The White House has decided to wait until January, when the president's budget goes to Congress, to propose substantive changes in the way federal and military retirement pay is adjusted for inflation.
Although some of those proposals, if made, will jolt the nation's 3 million government-military retirees, insiders say the plan to raise the retirement age for people in government will not be in the package. On Nov. 3 this column reported that the president was mulling over a laundry list of entitlement benefit cutbacks sent him by top advisers. But Office of Personnel Management chief Donald Devine says the biggest bombshell, the recommendation to raise the minimum retirement age from 55 to 62, was dropped from the package before it went to the White House.
Still under consideration, however, is a plan to link cost-of-living raises for U.S. retirees (civilian and military) to the lesser amount of either the Consumer Price Index or the Wage Index as measured by the Labor Department. Government annuities are now pegged to the CPI. It has been going up much faster than the Wage Index in recent years. Holding retired adjustments to the Wage Index or the CPI, whichever is lower, would save the government money and what many officials feel is fairer (but smaller) retiree raises.
Budget-cutters would like to apply the same either/or (CPI or Wage Index) measurement to Social Security benefit increases. But that would present political problems in an election year, since about one of every six Americans gets some sort of Social Security payment directly or indirectly. Adjusting the civil service-military system next year would, they believe, be a start in the right direction and it could be applied later to Social Security.
The administration is still considering legislation that would make it impossible for already-retired civil servants (and this includes members of Congress) from getting pensions that are larger than the current salary of the grade and job they retired from. More than 100,000 government retirees now get annuities that are larger than their salaries when they retired. A few get retired pay that is higher than the current salary of their job because annuities linked to inflation have gone up faster than civil service pay, especially for executives. (One of the recommendations sent to Reagan would limit retired pay to 80 percent of the current salary for the job and grade the worker retired from.)
Republicans in Congress anxious to "reform" federal retirement programs are less reform minded these days, after seeing Democrat Charles Robb beat Republican Marshall Coleman for the job as Virginia governor. The National Association of Retired Federal Employees believes that the heavy concentration of federal workers and retirees in Northern Virginia and in the Tidewater area worked against Coleman and the Republicans.
NARFE estimates that the vast majority of the retired federal workforce voted for Reagan in 1980 based in large part on his written promise to NARFE not to cut back the number of COL raises retirees get. Despite that promise, Reagan pushed for, and Congress approved, legislation that eliminated September cost-of-living adjustments for retirees who now get one raise a year -- in March. Retirees haven't forgotten that switcheroo. They are not shy about reminding politicians they haven't forgotten, that they have lots of time to campaign and they, like other senior citizen groups, have a high turnout at election time.
Executive Pay: Representatives Mike Barnes (D-Md.) and Frank Wolf (R-Va.) are busy buttonholing colleagues to get a pay raise this month for government executives . . . . Administrative law judges are getting friends in prestige law firms here, in New York and on the West Coast to lobby Congress to raise the $50,000 lid on government career pay.