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Cost of payroll tax holiday should not be paid for by federal employees

As the House of Representatives prepares for a final vote on the payroll tax holiday extension later today, the Republican majority has once again turned to federal employees to foot the bill for it. NALC has weighed in over and over with Congress on the inappropriateness of treating federal workers as the cash cow or “pay-for” for programs that most Americans are able to enjoy. NALC fully supports the extension of the payroll tax holiday while the economy continues to struggle, but certainly not on the backs of the federal workforce.

H.R. 3630, the “Middle Class Tax Relief and Job Creation Act of 2011,” extends the current 2 percent payroll tax cut for one year. The bill offsets the costs of these extensions in part by freezing federal employee pay for an additional year through 2013, and it would increase federal and postal employee pension contributions by 1.5 percent over three years, starting in 2013. It would kill the retirement supplement that is paid to federal workers in lieu of Social Security for those in FERS who retire before age 62. This would affect those FERS employees retiring in 2013 or after. New employees hired in 2013 with less than five years of previous federal employment would be hit even harder, paying 4 percent of salary toward retirement benefits instead of the current 0.8 percent while slashing benefit levels by up to 44 percent. (This is achieved by reducing the “years of service” credit from 1 percent to 0.7 percent per year and by basing your annuity on your highest five years of salary instead of the currently used highest three years of salary.)

This bill is irresponsible and unfair to federal workers. Please call your member of Congress as soon as possible — click here for a contact information list — and urge him or her to vote NO on H.R. 3630. Also, click here to read a Federal-Postal Coalition letter that was sent to Congress on this last week that provides more information.

The payroll tax holiday should not be paid for by federal employees!

In Solidarity,

Fredric V. Rolando, President
National Association of Letter Carriers

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