- The Washington Times - Monday, September 5, 2005

Congress is back earlier than planned because of the devastation caused by Hurricane Katrina. Even a few days added to the legislative year can be a good thing for feds — especially when Congress has a full calendar of bills that would improve the pay, pensions, premiums, etc., for white-collar civil servants, who number about 300,000 in the Washington-Baltimore area.

Expect Congress to pull its annual legislative end run to add to the amount of the pay raise the president has proposed for civil servants. This would be the 13th year it is put into play. The president’s budget called for a 2.3 percent raise. Now he has decided to go with a formula in the complex 1990 Federal Employees Pay Comparability Act that would give feds 2.1 percent.

But each year, regardless of which party is in control at either end of Pennsylvania Avenue, Congress ensures a higher civilian federal pay raise by inserting language into a veto-proof appropriations bill — in this case, the one funding vital operations for federal moneymakers such as the Internal Revenue Service and the U.S. Mint. That language would guarantee civilian feds the 3.1 percent raise that is fixed for members of the uniformed military.

Barring something drastic, Congress will win again and feds will get the higher raise in January.

But other equally valuable bills are pending that probably are down the tubes. Most had a slim chance to begin with, but because the legislative and executive branches will be preoccupied with the aftermath of Hurricane Katrina, chances for any improved fed perks have faded.

There is strong support in Congress to give retired federal and postal workers the so-called “premium conversion” option. Premium conversion means they could elect to pay their federal health care premiums in pretax dollars. That translates to a smaller tax bill — anywhere from $250 to $500 — each year. Virtually all feds enjoy the premium conversion perk, even if they don’t know it.

But once people retire and their income shrinks, they get hit with a tax surprise. Their premiums no longer are deducted on a pretax basis. That increases their tax bill, in many cases even as their total income shrinks.

Premium conversion for retirees is being championed by Rep. Thomas M. Davis III and Sen. John W. Warner, both Virginia Republicans. They normally get what they want from the congressional leadership, but extending the premium conversion benefit to retired federal workers would cut into federal tax revenue, controlled by the watchdog House Ways and Means Committee and the Senate Finance Committee.

Their strategy is not to let the bills come up for a vote.

The same is true for bills that would modify or repeal what many retired civil servants, schoolteachers and public employees call the Social Security “evil twins.” The twins are windfall and offset.

Windfall can reduce by as much as $300 each month the Social Security benefit earned by fed or other public employees whose primary pensions come from work not covered by Social Security. They qualify for Social Security, but just barely.

Offset is even tougher on a much more needy group. The offset formula reduces and in most cases wipes out the unearned spousal or survivor benefit under Social Security if the person claiming that benefit gets a pension from the Civil Service Retirement System.

There is strong bipartisan support to eliminate windfall and offset. That would boost the retirement benefits, earned and unearned, for millions of retired feds, and for many public employees who didn’t pay into Social Security. In fact, there are enough pledged votes in the House and Senate to pass windfall/offset repeal bills.

That is if they can be brought up for a vote — again the problem, which some would call a duty, of the House and Senate committees. They are charged with maintaining revenue sources unless an alternate can be found. Boosting or adding Social Security benefits for thousands of public-sector and federal retirees would cost a ton of money. Although many members of Congress have pledged to vote for the repeal, it’s probably a safe bet that many are praying it never comes up for a vote.

This year, their prayers are almost certain to be answered.

Retiree COLA

People who get monthly retirement checks from the government, the military or Social Security are removed from the White House versus Congress pay battle.

The retirees’ pay is indexed to inflation and, so far in the countdown, their January cost-of-living adjustment (COLA) is set at 3.2 percent. If August and September living costs rise (the August data will be out in midmonth), so will the January raise for the retirees.

• Mike Causey, senior editor at Federal News Radio AM 1050, can be reached at 202/895-5132 or [email protected] radio.com.

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