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Letter to the House and Senate on the Payroll Tax Bill

December 13, 2011

Dear Representative:

The National Education Association, representing 3.2 million educators across the nation, would like to express several concerns regarding the proposed package under consideration to extend the payroll tax holiday. Specifically, we are very concerned about provisions that would harm federal workers and many other public employees while failing to call on those most able to do so to pay their fair share. Middle class Americans need help -- they need an America that is creating jobs, has a fair tax system, and is educating our nation's future. Sadly, the bill before Congress this week would harm millions of middle class families, including many public employees as well as families struggling to find work in this weak economy. We urge Congress to find a more balanced approach that avoids hurting the very people the payroll tax holiday is intended to help.

The proposal under consideration:

  • Freezes federal employee pay through 2013, and triples employee contributions to federal retirement programs, effectively cutting federal employee pay: Taken together, these changes take more than $53 billion out of the pockets of federal worker, including educators working in federal Department of Defense schools.# The payroll tax cut is designed to help America’s middle-class families who are struggling in this tough economy. Therefore, it makes no sense to offset the costs by freezing pay once more for middle-class federal workers across the nation – 62 percent of whom only earn between $25,000 and $75,000 a year.

    Every day federal employees provide essential services to the American people, including educating the children of our nation’s military families. Federal workers are already facing compensation cuts and job losses, as agencies budgets are downsized under federal mandate. And, they have already made significant sacrifices to help reduce the national deficit by accepting a two-year pay freeze, resulting in $60 billion in savings. A federal worker who makes $50,000 per year at the end of a 30-year career receives a federal pension of just $15,000 per year. Federal employees have come to rely on decent benefits in lieu of pay. Instead of asking further sacrifice of these middle class workers, we should be calling on the wealthiest in our nation to do their part.

  • Continues to deny the payroll tax holiday benefits to millions of public employees: The Social Security payroll tax cut holiday reduces the employee share of the Social Security payroll tax from 6.2% to 4.2% for the first $106,800 in wages. However, more than six million public employees are not eligible for these benefits. Excluding these employees takes real cash from their pockets. There are simple solutions to fixing this inequity and precedent for doing so. Relief for seniors not eligible for Social Security was provided in the American Recovery and Reinvestment Act of 2009, which included a $250 refundable tax credit for public service retirees not eligible for the Act’s $250 payment to Social Security recipients.
  • Increases enforcement of the Government Pension Offset and Windfall Elimination Provision: These unfair offsets take away Social Security benefits earned by hundreds of thousands of public employees. Rather than seeking to take even more money from educators, police, firefighters and other public employees, Congress should be looking for ways to rectify the underlying unfair law.
  • Reduces the total number of weeks unemployed workers are eligible for aid by as much as 40 weeks: The cost of living continues to rise while far too many workers, including educators, still find themselves unemployed. Protecting unemployment insurance is critical to ensuring family stability and, consequently, the well being of thousands of children in our public schools. Cutting unemployment benefits reflects an astonishing lack of understanding of the current challenges faced by many American families.

Thank you for your consideration of our views on these important issues.


Kim Anderson
Director, Center for Advocacy

Mary Kusler
Manager of Federal Advocacy