The package of civil service benefit cuts proposed by the Senate Budget Committee could fall apart -- and be replaced by something much worse for federal workers and retirees -- if Congress balks at the social security portion of the overall plan.
The committee rejected a proposal by the White House to raise the federal retirement age from 55 to 65 and cut federal salaries by 5 percent. In its place, the committee came up with a plan to save money by freezing pay and pensions in 1986, raising the employe retirement contribution from 7 to 9 percent, and by delaying for one year within-grade raises. That would save an estimated $4.8 billion in the next fiscal year, the committee said.
The overall deficit-cutting package, which still must pass the Senate, assumes a $5.8 billion savings by slapping a 1986 freeze on social security increases. That is political dynamite, because about one of every six Americans gets some form of social security payment.
If the social security proposal is rejected by the Senate, the budget committee would have to go back to the drawing board to make cuts in some other program. One of the first places it would look would be the civil service.
If larger cuts are assigned to the civil service programs, that would almost certainly revive plans to cut federal pay next year and to raise the retirement age.