- The Washington Times - Tuesday, July 22, 2008

Roughly one in four adults in the Metro Washington area will be getting a permanent economic stimulus boost next January. That’s when half a million active and retired feds, 100,000 members of the military family and folks on Social Security will get raises ranging from 3 to perhaps 6 percent or more.

The increase for retired civil servants and their survivors, and for military retirees and their survivors is now on target to be 5.7 percent. It could be higher if living costs for the months of July, August and September go up. The retiree raise is a cost of living adjustment (COLA) that kicks in every year to help them keep pace with inflation.

Unlike the retiree COLA, which is insulated from political and budget considerations, the raise that federal and military people will get depends on what a politically-occupied Congress does (or doesn’t) do before it adjourns for the year. Currently, two figures are on the table:

The first figure is the 2.9 percent raise for civilian feds proposed by President Bush. It would go into effect unless Congress - as it is trying to do - raises the ante.

The second number, which would provide for a basic 3.9 percent raise for civilian workers, is making its way through Congress. It is likely to be attached to a stopgap spending bill (known as a Continuing Resolution) that would fund agencies whose budgets haven’t been approved for the fiscal year that starts Oct. 1.

The point is that the COLA - which will also go to the huge number of people who get Social Security benefits - is linked to inflation while the pay raise is a political decision.

The good news for the area’s 275,000 civil servants and feds based in every state (except Alaska and Hawaii) is that whether the White House or Congress wins the pay fight, the actual increase will be higher. That’s because once a final figure has been set, the president is expected to designate one percentage point of it to locality pay.

There are 30-plus locality pay areas ranging from cities with a large federal presence - like Washington, San Francisco and New York - to smaller locales such as Huntsville, Ala. The final pay raise for all those workers will be based on a complex formula in the 1990 pay law that was designed to adjust federal pay based on hometown private sector salaries, not living costs.

(Postal workers, who bargain separately for wages through their unions, are not included in the January pay raise, but postal retirees can and do get the same annual COLAs.)

So how does this work? Look at what happened this year. The pay raise figure for civil servants in the Washington-Baltimore area was 2.5 percent. But after locality pay was factored in (again by a mysterious process known only to a few bureaucratic alchemists) the actual pay raise for local folk was 4.49 percent.

The final COLA for retirees - and for people who get Social Security benefits - won’t be known until the inflation rate has been tallied through Sept. 30. So the 5.7 percent figure could go up, if inflation does, or drop slightly if it goes down.

The majority of current federal retirees are under the old Civil Service Retirement System (CSRS). They will get a full COLA. The small but growing number of workers who retired under the less generous Federal Employees System, which replaced CSRS in the 1980s, will get a diet COLA that is one percentage point less than the CSRS raise.

Whatever the amount it will be more - in some cases 100 percent more - than most private sector retirees will be getting. That’s because the federal government is the only major employer in the nation that indexes pension benefits to inflation. About half of all retired American workers don’t get any retirement benefits, outside of Social Security.

Double/Triple Dippers?

A substantial number of retirees will get two COLAs and some will get three inflation adjustments. The put-down term for them is “double dippers,” although that’s hardly fair. Some people get retired military pay and Social Security, or a civil service annuity and Social Security. Some - who retired from the government, the military and under Social Security - will get the January COLA on all three of the benefits they earned.

So call them “lucky” if you must. But labeling them as double or triple dippers isn’t fair. A lot of them have the medals, and scars, to prove they’re worth it!

Mike Causey, senior editor at Federal News Radio AM 1050, can be reached at 202/895-5132 or mcausey@federalnewsradio.com.

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