Federal workers who are often confused about what is being done to them are in for an especially tough couple of weeks.
The ongoing budget drama raises lots of questions about pay and retirement. In most cases none of the questions can be answered.
This is the situation: Congress and the White House are under the gun to make major budget cuts. They must choose between two hard options by mid-December. The options:
To proceed with automatic budget cuts (as mandated by the Gramm-Rudman-Hollings Act) that technically went into effect on Friday. They mandate across-the-board reductions in nearly every federal spending program. If those cuts continue it could mean furloughs, cuts in travel and training, hiring freezes and in some agencies -- perhaps layoffs.
Devise a budget compromise that stops the across-the-board cuts in favor of specific program reductions. In either case Congress and the White House must act by about Dec. 16.
If Congress chooses the second option -- specific cuts -- this is what Senate- House budget negotiators have on the drawing board:
White-collar federal workers would get a January pay raise of 2 percent. That works out to about $540 per year for the average white-collar civil servant, and would replace the 3 percent pay raise that Congress had promised them.
Federal and military retirees would get a 4.2 percent cost- of-living adjustment in January. That full raise is in lieu of an earlier plan (now considered to be dead) that would have given retirees much smaller COLAs.
Eliminate within-grade seniority raises in this fiscal year (which runs through next Sept. 30) for all federal workers who become eligible for them. About four out of every 10 white-collar employes are due one of those raises over the next 12 months. Under the rules, which would be frozen for a one-year period, workers come due for a within-grade raise every one, two or three years, depending on their time in that grade.
Give federal workers who retire lump-sum payments that are equal to only 50 percent of the amount of money they contributed to their pension plan while working. Currently retirees can take full lump-sum payments which are considered as taxable income in the year they get them.
All of the proposals raise questions. Most can't be answered now. For example: When would the within-grade pay freeze and the lump-sum pension payment change go into effect? Would it be Oct. 1, the start of the fiscal year? If so, do people who have already taken the payments or gotten the raises since Oct. 1 have to give them back? No answers.
Is there still time for an employe to retire and get the full lump-sum payment? Again, no answers from Congress.
There is a chance that Congress will reject the proposal to reduce the lump-sum payments. But if it does it must come up with some other way to save an estimated $400 million.
None of this will be final and official until mid-December, and until then this state of confusion will continue.Retiree Meetings
The Silver Spring chapter of the National Association of Retired Federal Employees will meet at 1 p.m. today at the Schweinhaut Senior Center. The chapter will have its holiday luncheon Dec. 8 at the Langley Park Marriott Hot Shoppes. Call Gerald Gillman at 681-7265.