NASCOE Legislative Update – Federal Retirement

Below is a legislative update from Hunter Moorhead, NASCOE Legislative Consultant, with information on the House and Senate actions regarding federal retirement benefits and other budget actions. Please distribute widely to membership:


The US Senate has completed Committee consideration of the 2018 Budget Resolution. I’m pleased to report that it doesn’t include language impacting Federal retirement benefits. The full Senate is expected next week to consider the Committee’s budget resolution.  Following adoption by the full Senate, House and Senate negotiators will conference the two resolutions. At that point, the House will insist on including the retirement cuts and the provision will be negotiated between the two bodies.

BACKGROUND INFORMATION

President’s Budget:

On May 23rd, 2017, President Trump announced the Administration’s proposed FY 2018 budget request. In this request are proposals to make significant changes to the Federal Employees Retirement System and the Civil Service Retirement System. Included in the changes are:

  • Cost-of-living allowances for current and future FERS retirees eliminated.
  • COLAS for CSRS retirees would be reduced by 0.5 percent each year.
  • FERS employees would see employee contributions to their annuities increased by one percent each year for the next six years, without any corresponding benefit increase.
  • The FERS annuity supplement would be eliminated for new retirees starting in 2018.
  • Federal pensions would be based on the average of the highest five years of salary instead of the highest three.

Following the President’s FY 2018 request, the CBO argued that these changes would better align federal practices with those in the private sector through:

  • Basing pensions on five-year average earnings.
  • Many employers not offering health insurance benefits for retirees.
  • Many companies shifting from lifetime annuities to defend contribution plans that require smaller contributions from employers.

However, the CBO also noted that these changes would lessen the attractiveness of the overall compensation package provided by the federal government, potentially affecting the ability to attract and retain a highly-qualified workforce. Additionally, under the President’s proposed changes, positions requiring professional and advanced degrees may become harder to fill, private-sector counterparts already provide a higher compensation to comparable federal government positions.

Under the current budget circumstances and within the current political situation, it will be difficult for the President’s proposed changes to become reality. The President’s budget request is the first step in a long process to actually forming the budget.

House Budget:

On July 19th, 2017, the House Budget Committee approved their FY 2018 Budget 22-14. At this time, the House of Representatives has not yet scheduled floor or full House consideration of their Committee proposal.  However, Speaker Ryan has publicly stated that the House will consider the budget in September.

The House FY 2018 budget instructions dictate that the Committee on Oversight and Government Reform to submit changes in laws within its jurisdiction sufficient to reduce the deficit by $32 billion for the period of fiscal years 2018 through 2027. The House FY 2018 budget includes measures affecting changes to federal government retirement practices, including ending the supplement only for future retirees, how much to raise the required contribution, over how long a period, and whether it would apply to all employees, to reach this required $32 billion savings over the next 10 years.

The Budget committee report includes the language, “Reform Civil Service Pensions. The policy describes in the Income Support, Nutrition, and Related Programs section of this report would increase the share of Federal retirement benefits funded by the employee. This policy has the effect of reducing the personnel costs for the employing agency. The budget assumes savings from a reduction in agency appropriations associated with the reduction in payments that agencies make into the Civil Service Retirement and Disability Fund for Federal employee retirement.”

Additionally, the Report includes the following policy statement on the same, “Reform Civil Service Pensions. This budget adopts a policy proposed by former President Obama’s National Commission on Fiscal Responsibility. The policy calls for Federal employees, including members of Congress and staff, to make greater contributions toward their own defined benefit retirement plans. It would also end the ‘‘special retirement supplement,’’ which pays Federal employees the equivalent of their Social Security benefit at an earlier age. This would achieve significant savings while recognizing the need for new Federal employees to transition to a defined contribution retirement system. The vast majority of private sector employees participate in defined contribution retirement plans. These plans put the ownership, flexibility, and portfolio risk on the employee as opposed to the employer. Similarly, Federal employees would have more control over their own retirement security under this option. President Trump’s fiscal year 2018 budget calls for a phased-in increase to contributions federal employees pay into the Federal Employee Retirement System so that both employees and the government are contributing an equal amount.”

And finally, the Report encourages limiting Federal Health Coverage Funding for federal employees. It states, “currently, Federal contributions to the Federal Employee Health Benefits Program grow by the average weighted rate of change in these programs. This budget supports restricting the growth in these plans to inflation. It also proposes restricting Federal employees’ retirement benefits based on length of service, which would bring Federal benefits in line with the private sector model.”

Thanks,

Jackson Jones & Donny Green,
NASCOE Legislative Co-Chairpersons

USDA Press Release: Perdue Applauds President Trump’s Selections for Key USDA Posts

(Washington, D.C., September 1, 2017) – U.S. Secretary of Agriculture Sonny Perdue today applauded President Donald J. Trump’s selection of three individuals for key positions within the U.S. Department of Agriculture (USDA).  The president announced Gregory Ibach as Under Secretary for Marketing and Regulatory Programs (MRP), Bill Northey as Under Secretary for Farm Production and Conservation (FPAC), and Stephen Vaden as USDA’s General Counsel.

The Under Secretary for MRP oversees three critical USDA agencies: the Animal and Plant Health Inspection Service; the Agricultural Marketing Service; and the Grain Inspection, Packers, and Stockyards Administration.  The Under Secretary for FPAC oversees three critical USDA agencies: the Farm Service Agency, Natural Resources Conservation Service, and the Risk Management Agency.

“I look forward to the confirmations of Greg Ibach, Bill Northey, and Stephen Vaden, and urge the Senate to take up their nominations as quickly as possible,” Perdue said.  “This is especially important given the challenges USDA will face in helping Texans and Louisianans recover from the devastation of Hurricane Harvey.”

Regarding the individual selections, Perdue issued the following statements:

On Greg Ibach:
“Greg Ibach will bring the experience and vision necessary to serve as a first rate Under Secretary for MRP at USDA.  His exemplary tenure as Nebraska’s Director of Agriculture places him squarely in tune with the needs of American agriculture, particularly the cattle industry.  His proven track record of leadership will make him a great asset to USDA’s customers, the hard working, taxpaying people of U.S. agriculture.”

On Bill Northey:
“Bill Northey will continue his honorable record of public service in leading FPAC.  Having served the people of Iowa for the last ten years as their Secretary of Agriculture, and as a fourth generation corn and soybean farmer, Bill has a unique understanding of issues facing farmers across the nation.  He will be an invaluable member of the team.”

On Stephen Vaden:
“Stephen Vaden has a keen legal mind, as we have already experienced through his work since he joined USDA as part of the beachhead team on day one.  He has a firm grasp of the legal issues facing American agriculture, and very importantly, understands the breadth and complexity of the regulatory burdens placed on our producers.  Our farmers, ranchers, foresters, and producers will be well served by his counsel.”

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Update on Proposals Regarding Federal Employee Retirement Benefits

The purpose of this memorandum is to review proposals and the current status of federal retirement programs. Our legislative team is working to monitor the proposals and urging Congress to protect the current system. The below includes proposals released by both the President and the House of Representatives. The Senate Budget Committee has not yet released their proposal.

President’s Budget:
On May 23rd, 2017, President Trump announced the Administration’s proposed FY 2018 budget request. In this request are proposals to make significant changes to the Federal Employees Retirement System and the Civil Service Retirement System. Included in the changes are:

  • Cost-of-living allowances for current and future FERS retirees eliminated.
  • COLAS for CSRS retirees would be reduced by 0.5 percent each year.
  • FERS employees would see employee contributions to their annuities increased by one percent each year for the next six years, without any corresponding benefit increase.
  • The FERS annuity supplement would be eliminated for new retirees starting in 2018.
  • Federal pensions would be based on the average of the highest five years of salary instead of the highest three.

Following the President’s FY 2018 request, the CBO argued that these changes would better align federal practices with those in the private sector through:

  • Basing pensions on five-year average earnings.
  • Many employers not offering health insurance benefits for retirees.
  • Many companies shifting from lifetime annuities to defend contribution plans that require smaller contributions from employers.

However, the CBO also noted that these changes would lessen the attractiveness of the overall compensation package provided by the federal government, potentially affecting the ability to attract and retain a highly-qualified workforce. Additionally, under the President’s proposed changes, positions requiring professional and advanced degrees may become harder to fill, private-sector counterparts already provide a higher compensation to comparable federal government positions.

Under the current budget circumstances and within the current political situation, it will be difficult for the President’s proposed changes to become reality. The President’s budget request is the first step in a long process to actually forming the budget.

House Budget:
On July 19th, 2017, the House Budget Committee approved their FY 2018 Budget 22-14. At this time, the House of Representatives has not yet scheduled floor or full House consideration of their Committee proposal.  However, Speaker Ryan has publicly stated that the House will consider the budget in September.

The House FY 2018 budget instructions dictate that the Committee on Oversight and Government Reform to submit changes in laws within its jurisdiction sufficient to reduce the deficit by $32 billion for the period of fiscal years 2018 through 2027. The House FY 2018 budget includes measures affecting changes to federal government retirement practices, including ending the supplement only for future retirees, how much to raise the required contribution, over how long a period, and whether it would apply to all employees, to reach this required $32 billion savings over the next 10 years.

The Budget committee report includes the language, “Reform Civil Service Pensions. The policy describes in the Income Support, Nutrition, and Related Programs section of this report would increase the share of Federal retirement benefits funded by the employee. This policy has the effect of reducing the personnel costs for the employing agency. The budget assumes savings from a reduction in agency appropriations associated with the reduction in payments that agencies make into the Civil Service Retirement and Disability Fund for Federal employee retirement.”

Additionally, the Report includes the following policy statement on the same, “Reform Civil Service Pensions. This budget adopts a policy proposed by former President Obama’s National Commission on Fiscal Responsibility. The policy calls for Federal employees, including members of Congress and staff, to make greater contributions toward their own defined benefit retirement plans. It would also end the ‘‘special retirement supplement,’’ which pays Federal employees the equivalent of their Social Security benefit at an earlier age. This would achieve significant savings while recognizing the need for new Federal employees to transition to a defined contribution retirement system. The vast majority of private sector employees participate in defined contribution retirement plans. These plans put the ownership, flexibility, and portfolio risk on the employee as opposed to the employer. Similarly, Federal employees would have more control over their own retirement security under this option. President Trump’s fiscal year 2018 budget calls for a phased-in increase to contributions federal employees pay into the Federal Employee Retirement System so that both employees and the government are contributing an equal amount.”

And finally, the Report encourages limiting Federal Health Coverage Funding for federal employees. It states, “currently, Federal contributions to the Federal Employee Health Benefits Program grow by the average weighted rate of change in these programs. This budget supports restricting the growth in these plans to inflation. It also proposes restricting Federal employees’ retirement benefits based on length of service, which would bring Federal benefits in line with the private sector model.”

Stopgap Funding Bill Passed

The U.S. Congress earlier today passed stopgap legislation to avert a government shutdown at midnight and give lawmakers another week to reach a deal on federal spending through the end of the fiscal year.

The Senate passed the measure by voice vote without opposition after the House earlier approved it by a tally of 382-30. The measure now goes to President Donald Trump to sign into law.

The bill provides federal funding until May 5, allowing lawmakers to work on legislation over the next few days to keep the government funded for the rest of the fiscal year.

Updates from the NASCOE President

I just got home from an amazing trip for NASCOE that started in Dayton, Ohio, with the MWA Rally. Acting FSA Administrator Chris Beyerhelm thanked everyone for their service to the American Rancher and Farmer. He reminded us that we made $22 billion in payments that truly strengthens the economy in rural America. He emphasized that we need to tell our story to the American people and Congress. We need to tell them what the 22 billion dollars that we disperse does. Mr. Beyerhelm also said that he was hopeful that budget cuts would not be as bad as originally thought and to remember it’s a process and that Congress will ultimately determine our funding. We are important to rural America; especially to agriculture. He also encouraged us to recognize our peers with nominations for Administrator and other awards. You could hear the passion that our Administrator has for recognizing our employees for their excellent work; this is an opportunity to show case our best employees and is something management is encouraging us to do. As the NASCOE President, I was impressed that he knew how many outstanding and superior performance ratings CO employees had earned nationwide and compared that to the number of nominations for Administrator Awards they had received. We also heard from Brad Karmen, Acting DAFP. He shared with everyone that, as he arrived at our meeting, the Whitehouse was trying to gather information on the devastating fires in several SWA states. The Whitehouse wanted the information by 12:00 p.m., which gave them less than 1.5 hours to get it together. This information was collected from each state, compiled, and delivered to the Whitehouse by 11:59 a.m. This is just another example of why FSA is known as the “can do” agency. We were reminded that Congress is aware of the job we do and dollars we disperse across the country. It’s important that we continue to do our jobs to the best of our ability.

The next stop was Washington, D.C., for the NASCOE Negotiations Meeting with FSA Management. We met in a conference room in the Whiten Building that has been used by Presidents of the United States of America and numerous Secretaries of Agriculture. Sitting in this esteemed room gave me the sense of how important our negotiations process is. Where it may not compare to discussions between a United States President and his cabinet, it did make me appreciate the seriousness of our dialogues with management. The NASCOE team did an amazing job representing you and the issues you asked us to discuss on your behalf with Management. We were very successful in reaching positive agreements with Management on most of the items. A detailed report will be forthcoming when the final results are released by Management. Thanks to FSA Management for listening and working with NASCOE to help all of us do the best job we can in serving our producers. I also want to thank the NASCOE team for all of their preparation and professionalism in presenting your issues and concerns. We also worked with Management on the possibility of some relief for recent CP Notice concerning late-filed certification and, as always, strengthening COC authorities.

Next I flew to Fargo, North Dakota, with MWA Executive Chris Hare to attend the MNASCOE Convention in Alexandria, Minnesota. We flew into Fargo because our good friend Gwen Uecker had offered to pick us up at the airport and show us a lot of the farming around Cass County and carry us to and from Alexandria, Minnesota. Some good friends joined us on our tour, and while we discussed all aspects of our various FSA jobs, we really enjoyed the vast countryside and all the rich soil and abundance of water. The convention was well attended and very informative. There is an exciting trend happening at recent conventions and rallies. There were 17 first-timers in attendance at MNASCOE Convention. I was impressed and excited as I got to visit with them and encourage them to become active members of NASCOE.

As I have traveled around the country, I have become very concerned about the County Committee (COC) delivery system and especially the COC’s authorities and responsibilities. We all should know that the COC hires and supervises the CED. The CED hires and supervises the program technicians in their office or offices. The CED manages the office. District Directors are liaisons between the State Committee and the County Committee, supervise farm loan managers, and are a tremendous resource for the county offices. DD’s have an important role in FSA, but they do not supervise county offices, as some assume. Because COC members do not have access to our government computers, DD’s electronically approve the CED’s time and attendance for the COC in WEBTA. NASCOE has also received a small number of concerns across the country with District Directors changing the COC’s performance evaluation of their CED. DD’s should always consult with the COC’s and provide factual information to support or lower the COC’s appraisal of the CED. These discussions should be taking place throughout the rating period and documented in the COC Executive Minutes. We hear too many instances where our COC’s are not adequately involved. County Committees and CED’s must understand their obligations to document performance metrics and operational progress in the monthly county committee minutes. Are you documenting sign-up numbers and your efficiency of meeting deadlines? Are you doing a good job documenting your outreach efforts and anything you do above your normal duties? It is very important to keep your COC well-informed and involved in everything going on in your office. Keep your DD informed of your COC’s actions and requests. Remember, we are a team and ultimately it is about serving our farmers and ranchers. When we need to improve, let’s recognize that and hold ourselves accountable. When we excel, let’s highlight our accomplishments. As our Acting Administrator, Chris Beyerhelm, said in Dayton, let’s recognize our employees that are doing superior and outstanding work.

It’s good to be home after an extended NASCOE trip. I tremendously enjoyed getting to spend the last ten days working with the NASCOE Team. From the bottom of my heart, thank you for all you do for our membership! I would like to thank my FSA office staff, Christel Youmans and Tiffany Howard, for all they do for the producers of Dillon County, SC. I simply could not serve NASCOE if it were not for them and the support of my COC. Last, but not least, thanks to my wife, Anne, for supporting my efforts and travels on behalf of NASCOE, and to my son, Will, for taking care of our livestock while I am away from home.

Respectfully Submitted by,

Wes Daniels
NASCOE President

President’s Transition Report

I hope everybody is getting ready for the holiday season and has big plans to enjoy your family and friends during this time. Even as busy as it has been all across the country, we all have a lot to be thankful for. I wanted to address some concerns and thoughts that have been shared with NASCOE lately.

Many of you are anxious about the transition to a new President of the United States of America, his administration, and how it will impact FSA and the membership of NASCOE. We have read about the proposed hiring freeze and the uncertainty this creates for membership. First of all, we will probably learn more about this proposal and other changes as we get closer to the Inauguration and our new President takes office. We have all heard there will be a hiring freeze but we don’t know if that will allow us to continue to fill from within or not. For example if we have CED openings and COTs on board, can we fill those vacancies? We also don’t know if we will actually have a hiring freeze – we just know what we have read. Most of the information we can obtain doesn’t seem to indicate a hiring freeze would be long term. NASCOE’s legislative Consultant, Hunter Moorhead, has been working hard and will continue to keep us informed.  His “Legislative Update” was sent out recently, and I encourage you to read through that on the NASCOE website’s homepage if you have not already.

Membership has also inquired about changes to our retirement system and TSP. NASCOE will continue, as we always have, to monitor these benefits and will keep you updated. Most of these types of things would take congressional action and have been discussed previously without a lot of traction. Some of the conversations have addressed changes for new hires and we will stay on top of all these things. Again, having Hunter is a great advantage. He is watching, and will keep us updated on any proposed changes that will affect our membership and FSA employees in general.

Over the past two years, NASCOE’s leadership has worked aggressively to build relationships with both the Agriculture and Appropriations Committees. With the election behind us, these relationships will be important as we collectively monitor the new Administration’s legislative and regulatory proposals. Following January 20, we will start to learn more about the pathway forward. Our team can guarantee membership that we are prepared for all proposals and view the new Administration as an opportunity to improve our working environment. We feel strongly about the importance of our customer service function, and believe Members of the House and Senate are prepared to assist us throughout the process.

Most of the concerns we are hearing will become clearer in the next few months. I want to reassure you that your NASCOE Executive Committee is doing all we can to stay on top of these and many other issues. As we learn more, we will do all we can to share the information we gain with all of NASCOE. Please let us hear from you! All of your issues and concerns are important to us and our membership. You can send your issues directly to us, or go through your State Association Presidents and they will forward it to your National Leadership Team through the Area Executive Committee Persons.

At this point, as we move into the transition and New Year, let’s remain positive and continue to accomplish our main goals and mission, which is to serve the greatest farmers and ranchers in the world. One thing I know that we can be sure of, is that there has never been a more important time to be a member of NASCOE.  I hope every one of you has a Merry Christmas and the best New Year ever!!!

Respectfully Submitted by,

Wes Daniels
NASCOE President

Legislative Update

Please see the following message from Hunter Moorhead, NASCOE Legislative Consultant. We will continue to keep you updated as things in the legislative arena develop.


Good afternoon – Please accept this informal email as an update on both the legislative outlook and the Trump transition process.

Legislative Outlook – The House and Senate are working aggressively to pass two or three important bills before adjourning. The 114th Congress is likely to expire Friday afternoon or Saturday morning. Before hitting the doors, Congress will likely pass the Continuing Resolution which will fund the government through April 28, 2017. The level for FSA and FSA programs will continue at current levels. At this point, the Congress is expected to redraft/complete the drafted fiscal year 2017 appropriations bills. In my opinion, that will be difficult considering the new President and new agenda for 2017. The National Defense Authorization bill and Water Resources Development bill will likely be the only significant pieces of legislation reaching this President’s desk before adjournment.

In regard to our interest, the Continuing Resolution includes our FSA specific policy riders and adequately funds the agency. The bill doesn’t include any additional funding/Farm Bill implementation funding to extend or hire temporary workers.

Trump Transition – We are all doing our best to monitor the Trump transition process for all positions within the Executive branch. At this point, it is difficult to determine who will become the Secretary of Agriculture, much less any policy proposals that may impact employees or farm programs. Remember, President-elect Trump’s inauguration will not occur until the end of January. At that point, the Administration will likely move quickly to address burdensome government regulations and repeal Obamacare or the ACA Health Care law. In addition, the Administration and Congress will quickly focus on overhauling the tax code. I’m hopeful that you all understand the timelines and know that nobody has the answers regarding Trump’s policy proposals. Most news articles are based on press comments and twitter feeds that come and go.

Who will be the Secretary of Agriculture? If anybody tells you they know, they are lying unless you hear it directly from the incoming President or Vice President. Remember, it could certainly be a person who has not been mentioned. This transition team is using decoys to shield actual candidates.

2016 Convention Reports

Cedar Rapids

The 2016 NASCOE Convention in Cedar Rapids, Iowa was a great success! If you were unable to attend, please read through the reports below to see what you missed. The questions and responses from the Q&A session with management will be posted in the near future. Thank you to IASCOE for hosting a fantastic convention!

President’s Report
Vice President’s Report
Secretary’s Report
MWA Report
NEA Report
NWA Report
SEA Report
SWA Report
Awards, Scholarships, and Emblems Report
Benefits Report
Legislative Report
Membership Report
NAFEC Report
Programs Report
Publicity Report

Budget Agreement Update

Congressional leadership and President Obama have reached an agreement regarding the statutory budget caps and increasing the debt limit. Please see the attached section-by-section for full details. This agreement should allow the appropriations process to be completed before the December 11 deadline. The agreement does include the below crop insurance policy provision.

Standard Reinsurance Agreement (SRA) — The SRA must be renegotiated no later than December 31, 2016. This section also establishes an 8.9 percent cap on the overall rate of return for insurance providers under the agreement. Currently, the negotiated overall rate of return is about 14.5 percent.

House and Senate Agriculture Committee members view this as opening the recently negotiated Farm Bill and remain publicly opposed.  Please see the statement below. 

At this point, we expect the House and Senate will approve the legislation. 

Ag Committee Leaders Stand United Against Reopening Farm Bill to New Crop Insurance Cuts

Today, Agriculture Committee Chairmen Sen. Pat Roberts, R-Kan., and Rep. K. Michael Conaway, R-Texas, and Ranking Members Sen. Debbie Stabenow, D-Mich., and Rep. Collin Peterson, D-Minn., made the following statements on the budget deal. 

The Members of Congress stand united against reopening the 2014 Farm Bill to further cuts, emphasizing that the proposed cuts to crop insurance in the budget agreement would undermine a critical risk management tool for American agriculture producers and consumers.

“Farmers and ranchers have done more than their fair share to reduce government spending,” 
said Chairman Roberts. “To target the number one priority for producers with additional cuts will undermine the delivery of this important protection for agriculture. While Congressional leaders may sell this package as providing budget stability, it is anything but stable for farmers and ranchers. It took years to negotiate and pass a new Farm Bill. Producers have signed contracts and purchased policies. These proposals to make further cuts to the crop insurance program were not included in the House or Senate passed budgets, in any appropriations bills or in the President’s budget request. Once again, our leaders are attempting to govern by backroom deals where the devil is in the details. I will continue to oppose any attempts to cut crop insurance funding or to change crop insurance program policies.”

“Make no mistake, this is not about saving money. It is about eliminating Federal Crop Insurance,” 
said Chairman Conaway. “The House Agriculture Committee was not consulted regarding any changes to policies under the jurisdiction of our committee. This provision is opposed by an overwhelming majority or our committee members. It was debated and defeated during the 2014 farm bill process, and to move forward with it now breaks faith with the American producer. I am working alongside many of my colleagues to have the provision removed. If it is not removed, I will vote against this bill and work to defeat its passage. The American people deserve better than continued backroom deals struck in the middle of the night that entirely undercut the legislative process.”

“I oppose any efforts to cut or reopen Farm Bill programs. It is particularly disappointing to see cuts to crop insurance in the budget agreement,”
 said Ranking Member Stabenow. “These types of cuts only undermine the economic certainty that the Farm Bill provides. The Farm Bill made meaningful reforms to help reduce the deficit. Any attempts to reopen any part of the Farm Bill to more cuts would be a major set-back for rural America and our efforts to create jobs.”

“We made major cuts when we wrote the Farm Bill,” 
said Ranking Member Peterson. “It is not appropriate to cut agriculture again. The Farm Bill should not be raided. I oppose any cuts.”

I will continue to send updates as the discussion continues. 

Hunter Moorhead
NASCOE Legislative Consultant

Bipartisan Budget Act of 2015