Official Washington sometimes runs on the Three Ps: Possibilities, paranoia and politics. Hence this question:
Is the talk about a federal paycheck delay next fall paranoia, politics or a possibility?
At issue is whether your last check for the month of September might be held until early October. Such fiscal sleight of hand would "reduce" current fiscal year expenditures about $3 billion--by putting them over into fiscal 2001.
Wednesday's column revealed that eight Washington area House members--whose constituents include 15 percent of the federal population--were worried enough to write House Speaker J. Dennis Hastert (R-Ill.) on the subject. They said the issue of delaying one federal or military pay raise was raised by Republican staffers in House budget talks.
Some congressional Democrats and some federal union officials thought the column was overly flippant, and cynical, on the subject. The column noted that talk about the pay delay dealt with the military and that it had been quickly disavowed.
Folks who say it is a possibility--not paranoia or a Democratic political spin--say Republicans are having a hard time reaching their budget goals without dipping into Social Security trust funds or cutting popular public programs. Thus, they say, goofy ideas--such as delaying a pay raise a few days--are real, not science fiction.
The problem, for a column like this, is how to inform people without constantly scaring them to death? But in partisan Washington--where some folks wear elephants or donkeys on their pajamas--a balanced approach is not always appreciated--or understood.
The next issue is who gets credit if the pay delay doesn't happen. And who gets the blame if it does.
Pay Raise vs. COLA
Federal workers (and active-duty military personnel) will get a 4.8 percent pay raise in January. That's official. What isn't known yet is what percentage of that pay raise will be earmarked for locality pay. It will be up to the president--perhaps next month--to decide how much of the raise will go to all employees, and what percentage will be allocated to locality raises, which will vary city by city. The raise is less than half the amount due federal workers under the 1990 pay law, which was enacted to gradually close the pay gap between government and industry. Pay raises are based on wage changes in the private sector that are the result of union contracts, productivity and the state of the economy.
Federal retirees, meanwhile, are getting a cost-of-living adjustment of 2.4 percent in January. That, too, is official. The adjustment was designed by Congress years ago to keep federal-military and Social Security retirees current with inflation as measured by the consumer price index. Adjustments are not pay raises, and pay raises (even when Congress calls its own raise an adjustment) are not adjustments.
When inflation is high, retiree cost-of-living adjustments often are higher than federal pay raises. When inflation is low--as it has been for the past several years--the adjustments are lower than pay raises.
Years after the case was settled in court, an estimated 200,000 current and former federal workers are still waiting for a check from Uncle Sam. The money--yet to be designated--is due employees who were in special-rate jobs (engineers, scientists, medical professionals and the like) from 1982 to 1988. The amounts they get will depend on their grade and salary at the time, how long they were in a special-rate job and what portion of regular federal pay raises were denied them.
The National Treasury Employees Union has set up a Web site to keep people informed on the progress of the settlement. At this point, nobody needs to sign up for the back pay. The address is: www.nteu.org/specrates.html.
Next year federal and postal workers will have two new funds to invest in as part of their tax-deferred thrift savings plan. In addition to the C-fund (stocks), F-fund (bonds) and G-fund (Treasury securities), investors also will have an I-fund (international stock index) and an S-fund (small capitalization index).
Workers also will have the option of making quicker trades--although most financial planners warn against "market timing" as part of a long-range investment program.
Also next year, the dollar limit on the amount individuals can invest in a 401(k) plan will be raised to $10,500. The limit has been $10,000 for the past two years. That means employees under the Federal Employees Retirement System who make $105,000 or more a year will be able to make contributions up to a $10,500 limit.
Sunday, Oct. 24, 1999