Payroll-Tax Deal Faces Fresh Hurdle

Republican and Democratic conferees alike are calling for more urgency in reaching a deal by the end of next month for a yearlong extension of the payroll-tax holiday and unemployment benefits and preventing a cut in reimbursement rates for Medicare doctors.

But the resurrection of an effort this week by House Republicans to target federal workers’ pay as part of the fight over how to pay for the $160 billion package has emerged as yet another obstacle to any agreement.

Washington-area lawmakers—including Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee and a member of the House-Senate Conference Committee negotiating the package—are determined to keep proposals that eye federal workers’ pay or benefits from being included.

But on Wednesday, the same day conferees are to gather for their second public session, the House has scheduled a floor vote on a bill that would extend a freeze now in place through December on the salaries of nonmilitary federal employees for another year, through 2013.

“Republicans refuse to ask the very wealthy to share in the effort and instead insist on using federal employees as a scapegoat,” said Van Hollen, whose district is home to thousands of federal workers.

The pay-freeze bill, sponsored by freshman Rep. Sean Duffy, R-Wis., comes even though President Obama intends to propose in his upcoming budget a 0.5 percent salary increase next year for federal civilian workers, who have seen their salaries frozen since 2010.

In a statement on Monday, Duffy emphasized that members of Congress also would continue to see their pay frozen under his bill. But, he added, “While private-sector workers face the squeeze, and millions of families continue searching for work, the idea of asking that their hard-earned tax dollars go to fund a pay raise for government employees is just not right.”

Meanwhile, other Republicans sought to justify such a move by citing a Congressional Budget Office report released on Monday that shows the federal government pays 16 percent more in total compensation than the private sector.

Upon closer inspection, however, it is uncertain whether the report provides clear ammunition for Republicans to keep federal-worker salaries frozen. For example, the congressional auditors found that in terms of pay, the federal government paid 2 percent more in total wages between 2005 and 2010 than it would have if average wages had been comparable with those in the private sector. But there are wide differences among federal workers with varied education levels. For instance, federal workers with a professional degree or doctorate earned about 23 percent less, on average, than their private-sector counterparts.

In terms of total compensation—the sum of wages and benefits—CBO found federal civilian employees with no more than a high school education averaged 36 percent higher total compensation than similar private-sector employees. But federal employees with a professional degree or doctorate received on average 18 percent less in total compensation than their private-sector counterparts.

Even so, Wednesday’s House vote on extending the federal employee pay freeze through 2013 is being placed on the “suspension calendar,” meaning no amendments can be offered, debate will be limited, and two-thirds of those members present must agree for it to pass.

Republicans appear to be daring Democrats to vote against it.

Against such maneuvering, House-Senate conferees seeking to work out the particulars of extending the payroll-tax holiday and the other components of the package before they expire at the end of February are voicing similar calls for a need to work swiftly.

Senate Minority Whip Jon Kyl, R-Ariz., even said on Monday that he was concerned about the lack of “a sense of urgency” in the talks.

“We do have a time deadline here,” Kyl told reporters.

But one side’s extraneous issue may not be the other’s. For instance, Kyl cited Democratic demands for provisions like a surtax on incomes of more than a million dollars a year—a position both sides recognize Republicans will not accept—as the type of thing the conferees need to quickly move past. At the same time, Kyl did not embrace or rule out a push by Republicans to include language to force construction of the Keystone XL pipeline, saying “there are certainly Republicans who would like to see Keystone 2, or whatever you want to call it, as part of this.”

1 comment (Add your own)

1. Danilo wrote:

Mon, February 20, 2012 @ 2:30 PM

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