February 05, 2006
Kurt Gallagher
(202) 639-6491

AFGE National President Responds to 2007 Budget Proposals

WASHINGTON—American Federation of Government Employees National President John Gage issued the following statement in reaction to the release of the president’s budget proposals for 2007.

On Caring for Our Veterans
Once again the administration is shamelessly attempting to make up the budget shortfall on the backs of veterans. Administration proposals would double drug co-pays and impose an annual $250 enrollment fee for more than one million veterans. Increased out-of-pocket health care expenses deter people from seeking medical care, thus making it likely that they will require more expensive treatment later. Republicans and Democrats jointly shot down these proposed fee increases last year. In the face of growing demand from returning soldiers and aging veterans, the president has proposed significant decreases in construction funds (down 34% from 2006 funding levels) and no increased funding for state extended care facilities. Funding proposals for the VA must be adjusted to reflect reality. The administration should adopt an assured funding formula based on the veterans’ actual health care needs.

On the Federal Pay Raise
It appears that the administration finally has gotten behind the concept of pay parity for civilian and military federal employees, which has been supported by presidents of both parties and bipartisan majorities on Congress for two decades. However, the paltry proposed raise of 2.2 percent will do nothing to close the pay gap with the private sector. In the Washington-Baltimore area, federal employees lag behind their private sector counterparts by 18.9 percent in terms of pay, and across the country the pay disparity can be as high as 24 percent (in New York and San Francisco). Worse still, because the proposed raise is lower than inflation estimates, the standard of living for federal employees likely will decrease in 2007.

On the Federal Employees Health Benefits Program (FEHBP)
AFGE is concerned that intentions to alter the Federal Employees Health Benefits Program will reveal an attempt to shift even more costs for health care onto enrollees. Any attempt to cut services or raise costs is indefensible in light of a paltry pay raise proposal that does not keep pace with inflation.

On Evaluation Standards for Privatization Competitions
The administration that forced disruptive and costly privatization competitions onto virtually every agency, under the guise of cost savings, now is proposing that cost no longer be the determining factor when it comes to deciding whether or not government services should be contracted out. This proposed changed would permit subjective standards with respect to contracting out and would be a heavy strike against accountability in our government.

On the Working for America Act
The administration should abandon its foolish initiative to enact flawed personnel changes throughout the federal government, either through the Working for America Act or other means. These changes would undercut organizational performance in the government. Similar changes in the Department of Homeland Security were ruled illegal last year.

On Staff Cuts in the Social Security Administration
The proposal to slash more than 1,950 jobs from the Social Security Administration defies common sense. SSA employees have been warning for months that the agency is dangerously short on staff. In light of the looming wave of baby boomer retirements and the enormous workload those retirements will create, the SSA staff should be expanded, not cut.

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