Intense pressure from federal workers and retirees is having some effect on the budget summit group that is considering proposals to cut the deficit and head off furloughs for millions of government workers.
The White House- congressional summit group has tentatively agreed to make about 25 percent of all cuts from federal employee and retiree entitlement programs. The trick is where to cut.
Last week the negotiators approved tentative cuts that included a one-year delay in federal-military pension increases, a reduced cost of living adjustment formula for future retiree raises and elimination of the popular lump-sum pension payment option.
But that was last week.
Monday evening, congressional Democrats at the budget summit made an offer that recommended:
Elimination of the lump-sum pension option that the administration endorses.
Unspecified savings of about $900 million in the Postal Service and federal health insurance program for workers and retirees. Those cuts would be designated by the House Post Office-Civil Service Committee.
Elimination of cost-of-living adjustments for military retirees under age 62.
Delaying the cost-of-living adjustment for federal and military retirees for three months. The retirees are due to get a COLA of about 4.9 percent in January.
But that was Monday evening. Since then, the group has moved from Andrews Air Force Base to Capitol Hill and broken down into a smaller, more workable group.
As of yesterday, that smaller group is considering:
Whether to delay retiree COLAs for three months or to adopt a plan that would give federal retirees the same inflation protection as Social Security recipients.
Under that plan, federal retirees would get full COLAs only on the first $975 of their monthly benefits (the Social Security maximum), with reduced COLAs on amounts above $975. The average federal retiree gets $1,100 a month.
Continuing the lump-sum option, now paid in two annual installments, but spreading it over three years.
Under this plan, retirees would get 20 percent the first year and 40 percent in subsequent years.
Additional proposals will probably crop up, and be discarded, before the summit group reaches final agreement.
Share the Misery
If the budget summit fails to come up with a spending plan in the next two weeks, most federal agencies will start furloughing employees because of lack of money.
A one-day-a-week furlough will mean a 20 percent pay cut.
Reps. Frank R. Wolf (R-Va.) and Constance A. Morella (R-Md.) said yesterday they would fight the furloughs. But if they come, they have pledged to take the same percentage pay cut as their furloughed federal constituents for as long as the furloughs last.
If other members made that pledge, there probably wouldn't be any furloughs.