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Senate Panel Approves 60% Increase in Buyout Payments for Feds

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The Senate Homeland Security and Governmental Affairs Committee passed a bill on Wednesday that would raise the maximum buyout payment for federal employees from $25,000 to $40,000.

The legislation comes as agencies look for ways to downsize their workforces in response to directives from the Trump administration. Congress set the original Voluntary Separation Incentive Payment at $25,000 in 1993, and it’s remained unchanged since.

The committee approved the legislation by voice vote on Wednesday. If passed by Congress, the bill would also tie payments to the Consumer Price Index, and adjust them annually for inflation.

The Defense Department piloted a similar one-year buyout increase for its civilian employees in fiscal 2017, but the new bill would extend the increase to civilian and military employees across government.

The $15,000 bump in VSIPs could make leaving government more appealing to employees as agencies look for ways to decrease the size of their workforces. Agencies were required to submit reorganization plans to the Office of Management and Budget by Sept. 30, and although leaders have said the plans would focus more on increasing efficiency than reducing the workforce, tight budgets may make some cuts inevitable.

The Environmental Protection Agency has already contacted 1,200 employees with early retirement and buyout offers. The Interior Department and other agencies have also indicated plans to move forward with similar measures.

The White House asked Congress for an identical $15,000 raise in agencies’ buyout limits earlier this year ahead of the National Defense Authorization Act. The proposal wasn’t included in either the Senate or the House version of the NDAA, but the new bill would provide the requested incentives for workforce reductions.

While he welcomes any opportunity for federal employees to retire “with a few extra dollars in their pockets,” Steve Lenkart, executive director of the National Federation of Federal Employees, said he worries that the legislation risks helping to create a vacuum in agency leadership as top employees leave their posts ahead of schedule.

“At a time when most agencies are trying to fill critical vacancies, the increase in buyout payments may exacerbate the worker deficit especially in the upper ranks, which can lead to brain drain and a loss of institutional knowledge,” Lenkart told Government Executive. “This is exactly what some in Congress are trying to do. A better way is to plan strategically and execute a plan over a period of time defined in years, not months. As we’ve seen time and time again, Congress is no expert on running government.”