- The Washington Times - Monday, April 6, 2009

For the past dozen years, the annual battle over the size of the next federal pay raise has had all the drama of a fixed pillow fight between two creaky gladiators. But things change.

President Obama started out using the same script (with updated numbers) as former President Bill Clinton and former President George W. Bush. His budget calls for a 2 percent pay increase next January for nonpostal federal workers and a 2.9 percent increase in 2010 for uniformed military personnel. Congress rarely accepted the low-ball figure first proposed by Mr. Clinton and, later, by Mr. Bush.

Federal unions, all of whom endorsed Mr. Obama over Sen. John McCain, Arizona Republican, then demanded Congress follow the precedent of pay-raise parity — that is, giving the civil servants the same percentage increase as the military. That was moving along nicely with both the civilians and the soldiers apparently heading for a 2.9 percent adjustment.

Now, however, there is a strong bipartisan push in both the House and Senate to give the military more: a 3.4 percent adjustment in 2010 with civilian feds — at least for now — stuck with either a 2 percent or a 2.9 percent raise. Backers of the higher military raise believe the White House will go along with the change, which represents millions of additional dollars.

Federal unions will almost certainly push their pay-raise parity argument. In addition, because government workers have very influential friends in both the Democratic and Republican leadership, they are likely to get it.

Whatever the final amount, federal workers in cities will get more than the amount set by Congress. That’s because presidents usually allocate a portion of the national raise (the amount that goes to feds from Boston to Butte) toward locality adjustments. Washington-Baltimore feds have done very well when local private-sector wages are used to compute their final, total raise.

This year, for example, white-collar government workers nationwide got a 2.9 percent increase. However, when locality pay (based on private-sector wages, not on local living costs) were factored in, feds here got a 4.78 percent raise.

Military personnel, by contrast, got the 2.9 percent raise because they are not paid locality differentials.

Complicated, yes? Exciting, not so much.

Second thoughts about work

Every year, hundreds of retired federal workers return to work for the government. Some come back to their old agencies, others try a different outfit. Most have their salaries offset by the amount of their federal annuities. Some specialists — with badly needed language, security or high-tech skills — can be hired and are allowed to keep their full annuity plus the full federal salary for their job level.

People who left the government before retirement can return and buy back their service time. That means a much bigger annuity when they do retire. However, those people are all under the old Civil Service Retirement System, which was phased out for new hires in the mid-1980s. Most people hired since then are under the Federal Employees Retirement System.

The FERS plan does not allow re-employed feds to buy back their service credit time. However, legislation approved last week by the House would give rehired FERS employees the same buy-back option available to CSRS workers. Rep. James P. Moran, the Virginia Democrat who wrote the bill, said it would help ease any brain drain caused by a mass exodus of experienced feds. He said a huge portion of the work force (average age about 47) will be eligible to retire within the next eight years.

Many believe that the impact of the brain drain could be reduced by making it more attractive for former FERS feds to return to their jobs and finish out their careers.

Mr. Moran’s bill also eliminates a glitch in CSRS rules that prevents many longtime employees from going part time for a couple of years before they retire. Under the proposal, which still must be approved by the Senate, workers under the old CSRS system could move to working part-time without reducing their retirement benefits in the future.

The retirement package, which would also offer a Roth IRA option for investors in the federal Thrift Savings Plan, had an easy time in the House. However, it could run into serious — possibly fatal — opposition when it reaches the Senate. That’s because the retirement improvements are “riders” on a much more controversial bill that would give the Food and Drug Administration greater control over tobacco.

Backers say it makes sense to treat tobacco as a drug that needs federal regulation. Opponents say it’s an unfair shot at states where the soil and climate make it difficult to grow orchids, pineapples or healthy citrus fruits.

Mr. Obama favors the change — Mr. Bush last year threatened to veto it — but it must clear the Senate before it can be sent to the White House. Look for action in early May.

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