OPTIONS FOR REDUCING THE DEFICIT: 2014 TO 2023
|(Billions of dollars)
|Change in Revenues
Note: This option would take effect in January 2014.
The federal government provides most of its civilian employees with an annuity in retirement through either the Federal Employees Retirement System (FERS) or its predecessor, the Civil Service Retirement System (CSRS). Those annuities are jointly funded by the employees and the federal agencies that hire them. About 85 percent of federal employees participate in FERS, and most of them contribute 0.8 percent of their salary toward their future annuities. The Middle Class Tax Relief and Job Creation Act of 2012 increased the contribution rate to 3.1 percent for most employees hired after December 31, 2012. Federal employees who are still covered by CSRS generally contribute 7 percent of their salary and accrue larger annuities. Agency contributions for FERS and CSRS do not have any effect on total federal spending or revenues because they are intragovernmental payments, but employee contributions are counted as federal revenues. (Annuity payments made to FERS and CSRS beneficiaries represent federal spending.) Continue reading “CBO —Option 36 Increase Federal Civilian Employees’ Contributions to Their Pensions”
By Brianna Ehley December 6, 2013 4:45 AM
The clock is ticking on the Congressional Budget Conference Committee, which only has eight days left to cobble together a budget before the Dec. 13 deadline. And though lawmakers have signaled that they are close to a deal, nothing is certain.
Budgeteers in both parties are aiming for a deal that cancels the second wave of sequester cuts authorized under the Budget Control Act of 2011. To undo those cuts, they’ll have to find savings in other areas. Some potential elements in the emerging deal include raising federal employees’ contributions to their pension funds, or having the Federal Communications Commission auction rights to electromagnetic spectrum, according to congressional aides.
Related: Enter New Budget Deal, Exit Loathsome Sequester
As difficult as it may be for Republicans and Democrats to agree on a narrow package to replace the sequester cuts, much more difficult choices lay ahead. As the Congressional Budget Office put it in a report released last month: “To put the federal budget on a sustainable long-term path, lawmakers would need to make significant policy changes—allowing revenues to rise more than would occur under current law, reducing spending for large benefit programs to amounts below those currently projected, or adopting some combination of those approaches.” Continue reading “Federal Budget: 10 Cuts That Would Save the Most”