Retiree Cuts to Fund Katrina Relief
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Retiree Cuts to Fund Katrina Relief |
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A group of Republican House members called Wednesday for cuts to some federal
retirees' benefits to help offset the cost of Hurricane Katrina recovery.
The
House Republican Study Committee released a package
of recommendations known as "Operation Offset" Wednesday that
called for calculating retirement annuities for federal employees based on an
average of their five highest-earning years of service. Currently, employees'
annuities are based on a high three-year average. Adding two years of lower pay
would tend to decrease the average, and thus reduce retirees' defined benefits.
The
Republican Study Committee, headed up by Rep. Mike Pence, R-Ind., is made up of
about 100 House Republicans who push conservative social and economic policies.
The RSC said it estimates the change in retirement calculations would save $5.2
billion over ten years.
The
RSC also recommended lowering the government subsidy for some federal retirees
who participate in the Federal Employees Health Benefits plan. RSC members said
they want to "reduce health benefits for new retirees who had relatively
short federal careers, although it would preserve their right to stay in the
program." Currently, the government pays for 72 percent of all
participants' premiums, regardless of the length of their federal careers.
According
to a Congressional Budget Office analysis, under the proposal backed by the RSC,
"the government's share of premium costs would be cut by two percentage
points for every year of service less than 30. In the case of a retiree with 20
years of service, for example, the government's contribution would decline from
72 percent of the weighted average premium to 52 percent."
Charles
Fallis, president of the National Active and Retired Federal Employees
Association, said the proposals are insulting to federal employees.
"Not
only would these proposals dishonor the government's obligation to its workers,
but it also makes public service a much harder sell," Fallis said.
National
Treasury Employees Union President Colleen Kelley echoed Fallis' sentiments.
"This
is a deeply flawed proposal that falls disproportionately on the backs of those
who can least likely afford it," Kelley said.
The
RSC placed the retirement benefits proposals, which were only two among dozens
of cost-saving suggestions, under the title "Tough Choices in Tough
Times" in its report.
The
entire package of RSC spending-cut proposals, which total $500 billion, has
generated friction within the House Republican Conference, lawmakers and aides
said Wednesday.
"The
leadership has said repeatedly that we are willing to look at offsets that make
sense," a GOP leadership aide said. "But what they are offering is
just not realistic."
Most
of what conservatives are advocating in "Operation Offset" is a rehash
of policies fiscal conservatives have long trumpeted -- funding cuts for NASA
and the Corporation for Public Broadcasting, eliminating so-called pork in the
highway bill, cutting subsidies for Amtrak, and reining in foreign aid, among
others.
Still
other politically untenable proposals -- such as postponing the Medicare
prescription drug program for one year -- have some members concerned that
conservatives are "giving ammunition" to Democrats to attack them on
the already politically sensitive issue heading into the 2006 election cycle.
"We
need to be focusing on our fiscal record right now," the aide said.
Susan
Davis and Peter Cohn of CongressDaily
contributed to this report.
This
document is located at http://www.govexec.com/dailyfed/0905/092205r1.htm