If you’ve read a description of the Murray-Ryan budget deal, you probably noticed that a fairly sizable change in the pension contribution requirements for federal employees applied only to new hires. As Josh Barro points out:
Republicans wanted to make federal employees pay more toward their pensions. President Obama has also proposed doing this as a part of his budget.
But Democrats generally are not very keen on this idea, and two of the most powerful Democrats in the House (Reps. Steny Hoyer and Chris Van Hollen) represent districts in Maryland with lots of federal workers whose pay they want to defend.
So Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.) came up with a compromise: Require higher employee pension contributions, but only from federal civilian employees who will be hired in the future.
This is a perfect approach because the losing political constituency is invisible. In fact, it’s so compelling, Congress already used it once before this year, as part of the “Fiscal Cliff” deal enacted in January.
This kind of “grandfather clause”—which given the timing might be described as a “Santa Clause”—is pretty common (it’s included, for example, in all the GOP Social Security and Medicare “reform” proposals to exclude current beneficiaries), and is defensible here because it insulates federal employees from what would otherwise be a pay cut. But it also permanently reduces the pay of future federal employees, and should be understood as just that.
I hadn’t really focused on the fact that not one but two Maryland suburban Democrats had an unavoidable hand in the budget negotiations (Hoyer as House Democratic Whip, and Van Hollen as ranking Democrat on the Budget Committee and as Assistant to the Speaker, a leadership post created just for him), but it sure did give some nice super-representation to DC area federal workers.
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