Obama budget would have big impact in Md.

Federal employee unions are opposed, but some agencies benefit

April 10, 2013|By John Fritze, The Baltimore Sun

WASHINGTON — — Labor unions representing federal employees reacted angrily to the $3.8 trillion budget unveiled Wednesday by President Barack Obama, who proposed trimming $20 billion from federal retirement benefits — reopening a debate many Democrats felt had been resolved last year.

The 2014 spending plan — which arrived months late — would reduce annual budget deficits by an additional $1 trillion over a decade, according to the administration's estimates; raise the federal minimum wage to $9; curb Social Security spending; increase the federal cigarette tax and close tax loopholes the Obama administration has pursued for years without success.

For Maryland, the proposal would increase the administrative budget at Woodlawn-based Social Security by 7 percent to $12.3 billion to improve enforcement of disability eligibility requirements — an effort the White House said would ultimately save money. And the administration repeated calls for a 1 percent pay increase for the federal workforce.

"For years, the debate in this town has raged between reducing our deficits at all costs, and making the investments necessary to grow our economy," Obama said in a Rose Garden address. "And this budget answers that argument, because we can do both.  We can grow our economy and shrink our deficits."

But Obama's budget, which is unlikely to gain traction in this politically divided Congress, also asks federal workers to increase contributions to their retirement plans by 1.2 percentage points.

The White House floated the idea last year, and lawmakers, led by Democratic Sen. Ben Cardin of Maryland, struck a compromise to raise retirement contributions only for new hires.

Cardin said there is much he can support in Obama's budget, but said there are also provisions he found "very troubling," including those dealing with federal workers.

"We've fought these fights many times before and enough is enough already," Cardin said in a statement. "I urge President Obama not to give in to those who devalue public service and wish to ignore that these are real people with real families and communities who depend on them."

Maryland is home to more than 300,000 federal employees, who make up about one-tenth of the state's workforce. Labor unions representing some of those workers said that the increased contributions, if implemented, would come on top of a now three-year pay freeze and the potential for furloughs under the $85 billion in across-the-board spending reductions known as sequestration.

"It's clear today that Washington has abandoned federal employees," said National Federation of Federal Employees president William R. Dougan. "Though we applaud the president for requesting a 1 percent pay adjustment next year, it falls dramatically short of what is needed to keep hundreds of thousands of federal families above water."

Republicans on Capitol Hill have been panning the proposal for days as individual pieces leaked out. Rep. Andy Harris, a Baltimore County Republican, noted that the budget "never, ever balances" despite calls for new revenue.

"This budget is just more of the same from the president," Harris said. "at least he should have presented a budget that balances — and this doesn't."

Federal budgets — including those drafted by the president and both parties in Congress — are non-binding and generally have little impact on which programs ultimately receive funding. But they do represent a statement of priorities and they often influence negotiations when actual spending decisions are made later in the process.

Democrats on Capitol Hill cast Obama's budget as an attempt to reopen negotiations over a grand bargain on the nation's fiscal challenges. That as-of-yet elusive agreement could include an overhaul of entitlement programs such as Medicare as well as new revenues to stem the nation's spiraling budget deficits.

The budget calls for $600 billion in new revenues, including a 94-cent increase in the federal cigarette tax, which is now $1.01 per pack, as well as new taxes on the wealthy.

"While I have concerns with aspects of this budget, it is clearly an effort to meet the GOP halfway in order to end the budget gridlock," said Rep. Chris Van Hollen of Montgomery County, the top-ranking Democrat on the House Budget Committee. "It is time for Washington Republicans to demonstrate a willingness to get serious."

Liberal Democrats also pushed back on Obama's budget — specifically, a proposal to create a new inflation formula that would reduce Social Security benefits. The White House, which had proposed the idea before privately but not formally, said the change would save $230 billion.

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