The Reagan administration may have a tough time persuading an election-year Congress to chop future benefits of millions of increasingly militant and politically active government and military retirees.
In the budget that goes to Congress next week, the president is likely to propose major changes in the way annuities of retired government and military personnel are adjusted to keep pace with inflation.
One proposal would limit retiree raises (there are 100,000 U.S. retirees here) to either the actual rise in the cost of living, or the percentage pay increase that active feds get, whichever is less. Currently federal and military retirees get COL raises based the annual rise in living costs.
If the either-or formula were on the books, federal and military retirees who are due an 8.7 percent inflation catch-up next month would, instead, be held to a 4.8 percent raise because that is what the 1981 civil service pay raise was.
Another proposal would limit COL raises for retirees whose annuities now exceed the annuity they would receive if they retired from their same pay grade today. Because of COL raises and pay caps, some retirees now get bigger annuities than they would qualify for if they retired today from their same grade.
Under that proposal, retirees whose annuities exceed amounts they would get if they retired today would be limited to 75 percent of the COL increase each year until the annuity benefit for those retiring from the same grade catches up.
Imagine the paperwork if that one sees the light of day? Benefits would have to be recomputed annually for thousands of people to see whose exceed current payout levels.
Another budget item, the least painful for retirees, would save the government money by rounding off annuities to the lowest dollar. Currently annuities are rounded to the nearest dollar.
All the proposals, if they became law, would trim future cost increases in the nearly $30-billion-a-year federal-military retirement program by cutting raises for those retired, and those who retire in the future.
The political kicker is that there are lots of federal and military retirees out there, and this is an election year.
Retired people vote in greater percentages than most age groups. Polls show that most federal retirees voted for Ronald Reagan last time around based in part on his promise (broken) not to tamper with federal-military retirement benefits.
Former feds and their families cast a lot of votes. If you are a member of the House or Senate, and would like to stay that way, consider these numbers. This is a rundown of the federal and military retiree population in selected states:
D.C., 56,000 federal, (5,200 military) retirees; Maryland, 72,000 (29,000); Virginia, 94,000 (66,000); Alabama, 35,000 (28,000); Arizona 28,000 (26,000); California, 190,000 (187,000); Colorado, 27,000 (28,000); Georgia, 43,000 (42,000); Illinois, 52,000 (23,000); Massachusetts, 45,000 (19,000); Michigan, 25,000 (16,000); Missouri, 35,000 (21,000); New Jersey 44,000 (21,000); New York, 95,000 (33,000); North Carolina, 30,000 (36,000); Ohio, 51,000 (25,000); Oklahoma, 35,000 (21,000); Pennsylvania, 83,000 (32,000); Texas, 94,000 (107,000); Washington State, 45,000 (40,000) and West Virginia with 9,000 federal retirees and 6,600 military retirees.