another hit to GDP.........from federaltimes......
"Federal retirement benefits and paychecks are nearly certain to take a serious blow as part of any deficit reduction deal.
Details remain in flux and are hard to pin down — especially since House Speaker John Boehner pulled out of negotiations with the White House July 22 — but the gist of what's to come is clear.
"I've abandoned all hope," John Gage, national president of the American Federation of Government Employees, said last week. "I know we're gonna get crushed. It doesn't seem we can do anything about it."
Among the likely hits to federal employees:
• Increasing paycheck contributions to pension programs, which would feel like a pay cut. For current employees, the increase would likely be phased in over time, but details are still being hammered out on the size of the increased contribution and the speed at which it is phased in.
• Basing pension calculations on an employee's highest five salaries, instead of their high three, which would reduce pensions.
• Using a so-called chained Consumer Price Index to calculate cost-of-living adjustments to federal and military pensions and Social Security. The effect would be COLAs that are about 0.25 of a percentage point lower than those calculated by the price index now used.
Colleen Kelley, president of the National Treasury Employees Union, said most negotiations have focused on mandatory spending, which is why proposed changes have been focused on federal pensions.
Discretionary spending is also likely to be cut severely as part of any deal, but Congress will decide those details later.
Discussions include a third year of federal pay freezes — one more than the two years of freezes already approved by Congress, Kelley said"..................READ MORE
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