- The Washington Times - Monday, February 23, 2004

Longtime federal employees know that this is the time of year when bean counters — elected and appointed — present their laundry lists of ways to save money at the expense of civil servants and retired government workers.

Most times those recommendations, such as proposals to boost tax revenue by eliminating the home-mortgage interest deduction, never come to pass. They permit the politician who proposes them to say he (or she) tried, they grab headlines, they justify the existence of some organizations, and they scare the liver out of whatever group is being targeted.

It’s a political dart game played with beanbags. Savvy civil servants learn not to lose too much sleep while horrible changes or cuts in pay, insurance or other benefits are being considered.

But that was then, and this is now.

This year active-duty feds, retired government workers and their spouses would be wise to stay tuned. Don’t panic, but stay tuned.

The reason is that some of the proposals that soon will come out of the Senate and House budget committees or the Congressional Budget Office will be considered seriously.

They will range from plans that would trim federal health costs, by trimming benefits or herding workers and retirees into different plans, to proposals that could tie federal pay to the cost-of-living index rather than the cost-of-labor yardstick now required. Federal retirees get raises based on inflation. This year, they got a 2 percent adjustment.

Federal workers will wind up with a 4.1 percent raise, retroactive to January, for the year. Although many feds refer to their annual pay increases as cost-of-living adjustments, their politically controlled raises have far outstripped inflation in the past decade.

Agencies that once spoke cautiously about maybe, possibly, perhaps, someday exploring the idea of pay for performance now assume they will be under it within two years.

The pay-for-performance concept, which brings cheers from private-sector types, would base workers’ pay raises on grades they get from their bosses. Automatic January increases no longer would be automatic, and the within-grade longevity raises, worth 3 percent, that workers get every one, two or three years would be ended.

The Defense Department and the Department of Homeland Security are moving to set up those systems. Other agencies will follow. Feds fear it will mean a return to the spoils system.

Contracting out, which has eliminated thousands of federal jobs, will continue with the blessings of the White House and many members of Congress from both parties. Political appointees like contractors, because they generally do good work and because they often are more responsive than tenured career civil servants.

More agencies will be encouraged or forced to eliminate programs with the slack taken up by contractors. More agencies will be urged to make it tougher for federal workers — fighting for their jobs in competitive-bidding exercises — to win.

Mike Causey, senior editor at FederalNewsRadio.com, can be reached at 202/895-5132 or mcausey@federalnewsradio.com.

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