Is the Federal Government Cheating Some Employees?

Bruce Bialosky

9/19/2011 12:01:00 AM - Bruce Bialosky

The first law passed in 1995 after Republicans assumed control of the Congress was quite succinct: “Congress must abide by all the laws that they impose on the rest of America.” Ever since then, hundreds of stories have been written that describe how our Federal government reserves special treatment for itself. Some illustrate the benefits that elected officials award themselves, while others focus on special treatment for federal employees. While researching a new category of special treatment, we discovered much more than we bargained for.

A reader brought to our attention the plight of federal temporary workers. She had been employed, as a temporary worker, at both the US Postal Service and the USDA, and claimed that she received none of the benefits to which a permanent employee was entitled. She was told “We hire temps so we don’t have to count them as regular government workers, so the government doesn’t look as big as it is.”

This encouraged us to investigate the issue with the Office of Personnel Management (OPM), which serves as the HR (Human Resources) division of the Federal government. Extracting information from these people was tougher than a T-Bone at Denny’s. No personnel could actually be interviewed. Questions had to be submitted in writing and were answered two weeks later. Then you had to submit follow-up questions and wait another two weeks.

We wanted to know how many federal employees are classified as temporary workers. In 2010, there were 22,204, a number far larger than the payrolls of most American companies. It should come as no surprise that the 2006 number was about 4,000 employees lower, and that the large recent increase occurred principally during the Obama Administration.

If you work for a private employer that offers a health insurance plan, you must be covered within 60-90 days. Not with these federal workers – they’re not covered at all, because under federal rules, you can work for up to a year as a temporary worker and not receive health insurance. Here is the hitch: the temporary worker can be rehired for a second year, during which health insurance is available to the employee, but only if they pay the entire cost. It’s ironic that an administration that passes laws requiring all Americans to purchase health insurance refuses to provide it for a class of federal employees that is growing by leaps and bounds.

Neither do these temporary employees participate in the federal pension system. Most private pension plans cover employees when they begin their second year of service, but these employees never see any pension benefits, even if they are re-hired year after year in the same position.

Let’s recap the facts: The federal government has what appears to be a permanent class of employees – over 20,000 people – who are denied health and pension benefits given to their permanent colleagues. If these employees are around for too long, they get fired or transferred to another department, which puts them back at square one. Can you envision the protests that would take place if Wal-Mart or Ford Motor Co. had the same policy? Unfortunately, most Americans don’t even know that this situation exists. It’s just another way our government creates “separate” rules for itself. While it is giving certain employees outlandish benefits it is cheating a class of employees out of any benefits.

Our research into the OPM provided some other fascinating information about our federal workforce. Temporary workers are paid at the same rate as their fellow permanent employees (at least they’re not cheated that way), and over the last 4 years, their average salary has increased over 22%. That’s an annual pay raise of 5.5%, more than double the rate of inflation. How many private sector employees have received increases like that?

In addition, the number of federal employees has just skyrocketed. In the first two years of the Obama Presidency, the federal workforce increased by 158,470 people, about 9.4%. That number is based on what they call non-seasonal, full-time permanent employees. As of 2010, there were 281,491 additional employees with some other classification. Since we know that 22,204 of these are temporary employees, only God knows what the other 259,000 are. The OPM told me that I had to file a Freedom of Information Act request to find out. I can guarantee one thing, though – those 259,000 people are costing us a boatload of money.

When the Congressional Super Committee meets in the next couple of months, they’ll be searching for ways to cut the deficit. But the vested interests are already digging in for a fight; after the debt ceiling deal, the President of the National Treasury Employees Union, Colleen M. Kelley, stated “I am pleased to see that the deal does not have any immediate cuts to federal pay or pensions.”

Congress should change that, and here are two simple ways to realize major savings. First, cut all federal employees salaries by 10%. They have received disproportionate raises over the past few years and those should be dialed back. Second, every department should be told to cut their workforce back to 2008 levels, reversing the ridiculous increases that the Obama administration has allowed to happen. Think of the billions in savings right there.

Then Congress should look into this temporary worker program. The federal government needs some flexibility in its hiring, but it’s quite clear this program is a sham and a disgrace.