House Republicans have advanced a series of proposals attempting to cut costs by reducing the value of federal retirement annuities, increasing contributions into the government’s retirement system, and requiring federal employees to decide between taking a reduced paycheck or keeping their civil service protections.
In a Wednesday markup of the Oversight and Government Reform Committee, Republicans voted to push forward with six proposals to be included in the GOP’s budget reconciliation package. If adopted into the final version of the legislation, the proposals would make the following changes:
- Raise the Federal Employees Retirement System (FERS) contribution rate to 4.4% across the board
- Eliminate the FERS annuity supplement for all federal employees, except those in occupations subject to mandatory early retirement
- Change the FERS annuity calculation from “high-3” to “high-5” of an employee’s salary
- Make all new federal employees “at-will” unless they accept an additional 5% FERS contribution
- Charge federal employees a $350 fee to file an appeal with the Merit Systems Protection Board
- Require an eligibility audit of all Federal Employees Health Benefits (FEHB) enrollees and remove any ineligible participants from the program
GOP committee members did exclude one earlier possibility for changing federal benefits. A proposal to convert the government’s FEHB contributions to a flat-rate “voucher” model was taken off the table for the reconciliation package.
Oversight Republicans also voted down a number of proposed amendments from Democrats during the markup that sought to limit the impacts of the federal benefits changes. The legislation now heads to the House Budget Committee for further consideration.
The proposals advanced in a vote mostly along party lines — with one exception. Rep. Mike Turner (R-Ohio) voted against the GOP package of proposals to change federal benefits.
“I will be opposing this committee’s bill today. I do not believe that this bill represents Republican values, and I don’t believe that it represents American values,” Turner said during Wednesday’s markup. “I believe that making changes to pension retirement benefits in the middle of someone’s employment is wrong. Changing the rules — especially when someone has already been vested in their benefits — is wrong.”
Turner also cast doubt that the provisions on federal benefits would end up in the final version of the reconciliation package.
“I have talked to enough people on the House floor that I do not think this will be included in the final bill,” Turner said. “This bill will have to be changed if it’s going to be included in the ultimate budget reconciliation.”
Committee Republicans in favor of the changes, however, aim to save $50 billion over 10 years by weakening federal benefits and retirement. A large portion of those savings — about $30 billion — would come from pushing all federal employees up to a 4.4% FERS contribution rate, according to an analysis document from GOP committee lawmakers. Republicans also are looking to save about $4.5 billion by pushing all new federal employees to decide between losing their civil service protections or otherwise accepting a cut to their take-home pay by way of an even higher FERS contribution rate.
Republicans said another $4.8 billion would be saved by changing the federal annuity calculation to be based on the highest five consecutive years of an employee’s salary, rather than the current calculation based on the highest three consecutive years of earnings. The “high-5” provision would apply to any federal employee who retires after Jan. 1, 2027.
The American Federation of Government Employees harshly opposed Republicans’ desired changes. In a letter to the committee, the federal union pointed to what would be a relatively limited amount of generated savings within the larger context of the reconciliation package.
“Cutting federal employee benefits and weakening workplace rights will not come close to offsetting the $4.5 trillion cost of tax cuts over 10 years,” AFGE acting Legislative Director Daniel Horowitz wrote in a letter to the committee. “Perhaps paying for tax cuts is not the primary intent of the committee’s proposals but rather to make the prospect of working for the federal government so unattractive as to drive from executive branch agencies experienced and dedicated employees.”
But during Wednesday’s markup, Oversight Committee Chairman James Comer (R-Ky.) said the proposals included in the reconciliation bill align with the Trump administration’s broader vision for the federal workforce.
“Congressional procedure, precedent and tradition too often contribute to an ever-expanding federal government, while too little is done to shrink the administrative state or make the federal bureaucracy more efficient,” Comer said. “The Oversight committee is empowered to pursue civil service reforms, including federal employee benefits, and rein in the influence of partisan and unaccountable government employee unions.”
Comer also pointed to an April 2024 Congressional Budget Office report, which estimated that the cost of benefits for federal employees is 43% higher than it is for private sector workers.
“The simple truth is that a significant amount of the costs associated with all of these benefits are funded by hard working taxpayers in the private sector,” Comer said.
The same CBO report, however, also found that federal employees’ wages are 10% less, on average, than wages for employees in the private sector. Other estimates from the Federal Salary Council have calculated an even greater disparity, finding that federal salaries fell an average of nearly 25% below private sector earnings last year.
In a letter to the Oversight committee admonishing the proposals, the National Treasury Employees Union pointed to that large wage gap between the federal and private sectors, as well as FEHB premiums that rose by an average of 13.5% for feds in 2025. NTEU National President Doreen Greenwald said the proposed cuts to federal pay and benefits would be “devastating.”
“Federal employees have already paid their fair share and tightened their belt,” Greenwald said. “Yet Congress keeps coming back for more, even amid widespread firings, deferred resignations and ongoing threats to career civil servants.”
Democratic lawmakers, including Rep. Melanie Stansbury (D-N.M.), also harshly opposed the series of proposals on federal benefits.
“Our committee’s jurisdiction is overseeing the federal government, so this committee has been instructed through those resolution instructions to cut funding to supposedly offset costs,” Stansbury said during the committee markup. “And where are they trying to find those cuts? They’re trying to find those cuts on our federal workers’ backs.”
“A particularly egregious provision in the bill would force any newly hired federal employee to accept at-will employment with no protections, or face an additional 5% retirement contribution on top of the 4.4% already required,” Rep. Stephen Lynch (D-Mass.), the committee’s acting ranking member, said. “Federal workers who choose to remain under the merit-based system with employment protections, would be forced to contribute nearly 10% of their paycheck towards retirement at the same time that we’re actually reducing the amount of that retirement.”
The National Active and Retired Federal Employees Association (NARFE) also expressed deep concerns about many of the proposed federal benefits changes, including those looking at altering retirement calculations. The organization said that switching the annuity calculation from the highest three consecutive years of a fed’s salary to the highest five consecutive years would result in decreased retirement payments for many.
The proposal “would reduce the value of earned retirement benefits for individuals on the brink of retirement,” NARFE President William Shackelford wrote in a letter to the committee. “Such individuals have fulfilled their service to this country, and now this committee is aiming to roll back a portion of the compensation that was promised to them in exchange for such service.”
