Updated 3:35 pm ET
When congressional Republicans try to figure out how to avert cuts in defense spending, or offset the cost of an extension of unemployment insurance, it is often federal workers they look to for the money.
A dispute over making federal employees pay a bigger share of their pensions was one snarl that delayed the bipartisan accord announced Wednesday night on a bill to extend the payroll tax cut, continue unemployment benefits for long-term jobless people, and avert a 27 percent cut in payments to doctors serving Medicare patients.
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Sen. John McCain, R-Ariz., proposed to come up with the money to fend off cuts to the defense department by hiring only two workers for every three who leave federal employment.
For months, Republicans have been pushing bills to reduce the federal workforce through attrition. Republicans point out that since 2007 the federal workforce has grown by 14 percent, even as the recession decimated private sector jobs.
Earlier this month when Sen. John McCain, R-Ariz. and a phalanx of other pro-military Republican senators warned of automatic spending cuts looming at the end of the year, they proposed to come up with the money to fend off those cuts by hiring only two workers for every three who leave federal employment.
McCain and his allies also wanted to maintain the freeze on cost-of-living wage increases for federal employees until mid-2014. The House voted last month to keep the cost-of-living pay freeze for this year and next year. Even with the freeze, federal workers still do get pay increases based on performance and length of service.
Why do Republicans look to federal workers as the money source?
One obvious reason is Republicans’ aversion to tax increases – and their knowledge that the real struggle over taxes will begin only after Election Day, when a lame-duck Congress and President Obama will get down to haggling over the income tax rates and tax credits that expire on Dec. 31.
But Republicans also turn to federal workers for the money because they point out that they’re better compensated than workers with comparable skills and experience in the private sector, according to an analysis released last month by the Congressional Budget Office.
The CBO said that overall, the federal government paid 16 percent more in total compensation than it would have if compensation had been comparable with that in private sector firms.
The biggest difference is not in pay, but in benefits: “On average for workers at all levels of education, the cost of hourly benefits was 48 percent higher for federal civilian employees than for private-sector employees with certain similar observable characteristics,” the CBO said.
And the thing that federal workers have that most private-sector workers do not -- the defined-benefit pension plan – was a bone of contention in the bargaining over the payroll tax package.
In the end, instead of increasing the amount all federal workers must pay for their pension benefit, the accord makes only new federal employees pay more.
With Maryland having 137,000 executive branch workers, House Budget Committee ranking member Rep. Chris Van Hollen and Senate Finance Committee member Sen. Ben Cardin, both of Maryland, fought hard to limit the damage to those workers in the deal that was announced Wednesday night.
Cardin said Wednesday before the agreement was clinched, that those putting together the deal “are asking… that a large part of the offsets that help working families that are out of work be paid for by other middle-income working families” -- by federal employees. “To me that’s not fair,” Cardin said.
In a joint statement Thursday, Cardin and Van Hollen said that altough they were happy the final deal didn't affect current federal workers, "we still strongly oppose the provision that raises $15 billion to help offset the cost of this package from future workers."
They argued that it was "inherently unfair" that the money to offset the cost of extending unemployment insurance came from "additional sacrifice from other middle-class families rather than the very wealthiest Americans who can afford to pay more but continue to pay less."
The battle over federal workers here on Capitol Hill is another front in the long-running GOP struggle against public-sector unions that played out in Wisconsin last year where Republican Gov. Scott Walker fought to have public-sector workers pay more of their pension and health insurance costs and signed a law curbing their right to collective bargaining.