Workers comp reform has lawmakers crisscrossing partisan lines

Joe Davidson
Columnist December 7, 2011

A funny thing happened on the way to federal workers’ comp reform.

It’s a right-is-left-and-left-is-right situation that confuses partisan stereotypes.

Joe Davidson writes the Federal Diary, a column about the federal workplace that celebrated its 80th birthday in November 2012. View Archive

The House, controlled by Republicans not known for their cuddly-wuddly approach to federal employee issues, last week approved workers’ comp legislation that is hailed by federal labor organizations.

Last month, a committee in the Democratic-controlled Senate, a body that is generally more worker-friendly, advanced a bill that would sharply tighten the screws of the Federal Employees’ Compensation Act (FECA).

And the administration of President Obama, who was strongly backed by federal unions, came close to calling a segment of beneficiaries delusional when the administration proposed benefit cuts for some workers injured on the job.

The Senate action, by the Homeland Security and Governmental Affairs Committee, would mean a significant hit for workers’ comp beneficiaries.

For those eligible to retire, the Senate bill would set compensation benefits for workers with no dependents at 50 percent, instead of the current two-thirds of the person’s salary at the time of the injury. Those with dependents would have their benefits sliced from 75 percent to two-thirds, during their working years. There would be another drop to 50 percent when they hit retirement age. Currently, no one faces a retirement age reduction in benefits, which increase with inflation and are not taxable.

“That is simply an unacceptable penalty for growing older,” National Treasury Employees Union President Colleen M. Kelley said about the Senate’s legislation.

Meanwhile, the House has approved legislation that would provide additional compensation, up to $50,000, for workers whose injuries result in facial disfigurement. It also would provide additional funding, up to $6,000, for funeral expenses. Payments in these areas have not increased since 1949.

The Obama administration has described the current program with language that could make rock-ribbed conservatives proud.

“FECA creates direct disincentives to return-to-work in two significant ways,” Gary Steinberg, the Labor Department’s acting director of workers’ compensation programs, told House subcommittees in April and May, repeating his points before a Senate panel in July.

“The first and most far-reaching,” he said, is “computed at 75 percent tax free; FECA benefits frequently exceed the employee’s pre-injury take-home pay.”

The second problem, according to Steinberg, is FECA benefits can be more than retirement annuities, and that means “injured workers may have an incentive to consciously or unconsciously resist rehabilitation and instead, in certain cases, may cling to the self-perception of being ‘permanently disabled.’ ”

But in a letter to Senate committee members, Beth Moten, legislative and political director of the American Federation of Government Employees, cited a 1998 Government Accountability Office report and said lower-wage federal workers, in particular, would be hurt by a cut in benefits because they “generally receive less in FECA benefits than their pre-injury, after-tax wages.”

The administration suggested setting a uniform benefit level at 70 percent for everybody covered by FECA.

Employee organizations didn’t care for that suggestion. They like the Senate’s action even less.

“On behalf of the nation’s injured retired and active federal employees, we hope the Senate makes this [House] proposal law and abandons a harmful proposal currently awaiting a vote by the full [Senate] chamber that would burden injured federal workers in their older years,” Joseph A. Beaudoin, president of the National Active and Retired Federal Employees Association, said last week.

While FECA politics are topsy-turvy, there are some elements of this debate that fit nicely into the regular Democratic and Republican cubbyholes.

Sen. Daniel K. Akaka (D-Hawaii), chairman of the subcommittee on the federal workforce, took a principled stand, telling colleagues he “cannot support a bill that cuts elderly disabled employees benefits, especially retroactive changes that will change benefits for many who are already injured. We simply must not change the rules after the fact for disabled employees who were relying on the promise of these benefits.”

And in the House, the Oversight and Government Reform Committee has approved legislation pushed by Chairman Darrell Issa (R-Calif.) that would remove the Postal Service from FECA and create a new program that would require postal employees receiving workers’ compensation to take retirement benefits when they reach that age.

The American Postal Workers Union said the legislation “would have a disastrous effect on employees who suffer relatively minor, temporary injuries, because it would force them to retire.”

Ron Watson, a National Association of Letter Carriers consultant, said Issa’s plan “would take us back not only to the time before the New Deal, but also to a time before the very origins of progressive social legislation.”

It’s that kind of rhetoric that keeps the partisan divide nicely (and perhaps accurately) in place.

Follow the Federal Diary on Twitter: @JoeDavidsonWP

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