- The Washington Times - Monday, March 9, 2009

Although the period of January through March here is usually cold and snowy, this is also the peak season when rumors — designed to frighten millions of active and retired federal workers — are in peak bloom.

Thanks to the Internet, bogus rumors or bent reports transmitted by telephone from office to office now flash around the world in seconds and show up with alarming frequency in your e-mail.

There are some old favorites that get revised each year. Some are updated to make them appear timely. But even though most of them seem silly or unlikely, people bite each year.

Some are revised (unintentionally) when the Congressional Budget Office issues its annual list of ways that Congress could save money. Some of them involve trimming, modifying or eliminating benefit programs that are near and dear to the hearts of longtime feds and people who have retired from government.

Many people assume that because they come from the highly regarded CBO they are serious proposals that Congress will act on. In fact, most are in the round-up-the-usual-suspects categories: ideas that would save money but will never be seriously considered.

This so-called Death Wish List, plus ancient and off-the-wall encore performances on the rumor mill, includes:

• A secret federal buyout aimed at getting the half million working feds under the old Civil Service Retirement System to quit and get a cash payment, or be forced to convert to the less generous Federal Employees Retirement System plan. FERS has a less generous guaranteed civil-service annuity benefit and a less generous plan to protect government retirees from inflation. CSRS employees get full inflation catchup adjustments each January regardless of the age of the retiree. The cost of living catchup for FERS retirees doesn’t begin until they hit age 62. The increases are 1 percentage point less than the actual rise in living costs as measured by the Bureau of Labor Statistics.

• A major change in the Federal Employees Health Benefits Program (FEHBP) that would base premiums on the employees’ length of service. Short-time civil servants who retire in 2010 or later would have premiums increased 2 percent for every year of service less than 20 years. It would reduce the government’s payment to health premiums (now an average of about 70 percent) on a pro-rated longevity scale. This is a regular CBO proposal that has never been seriously considered by Congress. But it takes on a life of it’s own each year when the media reports on the CBO list.

• Allow nonfederal workers and retirees to buy into the FEHBP. Even though they would have to pay the full premium (without benefit of any cost-sharing by government), the concept makes many feds and retirees nervous. That’s because many of the people who are not without insurance have major health problems, are elderly or otherwise — because of their medical conditions — are now virtually uninsurable. Pro-fed and pro-retiree groups fear that allowing large numbers of outsiders into the fed-only program would enlarge the risk pool and eventually raise premiums for everybody. While this has been around for decades — and was once considered by the Clinton administration — it has never gotten to first base on Capitol Hill. Still, times change and people are nervous.

• Putting all federal retirees under a diet-COLA (cost of living adjustment) system like the one that already applies to workers and retirees covered by the FERS program. If adopted, this very long shot would also apply to people under the more generous CSRS retirement formula. The CSRS employees would also get less-than-inflation adjustments and could, in the extreme, not be eligible for any COLA until age 62. Although this is another one that feds should not lose any sleep over, it pops up each year about this time.

Pay Raise

Federal unions — all of which endorsed Barack Obama for president — are less than happy about the president’s plans for the 2010 white-collar federal pay raise. Under his budget proposal, civil servants would get a 2 percent pay raise next January. Military personnel would get a higher 2.9 percent raise.

Union leaders are confident they can persuade Congress to give both groups the same 2.9 percent. Some cynics say the pay differential was intentionally built into the budget so that federal unions — after they achieve pay raise parity — can say they won a big benefit for their members. But federal union leaders say that there was no consultation or collusion on the pay numbers and that they must work hard to get equal pay-raise treatment for all members of the federal family, whether they wear a suit and tie to work or are in uniform.

Mike Causey’s column runs Mondays. He can be reached at 202/895-5132 or [email protected]

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