NALC – 5/24/17 – On May 23, the White House released its Fiscal Year 2018 budget proposal as a follow up to the “skinny budget” released in March.
The $4.094 trillion request, titled “A New Foundation for American Greatness,” proposes job-killing delivery service cuts at the U.S. Postal Service and calls for massive federal spending reductions over 10 years, including major cuts to federal and postal employee pension benefits. The controversial budget, which is not binding on Congress and serves only as a declaration of the administration’s spending priorities, was immediately declared “dead on arrival” by leaders of both parties.
For active federal and postal employees covered by the Federal Employees Retirement System (FERS), the budget calls for gradually equalizing employee and agency contributions for pension benefits. This would cut our pay and raise our pension contributions by 1 percent of pay per year for up to six years, costing active carriers up to $3,600 annually after six years. (The actual impact would depend on when FERS employees are hired: Letter carriers hired before 2013 now pay 0.8 percent, while letter carriers hired after 2013 pay 3.1 percent or 4.4 percent, depending on their exact date of hire. The FERS contribution rate, which would eventually be split 50-50 for all letter carriers under this budget proposal, now stands at 14.5 percent.)
For retirees, the administration’s budget calls for completely eliminating cost-of-living adjustments (COLAs) for current and future annuitants under FERS (which covers any employee hired after 1984). For those under the Civil Service Retirement System, COLAs would be reduced by one-half of 1 percent (that is, 0.5 percent) each year. These changes would devastate the finances of retirees who rely on annual COLAs to keep up with the cost of living.
The pension cuts don’t stop there. The budget also calls for reducing CSRS and FERS pension benefits for new retirees by basing annuities on workers’ highest average pay over five years (high-5) instead of over three years (high-3). It would also eliminate the “Social Security supplement” that covers the gap for workers who retire under FERS before they qualify for Social Security benefits at age 62. For letter carriers and other blue-collar federal employees with physically taxing jobs, this cut would be especially painful.
“It is unfortunate and disappointing that the administration would so recklessly attack the livelihoods of active and retired federal retirees who have devoted their lives to our country,” NALC President Fredric Rolando said. “NALC will vigorously fight any budget proposal that attacks our members or the Postal Service.”
“The biggest losers from President Trump’s draconian cuts to federal employee pay and benefits will be the American people who count on dedicated federal employees to care for our veterans, maintain our national parks, and process Social Security checks each and every day,” said Rep. Gerry Connolly (D-VA). “Cuts of this magnitude will make it impossible to recruit and retain the qualified workforce we need to meet our nation’s challenges.”
With regard to the Postal Service, the budget calls for $46 billion in vaguely defined cuts and revenue changes over a decade. It proposes reducing the frequency of delivery (presumably eliminating Saturday delivery) and scaling back door delivery. Rather than resolving the pre-funding burden, the budget seems to propose giving the Postal Service greater freedom to raise rates to cover future retiree health care costs. As a result, the administration’s postal proposals are certain to be opposed by all of the Postal Service’s major stakeholders, unions and mailers alike.
“Sadly, the new administration seems to have ignored the growing consensus in the mailing industry over ways to strengthen the Postal Service,” President Rolando said. “If enacted, the Trump proposals would threaten the long-term viability of the Postal Service and the huge industry it supports.
The budget plan breaks many of President Trump’s campaign promises to working families, including promises not to cut Medicaid and Social Security and to look out for so-called “forgotten Americans.”
Proposed budget cuts also include $616 billion from Medicaid and the Children’s Health Insurance Program (CHIP); $272 billion from the Supplemental Nutrition Assistance Program (SNAP) and the Temporary Assistance for Needy Families, among others; $143 billion from the federal student loan program for low-income college students; and $72 billion from Social Security disability programs. The proposed budget would slash the budgets of the Labor Department and the National Labor Relations Board (NLRB) by more than 20 percent, placing the rights of all working Americans at risk.
“We have seen promise after promise just broken, as if they didn’t even matter,” Senate Minority Leader Chuck Schumer (D-NY) said. “Candidate Trump campaigned as a populist, said he wanted to help the working people, but since he has taken office he has governed like a hard-right conservative—pushing policies that help the uber-wealthy at the expense of the middle class.”
The budget plan has expectedly received harsh criticism from Senate Democrats, but a number of Senate Republicans have taken to condemning it as well. Sens. John Cornyn (R-TX) and John McCain (R-AZ) suggested the budget was “dead on arrival.” Sen. Lindsey Graham (R-SC) called the budget “terrible.”
Combined with the administration’s tax cut proposal and its proposal to eliminate health insurance coverage for 24 million Americas by gutting the Affordable Care Act, the Trump budget and economic policy would effectively and massively shift public resources and income upward to the nation’s wealthiest families.
“That’s unacceptable and immoral,” President Rolando said.
It is important to note that Congress typically rejects much of what a president requests in a budget plan, and that administration proposals such as this one are frequently messaging statements to Congress. Ultimately, the budget process is controlled by members of the House and the Senate, who will determine whether to incorporate elements of the administration’s request. This makes it imperative for letter carriers to urge their representatives in Washington to reject attacks on the federal workforce or on the Postal Service and its networks.
NALC will resist any attempts by Congress to adopt any elements of the Trump budget that would target the Postal Service, its employees or its retirees.