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House Panel Backs Tax Relief for Federal Retirees and Military

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By Stephen Barr
Friday, June 17, 2005

A bipartisan bill that would permit government retirees to pay their health insurance premiums with pretax dollars and allow military personnel to take a tax deduction for premium costs was approved yesterday on a voice vote by the House Government Reform Committee.

"Although not a permanent answer to rising health care costs, this important legislation will take the next step in helping to improve the quality of life for those retirees and active-duty personnel living on fixed incomes," said Rep. Thomas M. Davis III (R-Va.), the committee's chairman.

Rep. Jon Porter (R-Nev.), who helped steer the bill to committee passage, said it would provide the typical federal retiree with tax savings of about $400 per year. Rep. Danny K. Davis (D-Ill.) suggested that the bill would extend to retirees the "premium conversion" benefit that the government began providing civil service employees in October 2000.

The lawmakers would like to provide the military, too, with an above-the-line deduction for Tricare supplemental premiums that are paid annually.

The bill's prospects are unclear. It has stalled in past years, apparently because of concerns about its potential cost and whether such a benefit would have to be extended to private-sector retirees.

Tom Davis said yesterday he planned to work with Rep. Bill Thomas (R-Calif.), chairman of the House Ways and Means Committee, "to get this legislation to the floor." Thomas's committee holds primary jurisdiction over the bill.

Sen. John W. Warner (R-Va.) has introduced a similar bill in the Senate.

Congressional passage of legislation allowing retirees to pay their health insurance premiums with pretax dollars is a priority for the National Active and Retired Federal Employees Association and Federally Employed Women.

FEW, a nonprofit that represents the interests of women in government, said it plans to ask Thomas to hold a hearing and call for a vote on the Davis bill. Davis has 202 co-sponsors and the House "should be given the opportunity to vote on this benefit," said Rhonda Trent , FEW's vice president for congressional and government relations.

Charles L. Fallis , the NARFE president, said the Davis bill took a positive step in a long journey. "NARFE is determined to keep pushing until we reach the finish line -- enactment," Fallis said.

The committee also approved and amended a bill, championed by Rep. James P. Moran Jr. (D-Va.), that would permit almost all parts of the government in Washington to offer tax-free transportation fringe benefits to employees. The U.S. Postal Service was not included in the bill because it provides a similar benefit, Davis said. The bill also would permit agencies to operate shuttle services between federal offices and Metro and other transit stations.

Another tax break was approved for federal workers whose agencies are reimbursing them for student loan repayments. A bill, sponsored by Tom Davis, would exclude the reimbursements from taxable income, bringing the government in line with exemptions that have been provided educational institutions and nonprofits that encourage students to work in government.

Sen. George V. Voinovich (R-Ohio) introduced a similar bill yesterday. The Senate bill would allow federal agencies and the military to repay student loans tax-free.

Voinovich said he had expanded his bill to include the armed forces because the military missed its recruitment goals last year. The bill could affect more than 34,000 military personnel, Voinovich estimated.

Talk Shows

W. Roy Grizzard Jr. , assistant secretary for disability employment policy at the Labor Department, will be the guest on "Code Red!" at 6 a.m. today on WMET radio (1160 AM).

Art Gordon , president of the Federal Law Enforcement Officers Association, and J. Adler , the group's first vice president, will be the guests on "FEDtalk" at 11 a.m. today on http://federalnewsradio.com/ and WFED (1050 AM).

Conrad C. Lautenbacher Jr. , head of the National Oceanic and Atmospheric Administration, will be the guest on "The IBM Business of Government Hour" at 9 a.m. tomorrow on WJFK radio (106.7 FM).

"Is Federal Workforce Morale Low?" will be the topic for discussion on the Imagene B. Stewart call-in program at 8 a.m. Sunday on WOL radio (1450 AM).

E-mail:barrs@washpost.com


© 2005 The Washington Post Company

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