Let’s Make a Deal: Congress, White House Reach Compromise to Raise Debt Limit, Avoid Default


Sunday evening, President Barack Obama and Speaker of the House John Boehner announced that a deal had been reached to raise the federal debt limit and avoid a catastrophic default. The deal, long rumored to contain provisions impacting federal retirement and compensation, included no immediate cuts to federal employee pay or benefits.

“Federal employees certainly breathed a sigh of relief when the deal was reached, but there is still ample reason for concern,” said NFFE National President William R. Dougan.

This does not mean that federal employees are out of the woods, however. As part of the deal, a bipartisan ‘super committee’ will be formed in Congress with the task of identifying another $1.5 trillion in savings by Thanksgiving. No word has been given yet regarding who will staff the committee, but it is known that it will be made of six Democrats and Six Republicans from both the House and Senate.

“We are relieved to see that federal workers were not singled out for cuts to their retirement security in this initial agreement,” said Dougan. “However, we suspect this idea will be resurrected by some of the super committee members, and we will be fighting these same fights all over again.”

Though the deal spares federal workers from immediate benefit reductions, the proposal also includes dramatic cuts to agency budgets over the long term. The framework issued by the negotiators calls for $900 billion in cuts over the next decade across federal agencies, including Defense, Homeland Security, and Veterans Affairs, among others. Over the next two budget cycles – 2012 and 2013 – the cuts will total $10 billion from current levels. The majority of the savings will come over the following eight years as legislators look for reductions in already cash-strapped agency budgets.

“The $900 billion in discretionary spending cuts will put a serious dent in federal agency budgets over the coming decade, leaving agencies and employees less resources to do the job the American people expect of them,” said Dougan.

The proposal must now be passed through both houses of Congress and receive the President’s signature before becoming law. Details on the package are sparse since the deal was reached at the eleventh hour. NFFE will continue to fight for federal workers as the compromise is advanced through Congress and new details emerge.

“We are ready to defend the modest pay and benefits that VA nurses and doctors, border patrol agents, food safety inspectors, and federal workers in many other trades and professions earn every day by serving the American people,” said Dougan.

Click Here to Read the White House Fact Sheet on the Compromise