The Senate and House will decide in the next couple of weeks on pension and Medicare-tax changes affecting the paychecks of all 2.8 million federal workers, and the annuities of 1.7 million retirees.
Item one: The Senate Governmental Affairs Committee has approved a 4 percent limit on cost-of-living raises for retirees for the next three years. That limit, which was mandated in the budget approved by the Senate and House, would limit inflation adjustments for civilian retirees to 4 percent in March 1983, 1984 and 1985 no matter how much living costs rise. At present, retirees get a COL raise each March (it was 8.7 percent this year) to help them catch up to the rise in living costs for the previous year.
The House Post Office-Civil Service Committee has refused to go along with any limit on retiree raises, but an amendment to put a 4 percent cap on cost of living adjustments (COLAs) will be offered on the House floor. Federal unions and area members of Congress are not sure they have the votes to defeat such an amendment.
Item two: The proposal to require federal and postal employes to pay 1.3 percent of salary beginning next January to help pay for Medicare. Backers say the plan, which would cost feds $108 to $450 a year depending on salary, would guarantee that federal workers would be eligible for Medicare coverage. They say that more than half of all federal employes eventually become eligible for Medicare already by virtue of civilian work under Social Security, and therefore they should pay what other people do.
Opponents of the plan say it is another unfair blow at federal workers, an attempt to shore up the financially troubled Social Security system and a first step toward bringing federal workers, who have their own retirement program, under the less generous Social Security system.
Both the Senate Finance Committee and the House Ways and Means Committee, which control Social Security legislation, have approved the 1.3 percent Medicare tax for federal workers. An attempt will be made to amend the House bill, to drop the Medicare tax. But again the votes are uncertain.
Sen. Donald Reigle (D-Mich.) next week will offer an amendment on the Senate floor to remove any cap on COLA's for federal retirees.
Maryland Sens. Paul Sarbanes (D) and Charles Mathias (R) favor full COLA catch-ups for the many retirees in their state.
Lobbyists who are trying to keep the limit off COLA's are hoping to persuade Virginia Sens. John Warner (R) and Harry Byrd (I) to support their position, which would benefit 70,000 U.S. retirees in the Old Dominion.
The next few weeks will decide if federal pensions are to be held below the rise in living costs, and if federal workers begin paying the Medicare tax next January.