The budget reconciliation packages passed by the Senate and House contain a number of sleeper items that will have a dramatic effect on the paychecks, pensions and health care of everybody working for Uncle Sam, or retired from government or the military.
Each of the budgets is so complex (and sometimes internally conflicting) that people are just beginning to figure out what is in them. There is good news, bad news and some very confusing news for government types.
To good news, for military retirees working in government, is that their paychecks are safe. Retired officers and enlisted personnel now in civil service jobs will have their federal salaries reduced by the amount of their pensions. No change in current law is proposed in either the Senate or the House budget package. Originally House Democrats had proposed a budgetary trade-off. It would have cut civil service salaries of military retirees in return for keeping the March and September COL (cost-of-living raises) intact for all government retirees. The Republican version of the budget passed by the House makes no change in current dual compensation laws.
The bad news for retired personnel, including 100,000 former feds and military people in metro Washington, is that they probably will not be getting a catchup-with-inflation raise this September. That boost, of at least 4 percent, probably will be delayed until March 1982.
Both the Senate and House budget bills would eliminate the September COL raises permanently. Both plans would limit retirees to one full COL raise per year, effective each September. There is very slim chance that the twice yearly COL adjustment system can be saved, if Senate-House conferees get enough pressure from constitutents and federal and postal organizations. But there is talk that the Senate might accept the House version of the budget. If that happens, there will be no conference.
Rep. Frank Wolf (R-Va.) believes the twice yearly COL system could have been saved on the House floor, if Rep. Richard Bolling (D-Mo.) had allowed a roll call vote on a motion to ask the House Budget Committee to reconsider its recommendation for a single annual retiree raise. Wolfe says the twice yearly COL people demonstrated in a voice vote that they had the strength to save the double COL adjustment system. Bolling ruled that the anti-COL people had shouted louder. At any rate, unless a small miracle happens soon, retirees will have to wait until March of each year for inflation catchups.
The confusing news is a bit of conflicting language in the House bill dealing with the Federal Employees Health Benefits plan. If it goes the "wrong" way for civil servants, some health insurance premiums next year could jump 100 percent or more, cutting into the 4.8 percent raise feds are due this October.
The House bill contains language that would make FEHB the primary payer for medical costs of retirees whose bills are now picked up by Social Security. In the same bill there also is language that would keep the system the way it is, with Social Security remaining the primary payer. The two provisions are in direct conflict. There also is language that would cancel out whichever side wins (the FEBH or Social Security), and cut off all medical payments for federal employes enrolled in FEHB who also are eligible for Social Security medical benefits. If the House bill passes in its present form, it would be illegal for either the FEHB or Social Security to pay health costs of retirees eligible for both programs.