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Posted at 6:00 AM ET, 12/16/2010

Tax-cut package includes commuter benefit for feds

By Ed O'Keefe

Eye Opener

Federal workers may not like next year's planned pay freeze, but are likely to still be eligible for a $230 monthly transit benefit

The perk is part of $858 billion tax-cut package approved Wednesday by the Senate and set for passage in the House later today.

Workers -- including federal employees -- who use public transportation to and from work are eligible for the benefit, which was set to revert back to $120 per month in January if Congress didn't act.

"Retention of the higher amount is an important gain for working men and women," said Colleen M. Kelley, president of the National Treasury Employees Union, which represents more than 150,000 federal workers.

Despite the transit benefit, some federal retirees will not like other elements of the package that grant a 2 percent tax cut to workers covered under Social Security. The tax break will apply to federal employees who are part of the Federal Employees Retirement System, but not those covered by the older Civil Service Retirement System, because they are not covered by Social Security.

As colleague Joe Davidson wrote Monday, that means about 426,000 federal workers covered by CSRS would pay more in taxes next year, while most Americans pay less.

Excluding CSRS members is "unfair," Kelley said. She and others want lawmakers to reduce withholdings by an additional 2 percent from the wages of workers who don't pay into Social Security, or to give them a 2 percent credit on federal income taxes.

But with the tax deal likely headed for final passage, such a change seems unlikely.

Is that fair or unfair for feds? Good or bad? Leave your thoughts in the comments section below.

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By Ed O'Keefe  | December 16, 2010; 6:00 AM ET
Categories:  Eye Opener, Workplace Issues  
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Comments

Leaving out CSRS annuitants while benefiting Social Security recipients is simply politics as usual. As a CSRS annuitant, I don't mind paying my fair share -- that's FAIR share. The relatively small number of CSRS beneficiaries leaves us more vulnerable to Congressional shenanigans. Leaves a really sour taste in the mouth of one who devoted a lifetime to national security.

Posted by: FormerFed206 | December 16, 2010 10:00 AM | Report abuse

Congress is an embarassment.

If they're only going to get anything worthwhile done in December, how about not being in session except in December?

It doesn't take 12 months in session to spend $1 trillion like a bad case of diarrhea, so why go through the motions?

Posted by: getjiggly1 | December 16, 2010 10:35 AM | Report abuse

Considering the current state of Social Security, I am definitely not in favor of the tax cut. I would be very, very grateful for the transit benefit, though!

Posted by: Jamie13 | December 16, 2010 10:56 AM | Report abuse


FormerFed206 said:

Leaving out CSRS annuitants while benefiting Social Security recipients is simply politics as usual. As a CSRS annuitant, I don't mind paying my fair share -- that's FAIR share. The relatively small number of CSRS beneficiaries leaves us more vulnerable to Congressional shenanigans. Leaves a really sour taste in the mouth of one who devoted a lifetime to national security.
_________________________

You pay nothing into Social Security. A 2% reduction of nothing is nothing. Doesn't get much more fair than that.

CSRS is such a lush retirement package I have no idea what you're griping about. Doesn't say much about your sense of patriotism.

I'm a Fed and grateful for my job and the opportunity to serve.

Posted by: ludditegirl | December 16, 2010 12:22 PM | Report abuse

But they want more, ludditegirl, they always want more.

Posted by: getjiggly1 | December 16, 2010 3:22 PM | Report abuse

It is not only CSRS employees that are affected--there are over 5 million state and local government workers that do not pay social security tax as they pay into a local pension plans.

All of these public employees pay federal tax--why can't a federal tax credit be implemented that will have the same effect as the 2% reduction in SS tax? Why should these public employees be excluded?

Posted by: katehutch21108 | December 16, 2010 4:45 PM | Report abuse

The 'crats don't get the reduction because Congress spent the past two years on Obamacare instead of budgets. Enjoy.

Posted by: getjiggly1 | December 16, 2010 5:06 PM | Report abuse

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