President Reagan appears to have pulled the rug from under advocates of mandatory Social Security coverage for government workers. Backers of "universal coverage" for feds, state government aides and employes of nonprofit concerns exempt from Social Security believe those folks should join -- and kick into -- the financially troubled system like other American workers.
The mandatory coverage argument is that it doesn't make sense for the people who make Social Security laws (members of Congress) and those who manage the program (federal workers, including staffers at the Social Security Administraton) to view it from the outside.
Federal and postal workers -- most of whom are violently opposed to any mergr of their retirement system with Social Security -- believe universial coverage is a ploy designed to get the dollars they pay for their staff retirement plan and use them to prop up Social Security. Feds fear any linkup with Social Security, which pays smaller benefits and makes people wait longer to collect those benefits.
The civil service retirement plan was designed as an independent, primary payer plan. Although more than half of all federal workers eventually qualify for some Social Security benefits (based on other jobs), the two systems are very different. Feds pay more for their program, and taxes on annuities. Social Security benefits are tax-free.
The Department of Health and Human Services (formerly HEW) is officially neutral in the mandatory Social Security argument. But unofficially, HHS brass from the Carter and Reagan administrations have pushed mandatory coverage. That concept has been endorsed by various blue ribbon pension-study groups. There is legislation pending in Congress, chiefly a bill by Rep. Barber Conable (R-N.Y.) to mandate Social Security coverage for government workers.
Conable believes it would provide greater protection to the families of short-service federal workers who die before they establish eligibility for benefits under the in-house federal retirement system. Conable also believes it is unwise, and unfair, for legislatorsl and federal workers who oversee the Social Security system for everybody else no to feel the effects of the decisions they make.
The key to universal coverage is the attitude of the president. If he buys the idea, insiders believe it could zip through Congress since the primary opposition comes from federal and postal groups rather than from the public at large. In other words, if the president wanted it, he could probably get it. But he doesn't want it, according to top aide Max L. Friedersdorf. He has, on White House stationary, told antimerger legislators that the boss doesn't want to link the two systems. Here is part of his letter to Rep. Frank Wolf (R-Va.):
"Knowing of your continued concerns regarding the independence of the federal civil service retirement fund, I just wanted to assure you that the president explicitly decided that sound national retirement policy requires that these two funds be maintained as separate entities. . ."
The next question is how solid is that pledge? Candidate Reagan, you may recall, promised the National Association of Retired Federal Employees that he -- unlike candidates Jimmy Carter and John Anderson -- was opposed to any cutback in the frequency of inflation raises for federal-military retirees. After becoming president, however, Reagan switched and proposed dropping one of the two inflation raises retirees get each year.
If the Reagan administration means what it says, and if what it is saying is there will be no linkup of the two systems, feds and their families can relax. The big push for mandatory coverage in Congress comes from the Republican side and there is little chance it will push very hard, so long as the president opposes it.