- The Washington Times - Monday, January 3, 2005

Dot.coms can and do bomb, and tourism can plummet during times of real or perceived trouble, but Uncle Sam keeps rolling along rain or shine in good times and bad.

So despite what the business and political pages say, it is the federal dollar — in the forms of salaries and contracts — that keeps Washington afloat and immune from the economic downturns that still plague many U.S. cities.

So the only thing better than one federal pay raise, which will benefit about 300,000 workers in the Washington-Baltimore region, is a comparable raise for 65,000 uniformed military personnel in the area, and a cost-of-living adjustment for 100,000 former feds and military people who are now retired.

Oh, and there is the identical Social Security raise for an additional tens of thousands.

Effective this month, retired federal and military personnel and their survivors get a 2.7 percent cost-of-living adjustment. It reflects the modest rise in inflation from October 2003 through October 2004. That money already has appeared in the payments that retirees and Social Security recipients should have received yesterday.

Also in the works is a 3.5 percent across-the-board raise for uniformed military personnel.

Retroactive to the first pay period — January — is the federal civilian pay raise, which in the Washington-Baltimore area is worth 3.71 percent. This time last year, the feds got a 4.42 percent raise under the locality pay system.

The increase will push the average federal salary in the Washington area to slightly more than $78,000 per year.

Area civil servants will receive more than additional money in their paychecks, even after taxes, deductions and higher health premium costs. In addition to the immediate benefits of any pay raise, the increase means that feds who invest a percentage of their pay in their tax-deferred Thrift Savings Plan, the federal 401(k) plan, will be putting in a higher dollar amount each payday.

The value of vacation time — annual leave in government lingo — also goes up. Because feds can cash in unused annual leave when they retire, those who bailed out by Dec. 31 will have most of their unused annual leave payable at the new and higher 3.71 percent raise rate. For some high-paid employees with lots of unused leave, that is a parting gift of several thousand extra dollars.

The 2005 pay raise also boosts the value of some life insurance policies — which are based on salary. And they dramatically increase the future value of federal retirement benefits that are based on the employees’ highest three-year salary average (most private firms use a high-five formula) and length of service.

In addition to receiving the regular January federal pay raise, more than a third of all white-collar government workers also will come due sometime this year for a time-in-grade raise worth an additional 3 percent. So it’s possible that many feds, without getting a promotion, will see their salaries go up nearly 7 percent this year.

Dental coverage

Sometime this summer, the Office of Personnel Management is expected to announce a series of optional dental health plans that federal and postal workers, and retirees, can purchase with their regular federal health insurance. Unlike regular health insurance, for which the government pays 72 percent of the premium, the dental premiums will be the total responsibility of people who elect the new plans.

Over the years, Congress has confused the picture by ordering the government to hold down premium increases. Members of Congress and their staffs have the same health plans, and pay the same premiums, as regular federal workers. Because of the high cost of dental benefits, the government has refused to let any health plan improve its coverage in that area.

Now Congress is telling the OPM to come up with an optional dental package or packages, and key members have announced that it is outrageous that the government expects employees and retirees to pay the full premium for the highly sought-after and expensive perk. Watch for the same members, who have demanded that the government hold the line on premium increases, to now insist that Uncle Sam share the premiums.

Inauguration Day

It will be a paid holiday, not a day of administrative leave, for most federal workers in the Washington area. That means that the thousands who must work — many to provide security coverage for the large number of VIPs, foreign and domestic, who will be here Jan. 20 — will get premium pay.

Out-of-town feds, who are outraged that Inauguration Day is a D.C.-area-only holiday, need to be reminded about Uncle Sam’s equally generous leave policy for Patriots Day in Boston and Mardi Gras in New Orleans. Inaugurations happen every four years. The other holidays are annual events.

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

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