President Trump’s FY18 Budget Request: A Race to the Bottom

President Donald Trump unveiled his Administration's fiscal year 2018 (FY18) budget request on Tuesday, May 23rd. 

The Federal Managers Association (FMA) immediately voiced significant concerns with the proposal, as it negatively targets the retirement packages of all current, retired, and future federal employees. FMA understands difficult choices need to be made, but views this proposal as an unacceptable setback. National President Renee Johnson called it a “slap in the face.”

Of course, the president’s budget request is not the final product to be implemented by agencies. In fact, Senator Jon Cornyn (R-TX) referred to the president’s budget proposal as “dead on arrival.” The U.S. House and Senate have begun work in earnest on FY18 appropriations, which will determine how the next fiscal year is funded. However, President Trump will have to sign whatever Congress ultimately passes into law, and Trump’s request, titled “A New Foundation for American Greatness” presents the president’s priorities in hard numbers. So it is important to take the document seriously.

President Trump’s FY18 budget request includes enormous cuts to federal employee retirement benefits by raising employee contributions one percent a year for six years. It also eliminates cost of living adjustments (COLAs) for all FERS employees, cuts CSRS COLAs, shifts the calculation of retirement benefits from the highest three years to the highest five, and eliminates the FERS early retirement supplement. In addition, the proposed budget eliminates the public service loan forgiveness program as well.

FMA called the increases to employee contributions a broken promise and a titanic tax increase on hard working public servants. In a statement, Johnson said, “It is duplicitous to claim a campaign promise to not touch retirements, then tout cuts to feds’ retirement as one of the top four ways to save money in this request.” Johnson slammed the planned cuts and elimination of COLAs, and expressed grave concern about the proposed change to retirement calculations (high 3 to a high 5). “Beyond hurting current and retired feds, the federal workforce is already facing momentous challenges in recruitment and retention. Broken promises and further cutting of benefits will only make the task of attracting the best and the brightest even more difficult,” Johnson said. This jeopardizes the future of congressionally-mandated missions and services provided by the federal workforce.

FMA noted and supports the Administration’s push for a 1.9 percent raise as recognition of the outstanding work performed by our federal workforce. We are also grateful that the proposal does not voucherize the Federal Employee Health Benefit Program (FEHBP) or make any other changes to these health benefits. Regrettably, the cuts to retirement benefits vastly outweigh these aspects.

We understand these dramatic cuts are better than a complete elimination of the retirement program federal employees have been promised. However, the federal government should not engage in a race to the bottom, and the federal budget must not be balanced on the backs of federal employees. Instead, it should continue to strive to be a model employer. As Johnson concluded, “The American public deserves a federal workforce that receives the resources it needs to provide the services our citizens count on, and this budget request, as proposed, does not deliver that. FMA urges Congress to work with the Administration to develop a spending plan that allows for a sustainable federal workforce.”

The views reflected in this column are those of FMA and do not necessarily represent the views of FEDmanager. To learn more about the Federal Managers Association (FMA), visit their website: FedManagers.org.