[TSPStrategy] Come again? Political scientist sees shutdown as 'likely'— and feds need to get ready

https://www.govexec.com/pay-benefits/2023/09/come-again-political-scientist-sees-shutdown-likely-feds-need-get-ready/390200/

Come again? Political scientist sees shutdown as 'likely'— and feds need to get ready

With days left until funding for the federal government expires, some political experts foresee not only a shutdown, but possibly a long one, with an interruption in pay likely 

SEPTEMBER 13, 2023

• CONGRESS
• BUDGET
• SHUTDOWN

By NATHAN ABSE

Contributing Editor

Concerns about a federal government shutdown are creeping into everyday conversation across agencies, as this last week of funding for agency operations finds the Republican-led House of Representatives still split on next steps and possibly unable to pass a necessary continuing resolution or spending bill.

What might a worsening crisis and shutdown mean for federal employees? 

Thanks to a 2019 law, the Government Employee Fair Treatment Act, soon after a shutdown ends feds are guaranteed to receive any missed pay and leave they should have accrued. Prior to passage of that law, Congress had to vote to approve such retroactive compensation. Now the correction is made automatically. 

Yet, if there is a shutdown, and if it lasts more than a week or two — as some expert observers increasingly expect it might — hundreds of thousands of feds could go unpaid. In the several weeks-long 2018-2019 shutdown, over three-quarters of a million furloughed suffered through just that. 

Robert M. Stein, a political scientist at Rice University, is one of those pessimistic observers. He thinks that, on balance, a shutdown is likely — whether now or in a month or so, if a temporary CR is passed first. And that if a shutdown does happen, it is likely to be lengthy. 

"This year's possible shutdown scenario is a lot more complicated than that one back in 2018 and 2019," Stein told Government Executive. "What we have here is a majority that is itself divided. On the one side, you have the Speaker of the House, Kevin McCarthy, R-Calif., who is struggling to keep his party together. On the other, you have the Freedom Caucus — including Rep. Marjorie Taylor Green, R-Ga., Rep. Matt Gaetz, R-Fla., and others — who actually have totally disparate agendas, but who agree on one thing: contrary to Speaker McCarthy, they think it would just be great to shut the government down. 

"In the past, and specifically in the crisis that led to the last shutdown, it was simple. It was one team versus the other team, one party against the other," he continued. "Not so now. The GOP is split. Complicating things even more, each week McCarthy's speakership is in greater jeopardy—and he can't satisfy all sides of his own party on a shutdown option or the issues driving it, making an actual shutdown even more likely." 

Just what are those "issues" that are pushing Republican lawmakers toward a worsening split and a likelier shutdown? Stein's list of leading GOP dilemmas includes the entrees on the Freedom Caucus's menu: whether to press for federal abortion ban legislation, tightened border and immigration controls, pushing against the federal part of a "whole woke attitude," particularly in the military, among others. 

Most prominently right now, there is a roiling internal GOP debate on whether to press for impeachment of President Biden across several fronts, including his son's murky business dealings — with even the more moderate House R's saying evidence connecting the president to any of it is lacking. Disagreement on each of these fronts is driving a wedge between House Republicans, hampering any consensus needed to pass spending legislation and stop a shutdown. 

Bottom line: With this much internal division in the House — and the divided GOP itself hanging by a mere four-vote majority — it's very hard to function. 

"What if just one of your members gets sick — or tries to avoid this vote? You're down to just three," Stein adds. "McCarthy can't manage this." 

So, what does Stein predict on the shutdown threat in the immediate future, and on into the coming months? "All I can imagine right now, soon, is McCarthy goes for a CR, which the Freedom Caucus won't vote for, and so then the House Speaker crosses the aisle and tries to put together votes to avoid shutting down government. Here, I think he fails on this, with government shutting down. 

"Then he's going to lose his speakership," he added. "And maybe we even see a prolonged shutdown in government while there is no leadership in the House. It's a pretty dire possibility, but I wouldn't rule it out. 

"And by the way, shutting down government now could also send the economy into a tailspin," Stein noted, in case we lost sight of the wider damage to our economic well-being that an interruption in government operations might represent."

Again, even if a shutdown occurs, and a sizable number of government employees are furloughed — in the last one, over 800,000 out of 2.2 million were— the law requires feds to be made whole on their salary and leave benefits on the other side of the crisis.

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[TSPStrategy] From shutdown prospects to anti-telework bills: 5 things to watch when Congress returns - Pending legislation could affect federal employees' work-life balance, civil service protections, TSP investment options and more.

https://www.govexec.com/oversight/2023/09/shutdown-prospects-anti-telework-bills-5-things-watch-when-congress-returns/389934/

From shutdown prospects to anti-telework bills: 5 things to watch when Congress returns

Pending legislation could affect federal employees' work-life balance, civil service protections, TSP investment options and more.

SEPTEMBER 5, 2023

• PAY RAISE
• TELEWORK
• CONGRESS

AMELIA GRUBER

Managing Editor

The Senate returns from recess on Tuesday and the House the following week. Lawmakers will be racing the clock to tackle big issues, such as finalizing agency spending bills. Here are five areas to watch as Congress returns, that could have big implications for federal employees' paychecks, benefits and job security. 

1. Shutdown prospects. One of the top items on lawmakers' agenda when they return will be funding the government for next fiscal year, which begins Oct. 1. Senate Majority Leader Chuck Schumer, D-N.Y., and House Speaker Kevin McCarthy, R-Calif., have said they've agreed to work on a short-term continuing resolution to keep the lights on while negotiations on longer-term spending are completed. House Freedom Caucus members have threatened not to support the CR unless it meets a list of demands on conservative policy issues, but McCarthy plans to use the need to fund investigations of Hunter Biden as leverage to avoid a shutdown. 

The Fiscal Responsibility Act, signed into law in June as part of a deal to avoid a debt default, has a provision intended to discourage a shutdown. Under the law, Congress has until Jan. 1, 2024 to pass all 12 annual appropriations bills or a process would be triggered that could result in cuts to all agency budgets of 1% below this year's levels.  

2. Anti-telework bills. The White House earlier in August called on agencies to "aggressively" reduce telework this fall, but Republicans aren't taking any changes. The Stopping Home Office Work's Unproductive Problems Act (H.R. 139 and S. 1565) would require agencies to "reinstate and apply the telework policies, practices and levels . . . in effect on December 31, 2019" within 30 days of the bill's enactment. If agencies want to expand telework beyond 2019 levels, they would have to submit an Office of Personnel Management-certified plan to Congress first. 

The House narrowly passed the bill–dubbed the SHOW UP Act–in February, but the Senate version has not made it out of committee. House lawmakers are also attacking telework through appropriations legislation, attaching a rider to their version of the Financial Services and General Government spending bill that would direct agencies to return their telework policies to pre-pandemic levels within 30 days of the bill's enactment, similar to the SHOW UP Act. 

The Senate version of the Financial Services appropriations bill does not ask agencies to scale back telework, but the report accompanying the bill requires several agencies covered under the bill–such as the Securities and Exchange Commission and the Federal Trade Commission–to "evaluate how increased telework impacts recruitment, retention, and organizational performance" and report back to the panel within 180 days after enactment. 

The House and Senate will eventually need to hammer out differences between their two versions before the bill becomes law. 

Lawmakers are also making return-to-office policies a subject of their oversight efforts. Republican leaders on the House Oversight and Accountability Committee on Thursday sent a letter to White House Chief of Staff Jeff Zients seeking more information on his August message promoting more in-person work. "The American people deserve to understand the Biden Administration's post-pandemic telework policy and the thinking behind the Biden Administration's rapidly evolving telework posture," the letter stated. 

3. The pay raise. President Biden has proposed a 5.2% average pay raise for civilian federal employees in 2024, and so far Congress has done nothing to override that figure, which would represent the largest raise for feds since the Carter administration granted them a 9.1% average increase in 1980. 

The House and Senate draft versions of the fiscal 2024 Financial Services and General Government appropriations bill are silent on the pay hike, meaning lawmakers so far don't plan to stand in the way of letting Biden's plan take effect. The House's version of the Defense Authorization Act also supports Biden's proposed 5.2% raise for civilians, as well as military members. 

Democratic lawmakers have pitched overriding Biden's plan with an even bigger pay raise of 8.7% for 2024, introducing the Federal Adjustment of Income Rates Act in January. Such measures have become an annual effort that is rarely acted upon, and this year's is no exception. Both the House version (H.R. 536), sponsored by Rep. Gerry Connolly, D-Va., and the Senate bill (S. 124), from Sen. Brian Schatz, D-Hawaii, are sitting at the committee level. 

4. TSP limitations. Lawmakers have introduced legislative language that would place restrictions on investments made through federal employees' 401(k)-style retirement savings plan. A provision in the House version of the fiscal 2024 Financial Services and General Government Appropriations bill, for instance, would prevent federal employees from investing in mutual funds through the Thrift Savings Plan's mutual fund window that "make investment decisions based primarily on environmental, social, or governance criteria." 

The Senate's version of the Financial Services spending bill did not have the same language; however, the Senate earlier in the summer considered a defense policy bill amendment intended to prevent TSP investments in Chinese companies. The amendment to the fiscal 2024 Defense Authorization Act by Sen. Marco Rubio, R-Fla., failed, but by a relatively small margin, receiving bipartisan support and 55 of 60 votes it would have needed to pass. 

5. Schedule F (and efforts to stop it). Republican presidential hopefuls including former President Trump and Florida Gov. Ron DeSantis have pledged to revive "Schedule F," a Trump administration initiative to place potentially tens of thousands of career federal employees into a new job classification within the excepted service that would strip them of most of their civil service protections and make it easier to hire and fire them.  

Biden quickly reversed Trump's executive order creating the new job classification upon coming into office, before any federal employees were actually affected, but Democratic lawmakers would like to stop any future plans to resurrect Schedule F in their tracks. Sen. Tim Kaine, D-Va., in February introduced the Saving the Civil Service Act, which would stop the president from creating new job classifications within the excepted service. Kaine later tried to attach the bill, which has a House companion, to the Defense Authorization Act. The language did not make it into the Senate-passed version of the policy bill, and prospects of the standalone measure being enacted are dim, with a Republican majority in the House. 

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[TSPStrategy] FERS, MRA+10, FEHB and more - An acronymic Q&A with readers.

https://www.govexec.com/pay-benefits/2023/09/fers-mra10-fehb-and-more/390041/

FERS, MRA+10, FEHB and more

An acronymic Q&A with readers.

SEPTEMBER 7, 2023 03:00 PM ET

• RETIREMENT PLANNING

TAMMY FLANAGAN

Retirement Counseling and Training www.retirefederal.com

Federal retirement planning can be a complicated business. There are many different variables and rules that apply to each specific situation. Change one or two of the variables and the best solution to the problem will be entirely different. In order to get accurate answers to your retirement questions, they should be clear, and include specific details. The response you receive should be in plain language and include resources for additional information, if available.

With that in mind, let's take up some recent reader questions.

MRA+10 Eligibility 

I'm a civilian federal employee and I plan to retire under the MRA+10 type of retirement on July 27, 2024. I'll be retiring at age 59 years and 0 Months with 26 years, 8 months, and 23 days of creditable service, including 1,432 hours of unused sick leave. Although I will be over my FERS minimum retirement age, I know my annuity will be reduced because I will be under age 60 with less than 30 years of creditable service. I'm considering postponing the application for this benefit so that I can receive an unreduced annuity. If I postpone until I'm 60, will I receive a full, unreduced annuity at that time because I would then be 60 years old and have 20 years of creditable service, or must I postpone until I'm 62 to receive an unreduced annuity?

If you leave federal service with less than 30 years of service after you reach your MRA but before age 60, you can resign and file an application to apply for your retirement a few months before your 60th birthday since you will then have 20+ years of service. This will allow you to avoid the 15% age reduction (5% for every year under age 62). Select the commencing date for your retirement using the guidance provided in the application.

You can choose to have your Federal Employees Retirement System annuity begin either on the first day of the month following your separation from federal service or on the first day of any month that is at least 31 days after the Office of Personnel Management receives your application—but before your 62nd birthday.

You will receive your unreduced retirement if you choose as a commencing date the first day of the month after your 60th birthday, since you have over 20 years of service. Don't wait until you're 62 to apply! And also consider the benefit of continuing to work to age 60, when you'll qualify for an immediate, unreduced retirement benefit with a FERS supplement. The supplement is not payable when you postpone your retirement application.

Tandems and Health Benefits 

Thank you for your recent article regarding tandem federal employees and mentioning the Foreign Service. I have been reading your columns for years and feel like the Foreign Service (and our unique retirement) is the "Forgotten Service." One question: I was always told that an employee had to be enrolled in a health plan at the time of retirement to carry that benefit into retirement. Is that still the case, particularly for tandems?

The key word is "covered" by the Federal Employees Health Benefits program for the five years immediately preceding a retirement date. Here's the official word from OPM:

Employees are eligible to continue health benefits coverage, upon retirement, if they meet all the following requirements:

• He/she is entitled to retire on an immediate annuity under a retirement system for civilian employees (including retirements under FERS Minimum Retirement Age+10); and
• He/she has been continuously enrolled (or covered as a family member) in any FEHB plan(s) for the five years of service immediately before the date the annuity starts, or for the full period(s) of service since his/her first opportunity to enroll (if less than five years).

For purposes of continuing FEHB coverage into retirement, "service" means time in a position in which an individual was eligible to be enrolled. The individual is not required to have been an enrollee continuously, but the individual must have been continuously covered by an FEHB enrollment.

A Question of Entitlement

My wife and I are both Border Patrol Agents and have been married for almost 18 years. For most of our marriage, my wife has paid for our medical coverage. She is retiring at the end of the year and we're getting conflicting information about survivor benefits. Does my wife need to select a survivor benefit to continue medical coverage in case of her death? We have one daughter who is 17. Will she be included in the survivor benefit and/or medical until she's 26 if no benefit is selected?

Since you and your wife will have individual entitlement to FEHB (if you both stay long enough to qualify for an immediate retirement benefit), there is no need to provide a survivor annuity to maintain health benefits. If one spouse loses entitlement when the other spouse who had self and family or self plus one enrollment dies, then the surviving spouse can elect to have coverage through their own retirement or employee benefit. This would be a qualifying life event and the change could be made outside of open season using the SF 2809 Health Benefits Election form. 

As long as either you or your spouse are alive, your daughter will be covered until age 26.

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[TSPStrategy] Pay compression: One expert says a current bill would help, but deeper changes are still needed

https://www.govexec.com/pay-benefits/2023/09/pay-compression-one-expert-says-current-bill-would-help-deeper-changes-are-still-needed/390014/

Pay compression: One expert says a current bill would help, but deeper changes are still needed

"The relatively low pay for very skilled, very experienced workers is a serious problem," says James L. Perry, professor emeritus of public administration at the University of Indiana.

SEPTEMBER 6, 2023 12:00 PM ET

• PAY & BENEFITS WATCH
• PAY RAISE
• LOCALITY PAY

By NATHAN ABSE

Contributing Editor

In recent weeks, Rep. Eleanor Holmes Norton—along with Rep. Gerry Connolly, D-Va., and Maryland Democrats Glenn Ivey, Jamie Raskin and David Trone—introduced the Pay Compression Relief Act bill, which aims to alleviate the effects of pay compression on federal employees without actually rescinding the pay caps themselves. The bill would permit those who have hit their pay caps to get a raise—including next year's likely hefty boosts in pay and locality pay, as well as subsequent bumps in future years. 

The General Schedule's current year pay scale, not counting locality pay, ranges from $21,000 to just over $152,700. Each GS employee's compensation is pegged at one of the system's 15 levels and incremental steps in between. With added locality pay, in certain cities and suburbs upper-level feds can earn significantly higher salaries—up to $183,500. All feds within this scale have long tolerated unreliable pay increases that often lag inflation. 

But higher-level feds are increasingly encountering a new and less anticipated downside to federal employment: hitting their pay ceiling—in effect, succeeding at career advancement is rewarded with salary stasis due to congressionally mandated pay caps. Once stuck at this upper limit on income, a top-end fed's expenses can begin to outpace federal pay—and their skillset can begin to feel worth tantalizingly more to the private sector.

"Trapped in a General Schedule created in 1949," as Jason Briefel of the Senior Executives Association summarized the situation for the Federal Salary Council in October 2022, "the federal government is not in a position to compete with industry." 

This week, Government Executive explores the pay compression problem—and the proposed legislative remedy—with James L. Perry, professor emeritus of public administration at the University of Indiana. 

Q&A with James L. Perry 

GovExec: You have said that pay compression, a problem for feds at the top end of the pay scale, can be seen more clearly in the context of a wider picture of "pay dispersion"—an inclusive graph showing the range of pay from low to high across the federal workforce. How does seeing that range of fed pay help us to better comprehend pay compression and ways to fix it?  

Perry: Imagine a simple line graph plotting a range of federal salaries—moving from left to right,  from low to high salary. Looking at the slope of that salary line helps us understand the issue. Historically, we have had relatively high pay at the low end of that salary line, in the public sector. Very few low-level fed jobs start at under $30,000 these days. In these lower-end jobs, the pay often is high compared with private-sector counterparts. Yet, over on the high end of the graph, the top GS salary is now just a little below $200,000—and that's very low compared with the private sector. The graph helps you see how much more the situation disadvantages recruitment and retention for top government jobs. The relatively low pay for very skilled, very experienced workers is a serious problem—as is the resulting pay compression and stalled salaries weighing on feds at the very top end of our graph. The federal government's ability to recruit and retain, at the higher end, needs to improve.  

GovExec: You—and some other pay experts—argue that federal hiring and retention might be improved at the high end if it was allowed to go much higher, right? And also that some low-end jobs should maybe see their pay reduced? 

Perry: Yes. Some salary comparisons with the private sector buttress the criticism that some low-end jobs are paid too much. Having said that, the federal body that studies this—the Federal Salary Council—doesn't emphasize this part of the picture. But then the FSC is made up of five union representatives and three presidential appointees. With that composition, it may not be surprising that they are happy where the bottom of the scale is now. It's not in the labor unions' interest to seek to lower low-end pay, or to pursue higher pay for higher levels of the GS pay scale or the executive levels. Overall, the unions are most concerned with people at the lower end of the pay scale.

GovExec: So, you're saying the FSC—partly due to its composition—supports a status quo GS pay chart where some lower-end fed jobs remain overpaid compared with the private sector? And at the same time, the top end is generally underpaid, correct? 

Perry: Yes. I think that's true about the relatively high pay at the lower end. But there's also distortion in pay comparability at the higher end: Some analyses find feds near the top are paid 50%, 60%—or an even bigger percentage—less than comparable employees in the private sector. This distortion—underpayment—at the higher end of the pay scale, and the morale and recruiting problems it causes, rarely gets its due in the federal pay debate. 

GovExec: You're emphasizing that there are pay problems at both ends of the federal pay scale—but that they especially damage government's abilities to recruit and retain at the higher end. Question: Are there a lot of government analyses and papers on this problem? 

Perry: Not nearly enough. Over the past several years—at least five years, I would say—our government's capacity, at the Office of Management and Budget and the Office of Personnel Management, to properly study and analyze scenarios involving pay comparability and pay compression have been very limited. I know this from my research, and because I have inquired at OMB—asking for reports on the same issues we're talking about here. My questions include what if Congress somehow passed a bill and the government suddenly could pay our top executives, say, twice as much as we do now? Instead of closing in on $200,000, what about a top of $300,000 or even $400,000? How much would that boost the cost of labor? But what might be the benefits and savings—on recruiting new employees, for instance? How many feds would be affected? We don't really know the answers, because we just don't have the capacity to run such scenarios, not accurately. To me, this is very troubling.  

GovExec: Is there a way for Congress to get beyond the doom loop you're describing? For instance, one where government and outside research orgs run more detailed scenarios and studies, so lawmakers get enough compelling data and are motivated to tackle pay compression? 

Perry: I'm not sure how. For now, it seems to be unlikely the needed studies will get done. And yet unless we can get better and more detailed numbers, clearer numbers, ones that can guide us to improve things, we might remain stuck. We clearly want studies that would help us to say, "Hey, look, retention would go up x amount if the federal government boosted the top pay for the top 5,000 G.S. and executives by, say, $100,000" or whatever the hypothesized number is. I think these kinds of studies might also show, "Boosting top pay by $100,000, in retaining more of the best talent, would net save government x amount." The point is, without good, solid study and scenarios, we can't really get much detail on some of the real problems and solutions on federal compensation. 

GovExec: But how might deeper studies into a tweaked pay scale, raising top end salaries, actually help? 

Perry: Because if we could run more detailed scenarios, those might tell us how and at which agencies a better-paid high end would help retain more good and talented people. implementing better retention plans at certain agencies might also bring better staffing and better results—better government and government services. Again, we just don't know. It could be that if Congress ordered a boost in high-end salaries by way of savings made from low-end salary cuts, it won't end up in a net gain. In fact, if government were to cut salaries at the low end of the scale and put all of the savings into increasing funding for top salaries, by some estimates that might barely cover 20% or 30% of any impactful new, higher pay scale for people at the top. Besides, cuts at the bottom might have their own morale and productivity costs.   We just haven't adequately studied these scenarios. 

GovExec: Are there additional likely ways for the federal government to fund higher top-end salaries other than salary cuts at the bottom of the scale, to compete with the private sector for the best employees? 

Perry: Sure. Historically, we have seen other ways. For example, instead of cutting salaries at the lower end of the pay scale, Congress could try reducing the actual number of higher-level federal slots to fund higher pay at that level. If Congress said, "OK, we're going to reduce the number of senior executives—from, say, 7,000 to 6,000—without reducing funding for that level of government," that could yield significant funds to boost top employee pay, right? Proposals like this date back to the Reagan administration initiatives and its Grace Commission. 

GovExec: How would you rate the possible good done by the proposed Pay Compression Relief Act? 

Perry: Well, it could be useful, for a while anyway. But that approach alone wouldn't solve the problem, certainly not long-term. As I understand it, the bill as it is now would boost pay only for those at the top end of the General Schedule. That's unfortunate. Any pay reform legislation would be better if it applied to the wider workforce, including those in the Senior Executive Service. The net effect of giving only those at the top of GS the locality and inflation boost might—might—be to make things worse. How? It could benefit people at some jobs and locations and not others, creating discord. And discord among people who work together may diminish morale and their collective effort. On the other hand, the reform bill could be a net positive for government. It could stop some federal employees fed up after hitting pay caps from jumping ship. So, it's a mixed bag.  Based on what I know right now, though, I would say on balance the bill would be is better than nothing—as a short-term solution. 

GovExec: How would you rate the reform bill's chance of passing?

Perry: Right now, I'm not sure the Norton bill will get anywhere. I think the only hope for its passage is if Congress agrees on a much bigger deal, a bigger compromise. If they succeed at this bigger deal—one covering the budget, deficit and debt limits, longer term, and the like—then this or a similar proposal for pay reform could be part of it. Getting to a deal is going to be very difficult.  I speculate that to get pay reform into a deal backers would likely go with: "We will make pay compression reform budget-neutral. We will increase executive compensation and detach all that from congressional salaries. But at the same time, we will compromise by reducing the number of these positions so we're not spending any more in the aggregate." Something like that. It is at least a possible way forward. 

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