Washington, D.C. — United States Senator Daniel K. Akaka (D-Hawaii), Chairman of the Senate subcommittee on the federal workforce, delivered a speech on the Senate floor today highlighting an unfair provision in the payroll tax conference agreement which taxes future middle class federal workers to pay for an extension of unemployment insurance, while millionaires and billionaires continue to enjoy a low tax rate.

As of September 2011, there were 25,628 federal employees in Hawaii, not including postal workers, according to the Office of Personnel Management.  The proposal approved today would affect future hires. 


Senator Akaka’s remarks as prepared for delivery:

I am reluctantly supporting the conference agreement because it is absolutely essential that we extend the payroll tax holiday and unemployment insurance benefits. 

The stakes are too high for us to do otherwise, for our economic recovery and for millions of Americans struggling to make ends meet.  We cannot abandon them, or reverse progress, during this difficult time. 

However, I strongly oppose the decision to pick the pockets of federal workers yet again, just to offset the costs of 10 months of unemployment insurance benefits.  I am not opposed to offsetting the costs, but I believe that shared sacrifice is essential, and a simple matter of fairness and decency. 

Unfortunately in this agreement, once again, rather than asking millionaires and billionaires to pay their fair share of taxes, some of my colleagues insisted on taxing America’s dedicated middle class public servants.

Future federal employees will be required to pay an additional 2.3 percent of their incomes toward their pensions.  That means most employees will pay a total of
3.1 percent of their salaries, in addition to the 6.2 percent they pay for their Social Security retirement benefits. 

This agreement effectively lowers the federal pay scale by 2.3 percent going forward, and this comes after federal wages already have been frozen for two years. 

Under this agreement, future congressional employees – all of our staffs – who often work long hours for us and are underpaid, will pay more toward their pensions at the same time as we cut their pension benefits by more than one third.  These are permanent changes made to fund just 10 months of unemployment benefits.  Not a good investment in our nation’s future.

Some of my colleagues would have you believe that federal employees are overpaid.  That is simply not true.  In many critical fields, the federal government struggles to compete with the private sector to recruit and retain the skilled people our nation needs: experts in cybersecurity and intelligence analysis, doctors and nurses to care for our wounded warriors, accountants to protect taxpayers during billion dollar defense acquisitions. These are just a few examples.  

Federal employees handle incredibly complex work.  On paper, an analyst might compare the salary of a nuclear submarine mechanic to a car mechanic.  We all depend on the important work car mechanics do.  But clearly we need to recruit the most sought after mechanics to be our nuclear sub mechanics, and we need to pay them enough to retain them. 

As the income gap in this country widens and so many hard working Americans face increasing economic insecurity, I am proud that the federal government still pays most employees a living wage. 

Many private sector employers are scaling back or eliminating pensions.  Just this week, General Motors announced plans to suspend pension benefits for nearly twenty thousand employees who have been with the company for more than ten years. 

Long-term, this unfortunate trend will rob millions of Americans who have worked hard all of their lives of the secure retirement they earned and deserve.  This trend, tragically, is bound to increase poverty among senior citizens in coming years.  

Some of my colleagues want to follow the private sector and eliminate or dramatically reduce the federal pension.  Today, with this conference agreement, we are unfortunately taking the first step in that direction.  But I call on my colleagues to prevent the federal government from joining this race to the bottom. 

I fear this short-sighted attack on federal workers will repeat itself.  Every time we need an offset to fund anything, I expect there will be another proposal to cut federal pay, pensions, or other benefits.  We must stop here.

It is our job to protect all Americans? economic security.  We should focus on creating private sector jobs that pay living wages, rather than disparaging public servants.  And, we should focus on ensuring that all Americans who work hard for decades have a secure retirement, rather than cutting the pensions of those who choose to honorably serve their country.