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Letter to Rep. Jose Serrano - AFSCME Urges Decent Pay and Benefits for Federal Employees

      March 14, 2007

The Honorable José Serrano
Chairman
Subcommittee on Financial Services and General Government
Committee on Appropriations
U.S. House of Representatives
Washington, DC 20515

Dear Mr. Chairman:

On behalf of the 1.4 million members of the American Federation of State, County and Municipal Employees (AFSCME) and the thousands of federal employees that we represent, I am writing to urge you to reject the President's proposed changes to the Federal Employees Health Benefits Program (FEHBP) and the 3 percent pay raise proposal.

The President's budget would make changes to FEHBP that would reduce the subsidy that the government provides for retiree health care costs.  Currently, federal employees who retire with five years of continuous service receive the same subsidy as they did while they were employed.  Under this formula, the government pays about 70 percent of the health insurance premium.

The budget proposal would require employees to have 10 years of government service for the government to pick up 70 percent of the premium.  Furthermore, the government would pay only half of the subsidy, or 35 percent, on behalf of those with only five years of service and would phase in higher contributions for those with more than five but less than 10 years of service.

 In addition to these health benefit changes, the President's proposal would provide only a 3 percent pay increase for federal employees.  The Administration's proposed 3 percent federal pay raise for 2008 is inadequate compensation considering the 2.3 percent increase in 2007, which was the lowest in 18 years.  These increases will do nothing to close the continuing gap between private sector and federal pay.  AFSCME urges the Subcommittee to reject the President's proposal and to provide for a 3.5 percent pay raise in 2008 for both federal civilian employees and members of the military.  The federal government is expected to experience a mass of retirements in the near future, and it does not make sense to continue to depress federal employee wages.  To attract and retain our nation's best federal workforce, we must invest in decent pay and benefits.  

 I urge you to consider the dedication and hard work of federal employees as you consider the President's budget requests and ask you to reject these proposals.

      Sincerely,
      Charles M. Loveless
      Director of Legislation

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