Nearly 10,000 present and former senior government executives, most of them residents of this area, should be getting checks this week for up to $4,000 in back pay owed each of them by Uncle Sam.
Checks were mailed Thursday to people who were members of the Senior Executive Service between Oct. 1, 1979, and Dec. 31, 1981, according to the Senior Executives Association, which represents many of the top-paid employes.
The back pay is being issued to settle a case brought by a group of executives in Milwaukee several years ago. The executives successfully argued that Congress acted improperly in denying them the same percentage pay raises that went into effect for rank-and-file civil servants.
The final settlement, totaling $39 million, called for maximum payments of about $6,000. But deductions for taxes, insurance and lawyers fees will reduce those top payments to about $4,000, said Carol Bonosaro, SEA's executive director.
The payments will not make any change in salary for SES members, who are paid betweeen $61,296 and $72,300. Some executives who have retired will have to have their pensions recomputed as a result of the back pay award. Pension Tax Showdown
The Senate Finance Committee may vote this week on a controversial proposal to eliminate a post-retirement tax advantage currently in effect for federal workers, more than 14 million state and local government workers and some private-sector employes.
The House tax reform bill would eliminate the tax-free pension contribution period for workers retiring after July. The reform bill before the Senate committee would phase it out by July 1988.
Under current law, pensions of persons who contribute to their own retirement (and pay taxes on those contributions while working) aren't taxed until they get back all the money they contributed. For the typical civil service retiree, that no-tax period lasts about 18 months.
Both the Senate and House plans would require retirees to pay taxes on a portion of their annuities -- the government contribution -- immediately upon retiring. The amount taxed would be based on the life expectancy of each retiree.
Sen. Paul Trible (R-Va.) is heading a bipartisan Senate effort to block the pension tax change. Opponents argue that it is unfair to change longstanding retirement rules, and that it could trigger a massive retirement exodus before any such change went into effect, for 200,000 federal workers are currently eligible to retire.
Opponents of the change believe they have 10 votes against the proposal in the committee, which has 11 Republicans and nine Democrats.
Republican Sen. John Chafee of Rhode Island has agreed to introduce an amendment to kill the tax change. Lobbyists who oppose the change say nine other members, most of them Democrats, have agreed to vote with Chafee. But they need 11 votes to carry the day.
Republican committee members are Chairman Bob Packwood of Oregon; Robert Dole (Kan.); William Roth Jr. (Del.); John Danforth (Mo.); Chafee; John Heinz (Pa.); Malcolm Wallop (Wyo.); David Durenberger (Minn.); William Armstrong (Colo.); Steve Symms (Idaho) and Charles Grassley (Iowa).
The Democrats are Russell Long (La.); Lloyd Bentsen (Tex.); Spark Matsunaga (Hawaii); Daniel Patrick Moynihan (N.Y.); Max Baucus (Mont.); David Boren (Okla.); Bill Bradley (N.J.); George Mitchell (Maine) and David Pryor (Ark).