Government affairs

Legislative Updates

Federal employee payfor on Highway Trust Fund rejected

With the Highway Trust Fund scheduled to run out of money on July 31, the House and Senate have been debating proposals to keep the fund afloat.

A coalition of postal and federal employees scored a major victory when a proposal from Senate Finance Committee Chairman Orrin Hatch (R-UT) sought to recycle a proposal—straight from the House Republican budget blueprint for Fiscal Year 2016—to cut the interest rate paid to investors inside the Thrift Savings Plan’s G Fund as a potential payfor on the Highway Trust Fund.

“We think it’s an ingenious way helping to pay for this,” Hatch said.

The NALC, along with the Federal-Postal Coalition (FPC) and the Employee Thrift Advisory Council (ETAC), wrote letters condemning the proposal, stating that it would unfairly tax the savings and reduce the retirement income of senior citizens, military personnel, and ordinary workers employed by the federal government.

Following extensive lobbying efforts, Senate Republicans agreed to withdraw the proposal from consideration.

In the Senate, lawmakers would like to extend highway and transit policy for six years, although senators have so far found only three years’ worth of funding offsets for it. Finding the money to pay for a long-term extension for the Highway Trust Fund has been the most difficult hurdle to overcome and has put federal employees’ benefits on the bargaining table once again.

The Senate plans to work through the weekend to advance their multi-year bill, and senators are now sifting through the remaining viable payfors.

Last week, the House opted for passage of short-term extension of the Highway Trust Fund, H.R. 3038, through Dec. 18, giving that chamber the time to consider long-term funding and policy.

“This debate shows that we must remain vigilant in our efforts no matter the subject, especially when it comes to looking at federal employees as a piggy bank,” NALC President Fredric Rolando said.

To read the FPC letter, click here. To read the ETAC letter, click here.

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