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Federal Workers Keep Eye On Looming Fiscal Cliff

Nov 19, 2012



This is TELL ME MORE from NPR News. I'm Celeste Headlee. Michel Martin is away. Coming up, the reelection of President Obama triggered a huge amount of racism on social media, particularly on Twitter. We'll talk about the psychology behind those tweets.

But first, on Capitol Hill, the countdown to the fiscal cliff continues. That's the term for the dramatic spending cuts and tax increases that will go into effect next year if Congress does not reach an agreement on deficit reduction. There's continuing debate about what going over that cliff would mean for the nation's economy. There's little doubt, though, that for federal workers, the impact would be extreme.

Joining us now to talk more about that is Joe Davidson. He's the Federal Diary columnist for The Washington Post.

Joe, welcome.

JOE DAVIDSON: Thank you.

HEADLEE: First of all, how many federal workers are there, in total, and what would happen to them if the country goes over the fiscal cliff, day one?

DAVIDSON: Well, there are about two million federal workers. That does not include postal workers, probably now another five or six hundred thousand. They've been cutting back, of course.

It's not exactly known yet what would happen if we fall over the fiscal cliff because we just don't know what shape that would be. Clearly, however, there would be cutbacks to budgets across the government and, when you cut budgets, that often means you cut personnel, so I think federal employees could expect to see workforce reductions. There are a number of proposals on the table and have been there for some time in order to save money based on the workforce, either extending the pay freeze they are already under - a freeze on basic pay rates - or adjustments and changes to their retirement program, which would require the federal employees to come out of their pocket more and Uncle Sam less.

And I think, in terms of the pay freeze, by the way, I think it's also worth mentioning that, really, federal employees are the only ones, so far, who've been directly targeted in all of these deficit reduction, budget reduction efforts through a pay freeze that started now almost two years ago.

HEADLEE: Well, what you're talking about are changes that have been made in federal workers' jobs and pay, regardless of what happens with the fiscal cliff. I mean, we're six weeks away from that deadline, but federal employees are already living with the deficit reductions that have gone on in the past, as you say.

What other things have changed in the way they're paid?

DAVIDSON: Well, the freeze on basic pay rates was scheduled to end in December or January one of next year, end of December this year, and that's a freeze on basic pay rates, but that now has been extended, at least through March, and it's possible that that could be extended even further. So that's one example. And that's worth about $60 billion over 10 years. Another $15 billion has come through changes to the way retirements will be calculated. And, by the way, that $60 billion over 10 years now will be - that will even a greater sum the federal employees will contribute to the deficit reduction cost, that pay freeze has been extended, at least through March and so I don't know exactly the total figure there, but it clearly is going to be - the total amount that federal employees will have contributed is certainly going to be closer to $100 billion over 10 years.

And there are other proposals along these lines, extending the pay freeze even more.


DAVIDSON: The budget that the House Republicans have already passed calls for it to be extended for a total of five years.

HEADLEE: Yeah. We won't know the extension until we see a budget deal, if we get one. If you're just joining us...

DAVIDSON: Exactly.

HEADLEE: ...you're listening to TELL ME MORE from NPR News. I'm Celeste Headlee. We're talking about how the fiscal cliff could affect the federal workforce. Our guest is Joe Davidson. He writes the Federal Diary column for The Washington Post and I think a lot of Americans, Joe, assume that this is a Washington-specific, Washington regional problem because that's where most federal workers live. Is that accurate?

DAVIDSON: No. As a matter of fact, only about 15 percent of federal workers are in the Washington, D.C. area, so obviously, that means 85 percent of them are elsewhere and federal employees like to point that out because federal employees are in every state and every congressional district, and so what hits federal employees is going to hit people all over the country.

HEADLEE: And let's talk, then, about the rest of the country who's not one of these two million federal workers. Will the cuts to federal workers pay in their hours, will that affect other people?

DAVIDSON: Well, it clearly can affect people in terms of services. If you cut back the number of employees you have, you're probably going to, in some place, cut back on services.

For example, the Social Security Administration wanted to cut back - and has cut back - on employee overtime. Well, the way it did that was to reduce the hours that the Social Security offices - now, these are offices all across the country, not just here in Washington - but reduce the hours that those offices are open to the public. So that's an example of - fewer hours available to the public means less service, in a sense, less opportunity for citizens to get service from the Social Security offices, but it was done in order to reduce overtime among Social Security employees.

And so I think it is important to note that whatever affects federal employees is likely to affect the amount of service that the regular citizen gets, particularly if you're talking about a cutback in workforce, cutback in hours that offices are open to the public.

HEADLEE: So, I mean, obviously, they must not be waiting until the last minute. Are federal agencies already preparing for this possibility of going over the cliff?

DAVIDSON: When we ask about that, we - it's curious to us, really, but they don't seem to be. I mean, we kind of think they really are, but they don't tell us what they're doing, because everybody seems to be working on the assumption that they really aren't going to go over the fiscal cliff.

HEADLEE: Optimists, all of them.

DAVIDSON: Really, right. I mean, it seems like they should be planning for that and I kind of have a feeling that they are, but they won't discuss those plans. I guess they don't want to jinx the talks.

HEADLEE: Joe Davidson is the Federal Diary columnist for The Washington Post. He joined us from their studios.

Joe, thank you so much.

DAVIDSON: Thank you very much.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.