Sat Apr 26 16:00:00 UTC 2025: ## Proposed Federal Budget Cuts Spark Outcry from Federal Employee Union

**Washington, D.C. – April 23, 2025** – The National Active and Retired Federal Employees Association (NARFE) is sounding the alarm over proposed budget cuts that could significantly impact federal employee and retiree benefits. The House Oversight and Government Reform Committee is considering slashing approximately $50 billion from mandatory spending, with federal retirement and health benefits likely bearing the brunt of the cuts.

The committee’s framework, passed by a narrow margin (216-214), includes several controversial proposals which NARFE vehemently opposes. These proposals, while still subject to change, include:

* **Shifting the Federal Employees Health Benefits (FEHB) program from a premium-share model to a voucher model:** This would drastically reduce the government’s contribution to health insurance premiums, potentially increasing costs for employees and retirees by thousands of dollars annually. NARFE argues this would shift a disproportionate share of healthcare costs onto federal employees, exceeding what their private-sector counterparts pay.

* **Eliminating the Thrift Savings Plan (TSP) G Fund subsidy:** This would force federal employees to shift their retirement savings into potentially less lucrative investment options, potentially jeopardizing their retirement security. NARFE claims this constitutes a breach of fiduciary duty.

* **Increasing the Federal Employees Retirement System (FERS) contribution rate:** Raising the contribution rate to 4.4% would effectively amount to a pay cut for already underpaid federal employees, further hindering recruitment and retention efforts.

* **Converting new employees to at-will employment unless they accept a higher FERS contribution:** NARFE argues this undermines the merit-based civil service system.

* **Charging fees for Merit Systems Protection Board (MSPB) appeals:** This would make it more difficult for employees to challenge potentially illegal or politically motivated actions.

* **Altering FERS retiree benefit calculations:** Basing retiree benefits on the “high-5” instead of “high-3” salary average could drastically reduce benefits for many vested employees, including those nearing retirement.

* **Eliminating FERS supplemental retirement payments:** This would leave retirees who retire before Social Security eligibility facing significant financial hardship.

NARFE’s letter to Congress emphasizes that many of these proposals break promises made to federal employees and retirees regarding their earned benefits. While the final budget is not expected until later this spring or early summer, the organization is urging Congress to reject these damaging proposals. The potential impact on federal employees and retirees, and the overall implications for the federal workforce, remain a serious concern.

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