Federal Employee Items in FY '17 Budget Request

President Obama’s budget recommendation for fiscal year (FY) 2017, which was formally released recently, includes an average 1.6% pay raise for both federal civilian and military personnel.  The proposed 1.6% pay adjustment for General Schedule federal employees would be effective January 2017. 

NTEU views a 1.6% raise as far too low, particularly given recent pay trends in the private sector and because of the lost ground in overall federal employee pay owing to the three-year pay freeze, followed by three years of below-market pay increases.  In recent years, Congress has allowed the administration’s proposed pay plans to take effect, though Congress could decide to act during this year to set a higher, lower, or even block a federal employee pay raise entirely for 2017.  NTEU is working with federal employee-friendly members of Congress to help secure a higher and more reasonable pay increase for 2017.

In terms of NTEU-supported proposals, the White House’s budget proposes granting the Office of Personnel Management (OPM) the authority to directly contract with pharmacy benefit managers (PBMs) under the Federal Employees Health Benefits Program (FEHBP).  Currently, individual health insurance plans contract with the PBM of their choice, resulting in any savings and discounts flowing to the insurers rather than back to enrollees through lower insurance premiums.  This health care proposal requires congressional action, and is supported by NTEU as an effective way to help rein in FEHBP pharmaceutical costs.  A new FEHBP item proposed in the budget request would extend FEHBP coverage for 30 days to the infants of covered daughters of any FEHBP enrollee.

Additionally, the FY17 budget includes the President’s support for six weeks of paid parental leave for federal employees, which also requires legislative action from Congress.  NTEU supports paid leave for parents, which is increasingly needed by agencies for recruitment and retention purposes as private sector employers expand this benefit.

There are no proposals regarding any changes to civil service retirement programs in the President’s budget.

It is anticipated that House and Senate congressional leadership will not enact many of the items contained in the budget request, and will instead begin to move their own proposals over the next few weeks which could contain anti-federal employee initiatives.  We will keep you updated on these developments as Congress enters its annual budget and appropriations season.