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Senate Proposes Benefits Cuts for Federal Employees in Reconciliation Bill
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Jun 15, 2025
Discover how the latest legislative proposals from the Senate Committee on Homeland Security and Governmental Affairs could significantly impact federal employees. In this video, we provide an in-depth analysis of the newly released legislative text under consideration as part of the reconciliation bill currently in Congress. 📌 What You’ll Learn: Key legislative proposals and their implications Detailed breakdowns on at-will employment options, MSPB filing fees, FEHB audits, pay deductions, union charges, cost-cutter bonuses, and more A comparison of House and Senate proposals 💼 Stay Informed: Whether you're a federal employee or closely following government affairs, this video will help you understand the potential changes that could affect your benefits and employment conditions. 🔗 Related Articles: Senate Adds Cuts to Federal Employees’ Benefits in the “One Big Beautiful Bill” https://www.fedsmith.com/2025/06/13/senate-adds-cuts-to-federal-employees-benefits-in-the-one-big-beautiful-bill/ Important Changes to Proposed Benefits Cuts in House-Passed Spending Bill https://www.fedsmith.com/2025/05/28/important-changes-to-proposed-benefits-cuts-in-house-passed-spending-bill/ ⏱️ Chapters: 0:00 Introduction 1:23 Details of Legislative Proposals 1:28 At-Will Employment Option
View Video Transcript
0:00
the Senate has released legislative
0:02
proposals to be considered as part of
0:04
the reconciliation bill that's currently
0:06
working its way through Congress and
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some of these would have a significant
0:10
impact on federal employees namely on
0:12
their pay and benefits let's take a look
0:14
at the details hello everyone Ian Smith
0:16
here with fedsmith.com thank you for
0:18
taking the time to join me so what are
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these legislative proposals well they're
0:25
they've been put forth by the Senate
0:27
Committee on Homeland Security and
0:30
Governmental Affairs they released some
0:32
legislative text with a number of
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proposals
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and it's adding on to the reconciliation
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bill that's currently going through
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Congress right now also known as the one
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big beautiful bill and this is the same
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bill that was passed by the House last
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month in the House version of the bill
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had some of these same proposals in them
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some were different so at any rate let's
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take a look at the details here these
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proposals are being put forth to cut
1:00
spending one thing that the the Senate
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uh Homeland Security and Government
1:05
Affairs Committee was was touting was
1:08
was the savings that go with these um
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just for the package of the proposals
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that would impact federal employees the
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most they were saying that they would
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amount to over 24 billion in savings
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over the next 10 years
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let's take a look at at each of these
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individually the first one is an atill
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employment option for newly hired
1:30
federal employees if this sounds
1:33
familiar it's because it was also in the
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House version of the bill however what
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the Senate is proposing builds on the
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House version
1:42
um for newly hired federal employees who
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opt to keep their civil service
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protections under um title five it would
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increase the amount they have to
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contribute to FURs that's the federal
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employees retirement system by 10%
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so that would be 14.4% 4% total for most
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federal employees if they take the
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atwill option it would increase that fee
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by 5% so 9.4% total the House version of
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the bill is a little different if they
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kept their protections it would be a 5%
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increase and if they took um or if they
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opted for the atill option no additional
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increase in their first contribution so
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that's the difference in those two next
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up is the MSPB filing fee we saw this in
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the House version of the bill it's the
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same in the Senate version it um
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proposes a $350 filing fee for claims or
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appeals for the to the Merit System
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Protection Board and this fee would be
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refundable on successful appeals
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something that the Senate committee
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noted is that this fee is the same as
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what is charged for civil matters in
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most district courts so that apparently
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is the origination of this fee and the
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amount
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the idea is to cut down on frivolous
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claims or as the Senate committee put it
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in its literature on these proposals
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baseless claims quote unquote they
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called them the next provision is um
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audits for the FEB the federal employees
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health benefits program we saw this in
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the House version of the bill as well
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it's pretty much the same in here this
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would require uh eligibility
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verification of family members added to
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FEB plans audits for looking for
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ineligible family members who are
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receiving benefits and also it would um
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require disenrollment of any ineligible
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beneficiaries
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um estimated savings on this proposal
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are two billion the next proposal is a
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new proposal in the Senate version of
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the bill um this would be pay deductions
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for federal employees so what this would
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do it would impose a 10% fee to cover
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administrative costs for any optional
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payroll deductions made to certain
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taxexempt organizations coming out of a
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a federal employees paycheck such as
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unions contributions to organizations
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via methods that don't require
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government resources such as writing a
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check or transferring money via AC would
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not be affected
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this is being done because the
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government incurs costs to process these
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transactions and according to the Senate
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committee the government should at least
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break even on any elective payroll
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deductions to organizations like unions
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and speaking of unions the next proposal
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is definitely taking u is putting
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restrictions on federal employee unions
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in the government this proposal would
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restrict the use of official time and
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government resources for union
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activities now what's official time
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official time is given to federal
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employees to work on behalf of a union
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while they continue to receive their
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full salary and benefits as a federal
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employee
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um under this proposal unions would be
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required to reimburse the government for
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use of official time and resources for
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union activities
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this is something that has come up
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before um in his first term actually
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President Trump tried to do some of this
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via executive order this if it were to
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remain in the bill and of course be
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passed into law it would basically be
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codifying that into legislation the next
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proposal is bonuses for cost cutters now
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this is a proposal pretty much from
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Senator Ran Paul Republican from
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Kentucky who is also the chairman of
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this Senate committee he has proposed
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this in the past via separate
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legislation um but this would include it
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as part of the larger um reconciliation
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bill it's designed to counteract the
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tendency for wasteful spending to happen
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in government towards the end of end of
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a fiscal year i.e the use it or lose it
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mentality as it's called so instead of
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aggressively spending these funds toward
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the end of a fiscal year so that the
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agency could keep that amount that same
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amount of money in its budget for the
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next year
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it creates a financial incentive for
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federal employees to report this type of
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wasteful spending if and when they see
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it so it would do this by paying bonuses
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to federal employees who report this
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wasteful spending and under the terms of
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what's being proposed here it would be
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the lesser of $10,000 or an amount equal
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to 1% of the AY's cost savings
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determined to be the total savings
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attributable to the disclosure put forth
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by the employee
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and in the past when it's been
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introduced as separate legislation it
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was known as the uh bonuses for cost
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cutters act and the last proposal that's
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going to be of significance to federal
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employees is one that would rescend the
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postal services electronic vehicle funds
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under the inflation reduction act the
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Biden administration gave a billion
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dollars to the postal service for
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purchasing and installing electric
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vehicles EVs
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and what the Senate is saying is that
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the postal service is losing money like
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crazy to the tune of billions every year
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and so this is just yet another
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requirement on the postal service to
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spend money that doesn't need to be
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there it would rescend that billion
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dollars and also require that the
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electric vehicles and any unused
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infrastructure that goes with them uh to
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be sold so that's a summary of the key
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proposals in in this legislative text
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that the Senate committee has put forth
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that again are is going to be of most
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interest to federal employees it builds
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on the House version of the bill three
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of the provisions are the same or very
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similar the Atwill employment option the
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MSPB filing fee and the FEB audits the
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Senate proposal as I mentioned it does
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expand on the at will employment option
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by upping the fee in question um or fee
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isn't the right word but the the
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contribution amount towards um towards
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FURs there is one proposal in the House
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version of the bill the the version that
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passed the House last month that is
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different and that is the proposal to
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eliminate the FURs annuity supplement
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but what that proposal would do it would
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eliminate the FURs annuity supplement
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effective at the start of 2028 it would
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not apply to federal employees already
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entitled to it under law before the bill
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was enacted and it would not apply again
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as currently written to federal
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employees subject to mandatory early
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retirement such as law enforcement
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officers or air traffic controllers
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that's a basic overview of these
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legislative proposals put forth by the
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Senate at least the ones that are going
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to be of interest to federal employees
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there were others included but I didn't
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get into them because again I'm just
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focused on the federal workforce whether
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or not they'll make it into the final
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version of the bill and ultimately
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become law I can't predict that
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but we will continue to keep you updated
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as changes occur and as new information
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becomes available so be sure to check
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the fedsmith.com website and also like
9:34
and subscribe to the channel for updates
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have a good day
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