Freeze Pay/Defrost Social Security

December 13, 2010

by Mike Causey

A famous Prussian statesmen once said "laws are like sausages. It's better not to see them being made!" You got that right, Otto.

Segue to the plan to freeze federal pay for two years while cutting the Social Security payroll tax by two percentage points. It has some people confused. And a lot of them, at least inside the government, angry.

If the proposal becomes law, there would be no federal pay raise until at least January 2013. At the same time people who pay into Social Security would get a slight increase in take-home pay. That would benefit most Americans workers, including the majority of feds who are under the newer Federal Employees Retirement System. The payroll tax cut would not help the approximately 600,000 long-time workers who are under the old Civil Service Retirement System. That was the subject of Friday's column which apparently ruined a lot of people's breakfast. Just doin' my job!

So if it happens, is it smart and fair or it a political shell game? Your call:

• "Of course not. The older CSRS workers who provide services and defend this country get screwed again. I am sure my CSRS brothers and sisters will be outraged once they learn of this scam against us. I do not see the major news services picking up this story and mentioning the inequity of this 2% cut for the CSRS employees. Please do not identify my last name or the agency I work for. The FERS Senior Level managers or the Schedule C appointees do not understand." Mr. A
• "Those of us in CSRS contribute the same % as the Social Security tax into our Pension Fund. The solution is simple. A 1 year 2% reduction in the pension contribution." W. Fort Lee NJ
• "Consider that 'jump-starting' the economy by giving millions of American workers, including FERS feds, what amounts to a 2 percent pay raise via a reduction in input to social security may well result in a reduction of benefits paid out to social security recipients. It's like squeezing the toothpaste tube with the cap on ...(T)he content may be moved around but nothing really changes. FERS feds may well come out on the south side of this, because while CSRS feds will remain status quo, FERS feds may face a permanent reduction in social security payments down the road." RJC
• "No, it's unfair that workers under FERS will be given a two percent pay raise via the Social Security tax cut versus workers sitting side by side with them who are under the CSRS retirement system. What's even more unfair? Federal workers singled out from millionaires and billionaires, offered up as sacrificial lambs to various politicians, to be used as 'selling points' in their next runs for office." Joan with SSA
• "I do not mean to ignore the CSRS'ers concerns, but what's the deal with Social Security. The rumors say that SS is broken, will run out of money, and no one is willing to fix it. So let's put less money into it and watch it run out faster? James at USDA
• "Hell yes it's fair. Compare CSRS with FERS - most would take CSRS if given the opportunity. FERS requires federal employees to work longer, contribute more to their retirement, and be tied to social security which limits the ability to retire and work full time - unless you want to pay the government to work. Tell those folks in CSRS I'll trade retirement programs with them. They can have my 2% increase this year." Lynn with the Marines
• "I had to laugh when I read your article about CSRS-covered employees being angry about not getting a tax cut. They can retire much earlier with nice fat pensions and don't have to pay Social Security but are mad that those of us who do may get to pay a little less. I say, shut up and think about the fact that while you are kicking back enjoying your retirement at 55, those of us under FERS will be working well into our 60 or 70's and hoping there will be money left in Social Security." Sign me Beth at DHS
• "So the current political position in DC is that feds get paid too much so we put the screws to the feds for 2 years because it looks good, but all other workers, no matter how much they get paid, get a 2% social security payment break, and the unemployed need to get continued benefits because the economy needs the money? Mix into the pot the fact that the $250 extra for retires was voted down, too. Don't active CSRS feds and federal retirees spend money, too? Doesn't anyone think this all through? Why do I even ask when I already know the answer?" Marc
• "...I've got a deal for the CSRS people complaining about not getting the 2% cut in FICA next year. The CSRS people can have the 2% cut next year if I can have all my FICA tax paid for the past 23+ years refunded. Give me a break! The CSRS people are conveniently forgetting all the FICA withholding they haven't paid over their 25+ years of service. I would love it if all that FICA money had been in my paycheck over my career. I guarantee I could have done much better on my own than what I eventually may (or may not) ever get from SS in retirement." Astounded In Atlanta
• "Here is another reason they are trying to get everyone off the old retirement system. They have tried for years to shove the new FERS system down our throats...they'll keep trying until everyone is off the old system one way or another. We have been penalized for working in the private sector and then coming to work for the government. They apparently do not appreciate our dedication ...something has to be done in order for us to be rewarded for our years of dedication to the government. Stop penalizing us because we come to work for them." Employee from Georgia
• "Fair? CSRS retirees' retirement income is one source - the pension/annuity - which will remain safe and reliable. FERS retirees' retirement income is based on three sources, one of them Social Security (SS). We've heard repeatedly for years that SS coffers are dwindling, future benefits and pay levels in doubt. So now we'll reduce our national workforce payments into the SS fund by nearly one third?! How is this a good idea? Seems instead to endanger a key component of FERS (and non-fed) retirees' future income by further degrading the solvency of SS. What's fair about that? I'd prefer to keep up the SS contribution level now, while I'm earning, rather than have my SS benefits slashed when I'm too elderly to balance the loss by working!" A from DoD
• "Yes, the 2 percent pay raise to feds under the FERS system is extremely unfair. I'm a 35 year fed with USDA, under the CSRS system, at a GS-13 Step 4. I won't get my within grade until January 2012. The government matches FERS employees contribution to the Thrift Savings Plan, plus they will get a 2 percent salary increase on top of that? Why are we CSRS employees being discriminated? Why not put a freeze on the matching contributions to the FERS Thrift Savings Plan? What type of budget cuts or salary increases is Congress taking? Also, if GAO did some audits, I'm sure they would find plenty of government waste going on (purchases of computer equipment every year, new furniture, flat screen 42 inch high def televisions, etc.), which typically occurs at the end of the fiscal year. If the extra money (in the budget) isn't used, they (agencies) lose the money. So end result, they spend unnecessarily." USDA
• "When I first read your story on how us CSRS types will be missing out on the 2% reduction in Social Security taxes during the 2 year freeze on our salaries, I was incensed. Then I thought a moment. If I'm now not paying ANY Social Security tax, aren't I taking home more of my gross salary than my FERS colleagues who make the same salary? Hmmm. Not getting a reduction in a tax I'm not paying at all. Seems I will still be getting more of my salary than the FERS folks, just not as much more. Instead of getting incensed, I think I'll light some incense, chill out, and make some tea." Cool at the FAA.