- The Washington Times - Tuesday, June 18, 2002

A big break finally has arrived in the long-running fight against the so-called "windfall" formula that gobbles up a big chunk of the Social Security checks of retired feds, cops, teachers and other public employees.

The National Association of Retired Federal Employees says that Sen. John Kerry, Massachusetts Democrat, last week became the first senator to introduce a companion bill to the Windfall Elimination Provision wending its way through the House.

There are hundreds of House sponsors to legislation that would modify the WEP formula, which reduces Social Security benefits as much as $275 per month to feds who didn't spend a full career (30 years) paying into Social Security.

It has never had any Senate backing until now.

This being an election year, Mr. Kerry's companion bill is expected to pick up lots of co-sponsors, especially since so many retired schoolteachers (who have a powerful lobby) are hit by the WEP.

The House proposal by Rep. Barney Frank, Massachusetts Democrat, would let retirees keep the first $1,200 of combined civil service-Social Security benefits. The windfall formula would be applied only to amounts over that figure.

Super scam

Feds from the giant U.S. Postal Service to a dozen employee agencies continued to be tantalized by false reports of a super-buyout program in the works.

The Internet reports, sometimes looking like bona fide newspaper stories, tell of big-time ($50,000 to $75,000) buyouts plus enhanced pension benefits to workers who agree to retire by 2003.

In fact, there is no such "secret" bill. The maximum buyout amount stands at $25,000 before taxes. That isn't going to be changed. Congress must OK each buyout and how long it will last. Here are the agencies with buyout authority and the end dates (although several will ask for and get extensions):

•Defense (several buyout options), though September 2003.

•Energy, through January 2004.

•Bonneville Power Administration, through January 2003.

•Internal Revenue Service, through January 2003.

•Department of Veterans Affairs, through January 2003.

•Treasury Inspector General for Tax Administration, through January 2003.

•CIA, through September 2003.

•General Accounting Office, through December 2003.

•National Security Agency, indefinite.

•Government Printing Office, through October 2004.

•National Aeronautics and Space Administration, through September 2002.

•Agency for International Development, through December 2002.

Catch-up contributions

Here are answers to some of your questions about the proposal to allow federal, military and postal investors who are age 50 and older to make catch-up contributions to their tax-deferred Thrift Savings Plan.

The White House supports the plan and congressional leaders have approved it, but they are looking for ways around objections raised by the Congressional Budget Office.

The House bill is by Rep. Constance A. Morella, Maryland Republican, the Senate version by Sens. Daniel K. Akaka, Hawaii Democrat, and John W. Warner, Virginia Republican.

Both would let eligibles contribute $1,000 this year, up through $5,000 in 2006. Thereafter, anyone who is 50 or older could contribute $5,000 each year.

The contributions would be via payroll deduction (so they could be made on a pre-tax basis) and wouldn't be subject to any percentage limitation or ceiling on the amount of contributions to a 401(k) plan. Also, you couldn't contribute until age 50 (or older). Someone turning 50 in the year 2006, for example, could make the full $5,000 payment for that year but couldn't make any other contributions.

Prospects for the bill are excellent, especially if the White House which supports it makes a special appeal to Congress. Whether Democrats who have targeted Mrs. Morella for defeat would object is unknown.

Copyright © 2019 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide