The typical government retiree would lose more than $6,000 in cost-of-living raises during the next few years if Congress passes the so-called balanced budget act, according to two House Democrats who monitor civil service matters.
Reps. Vic Fazio (D-Calif.) and Mary Rose Oakar (D-Ohio) base their estimate on a Congressional Budget Office study of the impact of a prolonged freeze on annual cost-of-living adjustments (COLAs) for ex-civil servants and military retirees.
The retirees, including more than 100,000 in the Washington area, now get the increases every year.
Fazio is cochairman of the Federal Government Service Task Force, an organization of House members whose districts include major federal and military installations. Oakar chairs the compensation and benefits subcommittee of the House Post Office and Civil Service Committee.
Senate-House conferees are now considering a Senate plan that would require the government to cut spending by $36 billion each year until the budget is balanced.
If the plan is approved by Congress, the cuts would come in large part from federal employe-retiree pay and benefit programs.
The proposal exempts Social Security, interest on the national debt and some major defense programs.
Those proposed exemptions mean that Congress and the White House would have to make the cuts in other government spending.
Under the plan, which congressional Democrats contend would give the president too much power over the federal purse, the White House could "sequester" funds that normally would be spent for annual raises for government employes and benefit adjustments based on inflation for federal and military retirees.
Earlier this year Congress approved, and the president imposed, a federal pay freeze for 1986. But that budget action does not affect federal and military retirees who are due a COLA adjustment of about 3 percent in January.
Based on the Congressional Budget Office's prediction of a 4 percent annual inflation rate, Fazio said, a succession of freezes or partial freezes could put many retirees -- and especially their survivors -- at the poverty level in a few years.
Fazio, whose Sacramento district includes many U.S. workers, said the typical fed who retires next year will get a pension of $13,700 a year. But the retiree's purchasing power would erode rapidly if COLAs were reduced or frozen, he added.
"If we're forced to freeze COLAs," Oakar said, "thousands of former career employes would be forced into dire financial circumstances because the federal government broke its commitment to them."
Federal and postal unions have launched an all-out attack on the balanced budget plan, arguing that it would lead to drastic cuts in domestic federal programs and federal jobs and would make pay and pensions a primary target for budget cutters.
Fazio said that "federal and military retirees have run the course, and they've done it well. They deserve our thanks for a job well done and they deserve a Congress that responsibly reduces the deficit fairly and equitably."
But, he added, "it is hard to accept the premise that it takes more courage to deny basic necessities to older Americans who helped shape our nation than for us in Congress to make decisions we are paid to make."