House GOP Payroll Tax Plan Has Freeze for Federal Workers

The House GOP plan to extend the payroll tax deduction has some tough news for federal workers. The Republican plan would extend the current two-year wage freeze for federal workers another year to 2014, The Washington Post blog the Federal Eye reports

The proposal appears toward the end of the 24-page plan and also includes a 1.5 percent increase in federal employee pension contributions and changes in pension rules for new hires. The Congressional Budget Office estimates that extending the pay freeze would save taxpayers more than $26 billion in the next 10 years and the retirement changes over $36 billion, the Post reported.

National Active and Retired Federal Employees Association President Joseph Beaudoin said the changes in pensions amount to a 3 percent payroll tax on federal worker salaries. Colleen Kelley, president of the National Treasury Employees Union, called the House GOP plan outrageous and said it singles out “hard-working middle-class federal employees,” the Post reported.