Year-End Funding Agreement Provides Stability for Federal Employees

Federal employees will get a modest pay increase, avoid a government shutdown and have more time to pay back deferred taxes under year-end spending and pandemic relief legislation approved by Congress Monday night.


Many agency funding levels will be slightly higher for the remainder of the 2021 fiscal year, which helps maintain staffing and resources for such vital work as promoting public health, distributing economic relief payments to families and business in need and providing for the nation’s security.


“A year-end omnibus spending package combined with a COVID-19 relief package is an imperfect but much-needed end to the legislative year, and federal employees are grateful that Congress chose, in its final hours, to reject efforts by Senate Republicans and President Trump to freeze their pay in 2021,” said NTEU National President Tony Reardon.


Federal employees will receive a 1 percent across-the-board pay adjustment starting in January.


“Federal employees worked throughout the pandemic, keeping this country moving forward. Despite their dedication, they are receiving a pay raise that is too low and does little to alleviate rising health care premiums and the pay gap that exists between them and their private-sector counterparts,” Reardon said. “NTEU will work with the incoming Congress and administration to secure a pay raise in 2022 that recognizes the contributions of federal employees.”


The funding agreement also provides relief to those federal employees who earned less than $104,000 a year and were forced to participate in the president’s payroll tax deferral from September through December of this year. Instead of having the deferred taxes withheld from their paycheck for the first four months of 2021, the withholdings will now be spread out over 12 months next year.

“NTEU commends Sen. Chris Van Hollen of Maryland and others who fought to give federal employees more time to pay the deferred taxes,” Reardon said. “We were worried about the financial burden the deferral was going to place on middle-class federal employees and their families in 2021, and we think this is a fair resolution to a shortsighted policy that was forced upon civilian workers and military servicemembers in the executive branch.”


At many agencies where NTEU represents frontline workers, funding levels are generally higher than last year.


The bill provides $11.9 billion for the IRS in fiscal year 2021, which is $409 million higher than the enacted level of FY 2020. It includes an additional $202 million for IRS enforcement and $44 million for taxpayer services. The bill also designates $509 million to carry out another round of economic impact payments and address other COVID-related tax administration issues.


“After 10 years of cuts, it is reassuring to see Congress make an effort to rebuild the IRS budget and workforce to a level that the American people expect and deserve,” Reardon said. “We all know that having an adequately funded IRS, that provides both assistance and enforcement, is key to collecting the revenue that is rightfully owed.”

At Customs and Border Protection, the bill provides $15.28 billion, which is $370.7 million above the FY 2020 enacted level. It also includes an additional $840 million in emergency appropriations for the ports of entry to help offset the loss of customs and immigration fee revenue associated with the pandemic, which was a top priority for NTEU and CBP Officers at the ports.


“While this emergency funding is key to maintaining staffing levels at the 328 ports of entry, we will continue to fight for additional funding to hire more CBP Officers because the agency remains short of the staffing target identified in its own workload staffing model,” Reardon said.