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Democrats Trying to Undo Pension Cut in Payroll Deal

Bill Clark/CQ Roll Call File Photo
House Minority Whip Steny Hoyer (right) and Rep. Chris Van Hollen are demanding that a cut to federal worker pensions be removed from a deal to extend the payroll tax cut.

Updated: 9:45 p.m.

In the final stretch of negotiations, Congressional Democrats are waging a last-minute behind-the-scenes battle on the payroll conference committee to supplant a cut to federal worker pensions, according to aides on both sides with knowledge of the talks.

The negotiation is the remaining issue holding up a deal for the conference committee.

Conferees Sen. Benjamin Cardin and Rep. Chris Van Hollen have teamed with House Minority Whip Steny Hoyer to demand that a cut to federal worker pensions be replaced with a cut to federal worker pay. The cut would be used to partially pay for an extension of unemployment insurance benefits.

All three Members are Maryland Democrats and represent numerous federal workers, and Cardin is up for re-election in 2012.

“We’re still working on the details; there are a lot of conversations happening,” Van Hollen said this evening.

Hoyer unleashed a fiery tirade against the measure in a closed-door House Democratic Caucus meeting earlier today, according to a source in the room. The Members have publicly said throughout the process that they believe federal workers have already paid their fair share to offset the deficit.

Asked this afternoon whether he could ask his Members to vote for a measure that cuts government worker pensions, Hoyer said, “I’ve got to find out exactly what it is before I tell them anything.”

The Democratic proposal mirrors President Barack Obama’s call for a 0.5 percent cost-of-living increase for federal workers in 2013, down from a 1.7 percent increase. Savings would accrue over 10 years.

A GOP aide said the Democratic counterproposal is not acceptable because it does not have an immediate effect.

While House Republican conferees have all said they are ready to sign an agreement, House Democrats have demurred.

Conferee Rep. Xavier Becerra declined to talk specifically about the situation but noted that Democrats are unhappy about the offsets.

“I’m not interested in hurting middle-class workers, regardless of where they work, to help other middle-class workers. It seems to me that’s a wash,” the California Democrat said. “We’ve always said to our Republican colleagues, to the degree we have to come up with pay-fors, they should be common-sense pay-fors, and ultimately what the pay-fors are going to be ... that’s the reason why you haven’t seen [a deal]. That’s still part of the discussions.”

The talks to remove the federal worker pension cuts have serious implications on the leaders’ ability to report the package out of the conference committee.

As of late this evening, it was unclear that any of the Senate Republican conferees would vote in favor of the plan. Without Senate Republican support, all four of the panel’s Senate Democrats would need to support the package for it to be approved, making Cardin’s vote crucial.

Earlier in the day, sources indicated that GOP conferees Sens. Jon Kyl (Ariz.) and John Barrasso (Wyo.) — both members of Senate Republican leadership — were unlikely to support the deal. These same sources said that Sen. Mike Crapo (R-Idaho) might be the most likely to flip but that even those chances were slim.

Senate Democratic aides indicated that House Republicans were looking for some cover from Senate GOP approval, but the eleventh-hour press on Senate Republicans as leaders scrambled for compromise seemed almost too late given how they had been absent from negotiations before tonight. 

“Senate Republicans have been largely out of these talks,” Senate Democratic Conference Vice Chairman Charles Schumer (N.Y.) told reporters Tuesday.

Aides in both leadership and close to the conference committee said the majority of negotiations was between Baucus and Camp, with the involvement of top leaders. The issues raised by other conferees have consumed the debate since those same leaders felt they were close to striking a deal.

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