- The Washington Times - Monday, March 14, 2005

At one time, the leading inside-government myth was that federal workers don’t pay income taxes. In fact, they do, and they have a better payment record than many other occupational groups.

But there is a new myth in town associated with the fight over reforming the Social Security system.

These days, it is hard to leave a union meeting, or civic or veterans group, without somebody handing you a copy of an article about the games politicians play. The most popular and enduring myth is that Congress is outside the Social Security system.

In fact, members pay the same payroll taxes the rest of us do. If you are trying to settle a bar bet, refer to Public Law 98-21, which required Social Security coverage for anybody entering government service after 1983, when a new retirement plan was set up.

Another myth, used by conservatives to discredit liberal members, and by liberals to dump on conservative politicians, is that members of Congress — even short-service legislators — retire on inflation-protected pensions for life, equal to their salary.

If true, which it isn’t, it would mean anybody who retired or wasn’t re-elected in 2004 would get a starting pension of $162,500. In fact, congressional retirement benefits, although generous, are computed like civil service benefits: They are based on length of service and the worker’s highest three-year average salary.

Like regular federal workers, members of Congress are either under the old Civil Service Retirement System or the newer Federal Employees Retirement System. FERS replaced CSRS in the mid-1980s. All feds had a chance to switch from the old to the new system. Most civil servants declined, in part because unions warned it was a trick of the Reagan administration.

But members of Congress, Democrats and Republicans, did switch in big numbers. About 300 former members of Congress are retired under the CSRS system, and 92 are retired under the FERS system.

In the future, most of the retirees will be under the FERS program, which offers a smaller civil service annuity but the chance to sock away more tax-deferred funds in the federal/military 401(k) plan. At the end of 2003, the average member of Congress retired under CSRS got an annuity of slightly more than $56,000, and those retired under FERS got a civil service benefit of just more than $39,000.

That’s a far cry from retiring on full pay.

Pay for performance

Despite lawsuits and go-slow recommendations from the Government Accountability Office and many politicians, the departments of Defense and Homeland Security are moving quickly to implement new hiring, firing, promotion and pay-for-performance rules.

Some feds will be placed under the system by August, with an everybody-under-the-tent goal of 2009 or sooner.

The 30-plus unions that deal with the Defense Department have sued to block implementation of the program for the Pentagon’s 700,000 civilians.

Your Social Security check

If you are one of the 600,000 still-working feds under the old CSRS pension program, your future Social Security benefits are likely to be cut or eliminated.

The windfall law can cut more than $300 per month from the Social Security check of a CSRS retiree with less than 30 years of service under Social Security. It can eliminate the spousal or survivor Social Security benefit of a CSRS retiree with his or her own federal annuity.

Pro-fed groups have been trying for years to modify or eliminate the windfall/offset formulas. This year, a bill to repeal them both, by Rep. Howard P. “Buck” McKeon, California Republican, has 212 co-sponsors. Although those numbers are great this early in the session, they don’t guarantee windfall or offset will be knocked off this year — or next.

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

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