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By Stephen Barr
Washington Post Staff Writer
Tuesday, February 2, 1999; Page

President Clinton's budget would give federal employees their largest pay raise since 1981 and would offer them a new benefit – long-term care insurance.

Clinton's fiscal 2000 budget, released yesterday, also asks Congress to reauthorize "buyouts" aimed at encouraging federal employees to voluntarily leave agencies that want to shrink or restructure their staffs. The proposed buyouts, worth up to $25,000 each, would expire Sept. 30, 2001, administration officials said.

In contrast to previous budget plans, Clinton's request does not propose new cuts in employee benefits. Despite the request for renewed buyout authority, the budget shows that the government's downsizing has stopped, with overall, non-postal executive branch employment stabilizing at 1.8 million workers.

Approximately 270,000 civil servants work in the Washington area, and their pay and benefit packages help underpin the region's economy. In addition, about $20 billion goes to government contractors in this area every year.

Clinton's budget would boost the pay of the government's civilian and military personnel by 4.4 percent in 2000. But pressure already has started building to put more money into federal salaries, suggesting that the size of the pay raise federal employees receive next January will not be known until after a series of White House, congressional and union negotiations later this year.

Last week, the Senate Armed Services Committee, chaired by Sen. John W. Warner (R-Va.), recommended a military pay increase of 4.8 percent. At the request of Sen. Paul S. Sarbanes (D-Md.), the committee included a provision supporting "parity" in military and federal civilian salary adjustments.

Yesterday, Sarbanes pointed out that "pay parity . . . has existed for more than a decade between federal civilian and military employees." Reps. Constance A. Morella (R-Md.) and Steny H. Hoyer (D-Md.) said they also would push for equal adjustments.

A senior administration official, who asked not to be identified, said the White House "understands the importance of maintaining parity, particularly when you have people working side by side." But the official said the proposed 4.4 percent raise would keep government personnel at "appropriate pay levels," according to a Labor Department index that tracks private-sector wages.

Local federal workers received a 3.68 percent pay raise for 1999, bringing the average federal white-collar salary in this region to $59,307. Throughout the government, the budget projects spending $247.5 billion on compensation and benefits for military and civilian personnel in fiscal 2000.

The long-term care insurance proposal would cost about $15 million over five years in administrative costs and could prove popular with an aging work force.

"Legislation is necessary to allow OPM [Office of Personnel Management] to offer this coverage to federal workers and retirees, and I hope Congress will act quickly," OPM Director Janice R. Lachance said.

Sen. Barbara A. Mikulski and Rep. Elijah E. Cummings, both Maryland Democrats, have introduced legislation similar to the administration's long-term care proposal. Rep. Joe Scarborough (R-Fla.), the House civil service subcommittee chairman, will probably offer a competing version, a subcommittee staff member said.

Clinton's budget would make long-term care insurance available to federal workers and retirees through a group program, administered by OPM. Employees would pay all their premiums, which the budget projected to be 10 percent to 15 percent lower than individual rates.

Premiums depend on the employee's age. Details are being worked out, but one projection shows that a 40-year-old worker would pay about $200 a year for self-only coverage, officials said. At the moment, officials said, coverage would be offered to employees, retirees, their spouses, parents and in-laws.

The proposed benefit would cover expenses for nursing home, elder care and in-home assistance, the officials said. Enrollees would be eligible when they could not perform two of six daily activities, such as bathing and dressing, stipulated in existing health care laws.

Clinton's budget also would allow newly hired federal employees to begin immediate participation in the government's 401(k)-type thrift plan and roll over any private-sector accounts into the federal savings program.