back.
“Don’t f–k around with Medicaid,” said the president as reported by Politico, according to two Republicans granted anonymity to describe the private meetings.
And the president told the SALT holdouts to “leave it alone” and take the offer on the table.
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.
