By Bernie Becker - 01/04/12 06:49 PM EST
After a December standoff, Congress enacted a two-month extension of the payroll tax cut, which was first enacted late in 2010 and reduced the amount workers pay into Social Security from 6.2 percent to 4.2 percent.
Before the two-month extension passed, Republicans in both the House and the Senate proposed extending a pay freeze on federal workers to help pay for continuing payroll tax relief – an idea sharply criticized by NTEU and other federal employee unions.
A House measure passed in December would have also mandated higher employee contributions to pension funds.
In the end, the two-month package was paid for with higher fees on mortgages sold to Fannie Mae and Freddie Mac.
On Wednesday, Kelley also noted that some federal workers won’t even get the payroll tax cut, because they aren’t eligible to receive Social Security benefits.
Many federal employees hired before 1984 are not covered by Social Security and thus do not owe payroll taxes. Those workers pay a portion of their salary into their pensions.