Federal Pay and Benefits in Crosshairs as House Advances Budget, Reconciliation Set to Begin

Congress took a major step forward in enacting President Trump’s legislative agenda, although hard decisions remain in the weeks ahead. The House passed the Senate’s budget blueprint, unlocking the door to start the reconciliation process. 

House Speaker Mike Johnson (R-LA) was able to get hardline conservatives on board, who were initially upset that the Senate version called for a minimum of only $4 billion in cuts, while the House version wanted at least $1.5 trillion. 

However, a news conference that Speaker Johnson held with Senate Majority Leader John Thune (R-SD), allayed some of those fears and got the hardliners on board.

During the news conference, Senator Thune said the Senate was “aligned with the House in terms of what their budget resolution outlined in terms of savings.”

The measure was adopted on a 216-214 vote. Republicans Thomas Massie of Kentucky and Victoria Spartz of Indiana voted against the measure. 

Next Steps

By passing the framework, Republicans can move forward in crafting a package that is in line with levels proposed in the budget resolutions. Key issues to decide will be spending cuts, how long the Trump tax cuts will be extended for, whether the cap on the state and local tax deduction (SALT), should be lifted, and more. 

However, a potential sticking point is Medicaid. Moderate Republicans are demanding that a portion of the $1.5 trillion in cuts do not come from Medicaid. 

“We just wanted to be clear, again, with the Speaker, as we’ve had numerous times before, that we will not vote for something that strips benefits from seniors and our vulnerable population that rely on traditional Medicaid services,” said Representative Nicolle Malliotakis (R-NY). 

And House Budget Committee Chairman Jodey Arrington (R-TX), said there will be close coordination with Senate colleagues. 

Federal Groups React

Federal groups expressed opposition, as the budget blueprint calls for the House Oversight and Government Reform Committee to cut spending by $50 billion over ten years.

Options to meet that number include cutting pay of employees hired before 2014 by increasing their retirement contributions, eliminating Federal Employees Retirement System (FERS) supplemental benefits, and reducing health care costs by turning federal health insurance into a voucher program. 

The Federal Law Enforcement Officers Association (FLEOA) notes that these are only proposed cuts and are not law. It told members that “we are fighting each day to ensure that whatever cuts the House Oversight Committee proposes, it does not impact your pay and retirement status or benefits.”

“This fight is not yet over. Federal retirees and employees can make a difference by voicing their views to their elected representatives and senators,” said NARFE President William Shackelford.