It's a classic pocketbook issue.

Since 2000, federal employees have been able to pay their health insurance premiums on a tax-free basis. Many federal retirees think they should get similar treatment.

But extending "premium conversion," as it's called, to retirees would require a change in tax law, and Rep. Thomas M. Davis III(R-Va.) and others, who have pushed for that change in the last three congressional sessions, are back at it.

"We're talking about a modest amount of money, but to those on fixed income, this could have a real impact," Davis said as he again introduced a bill to extend the tax break. The bill would result in average savings of $820 a year for federal retirees, he estimated.

Under the bill, federal civil service and military retirees would pay their monthly health-care premiums through a pretax deduction from their annuities. The bill also would permit active-duty military personnel to deduct from their taxable income certain supplemental premiums or enrollment fees for Tricare, their military health insurance.

The tax code permits employees to pay for health insurance with deductions that are excluded from income and Social Security payroll taxes. It does not, however, allow employers to offer premium-conversion benefits to their retirees, the sore point that the Davis bill would address.

In recent years, Davis has gotten such legislation through the House Oversight and Government Reform Committee, which he chaired until this Congress. But the measure has always faltered because the House Ways and Means Committee, which has jurisdiction over tax policy, has balked at taking up the issue.

The likely cost of the bill appears to be the sticking point. According to a Congressional Budget Office estimate, extending the tax break to federal retirees would cost about $600 million over 10 years.

Davis hopes to build bipartisan support for this year's measure. Reps. Steny H.Hoyer (D-Md.), the House majority leader; Chris Van Hollen(D-Md.), who has a seat on Ways and Means; and Jon Porter(R-Nev.) have signed on as chief co-sponsors.

The Washington area congressional delegation and about half of the Ways and Means Committee also have agreed to be listed as co-sponsors of the bill, Davis said.

The National Active and Retired Federal Employees Association and the Military Coalition, a group of 35 military and veterans organizations, are supporting the Davis effort.

"More than just retirees should care about this legislation," said Margaret Baptiste, president of the employees association. "Imagine the shock of a newly retired federal employee when she receives her first annuity check and learns that the federal government no longer uses pretax compensation to pay her share of health insurance premiums . . . just when it's needed the most."

Hazards at InteriorAn Interior Department study has found a number of health and safety hazards at the department's Main and South buildings, with about a dozen classified as potential threats to employees and the environment.

Mike Cyr, division chief for facilities management services, said that planning to correct hazards is underway and that a meeting with employee groups has been scheduled for March 1 to discuss the study's findings.

The study, conducted by a consultant Jan. 22-25, found that Interior needs to improve handling of hazardous waste, such as oil, paint, and fluorescent lamp tubes that could release mercury into the atmosphere if broken.

"Because no system for the proper disposal of hazardous waste or unneeded hazardous materials is provided to employees, the only options available to employees are to abandon these items in various mechanical spaces or discard them illegally," the study said.

The study was released by Public Employees for Environmental Responsibility, a watchdog group that has contended that the department's handling of a headquarters renovation project has routinely subjected Interior employees to chemical vapors, welding fumes and debris dust. About 2,000 employees work in the headquarters complex.

Frank Quimby, a department spokesman, said air quality is tested daily and meets standards set by the Environmental Protection Agency. Although the study found at least two areas where asbestos had crumbled and was loose, "there has been no dangerous exposure to employees," Quimby said. "These areas are fairly out of the way."

Studies to identify possible hazardous workplace conditions are planned for all of the department's major facilities. In this case, Quimby said: "We don't think it is something that should alarm employees or people who visit the building, because there is no actual threat to human health and safety. These are all potential threats."

Stephen Barr's e-mail address is barrs@washpost.com.