[Congressional Record Volume 141, Number 63 (Wednesday, April 5, 1995)]
[House]
[Pages H4184-H4185]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  H.R. 1215 UNFAIR TO FEDERAL WORKERS

  (Mr. DAVIS asked and was given permission to address the House for 1 
minute and to revise and extend his remarks.
  Mr. DAVIS. Mr. Speaker, I rise to sound the alarm against a huge tax 
hike on 2 million Americans that has been slipped into H.R. 1215, the 
package of tax reforms that will be considered on this floor today. 
Here are the facts:
  Fact: The rule governing today's tax debate prevents a clean vote for 
the tax reductions that were promised in the Contract With America. We 
will be asked to vote on a package that includes a 2.5-percent payroll 
tax hike that would cost every Federal worker between $3,500 and 
$11,000 over the next 5 years. The Congressional Budget Office has 
scored this as a revenue which means that it is a tax. And that's not 
all.
  Fact: The same tax package would reduce lifetime benefits for Federal 
workers by 4 percent by changing the retirement formula to reflect the 
highest 5 years of salary as opposed to the current formula based on 
the highest 3 years of salary. This provision simply makes it more 
expensive for Federal workers to retire on schedule and encourages them 
to stay on the payroll longer to make up for the losses in planned 
retirement benefits.
  The tax hike supporters claim that this revenue is needed to fund the 
CSRS retirement system. Let's look at the facts:
  Fact: None of this increased revenue will be set aside in a trust 
fund for the 
[[Page H4185]] benefit of future Federal retirees. Instead, it will go 
into the general treasury to finance tax cuts for others.
  Fact: 50 percent of Federal employees are part of the FERS retirement 
system which everyone agrees has absolutely no unfunded liability. 
Nevertheless, these workers are subjected to the same tax hike and will 
get no additional retirement benefit or security.
  Fact: CRS has determined that the Federal retirement system does not 
have an unfunded liability problem and faces no threat of insolvency. 
These findings have been verified and confirmed by the GAO.
  H.R. 1215 includes a huge, unfair tax hike selectively imposed on 2 
million working Americans. This tax hike does not belong in a tax 
reduction bill and must be defeated. I will oppose any rule that does 
not address this tax hike, and I will oppose any so-called Tax Fairness 
bill that arbitrarily punishes these 2 million Federal workers.


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