Three Virginia Republican lawmakers announced yesterday they are reintroducing legislation that would allow civil service and military retirees to pay their health insurance premiums with pretax dollars, as federal and legislative employees do.
Sen. John W. Warner and Reps. Thomas M. Davis III and Jo Ann S. Davis said their proposal is the right thing to do and a way to recognize the importance of public service. "This is an inequity that ought to be rectified," Tom Davis said.
"Premium conversion," as the benefit is known, was granted to executive branch employees in 2000 and to congressional employees in 2001. The tax code does not extend the benefit to retirees.
The bill would amend the tax code and allow the government to subtract from monthly annuity checks the amount retirees pay for their share of health insurance. Such deductions lower taxable income, with recent estimates showing the benefit saves the typical federal employee $400 a year.
The measure has been pushed by the National Association of Retired Federal Employees but has not been granted a hearing by the House Ways and Means Committee, which controls tax legislation.
To get the bill moving, Tom Davis said, this year's proposal includes a referral to the House Government Reform Committee, which he chairs. He said Jo Ann Davis, chairman of the civil service subcommittee, would hold a hearing on the issue.
Two House Democrats, Henry A. Waxman (Calif.) and Danny K. Davis (Ill.), have joined as co-sponsors, Tom Davis said. An aide to Warner said the Senate bill has 14 co-sponsors.
Davis acknowledged that "a lot of budget pressures" may work against the bill's chances this year but called it a "health care issue" vital to retirees. According to estimates made last year, the bill would cost $370 million in its first year and $7.1 billion over 10 years.
Charles L. Fallis, the NARFE president, and Sue Schwartz, a deputy director of the Military Officers Association of America, joined the lawmakers on Capitol Hill for the announcement.
Sen. Paul S. Sarbanes (D-Md.) and Rep. James P. Moran Jr. (D-Va.) have succeeded in attaching provisions to the Senate and House budget resolutions that call on Congress to provide the same pay raise to the military and the civil service next year.
President Bush has proposed a 2 percent pay raise for the civil service and a 4.1 percent average raise for the military in his 2004 budget plan.
The "pay parity" amendments will give advocates for the civil service a bargaining chip when Congress starts writing appropriations bills this year. Sarbanes and Moran received support for their provisions from Warner, Sen. George Allen (R-Va.) and Tom Davis.
Federal unions, however, attacked the rest of the Budget Committee's resolution, which calls on the Government Reform Committee to cut almost $40 billion "of waste, fraud and abuse" over 10 years.
"These cuts would decimate the federal service," said Colleen M. Kelley, president of the National Treasury Employees Union. Bobby L. Harnage Sr., president of the American Federation of Government Employees, said, "To help pay for further tax relief for Bush's billionaire buddies, the House Budget Committee has decreed that federal employees must give up either a portion of their earned retirement benefits or their health care."
But Tom Davis, the Government Reform chairman, said employees and retirees should not worry. "We have a long way to go on it. . . . At the end of the day, we're going to be fine. It is a long process from the Budget Committee mark to the House floor to reconciliation, and Jo Ann [Davis] and myself and Frank Wolf [R-Va.] and a number of others on the Republican side will ensure that the benefits are untouched."
Hannah S. Sistare, executive director of the National Commission on the Public Service, will be the guest on "FEDtalk" at 11 a.m. today on federalnewsradio.com.
Dan Blair, deputy director at the Office of Personnel Management, will be the guest on "The Business of Government Hour" at 8 a.m. tomorrow on WJFK radio (106.7 FM).
"Workplace and Grief" will be the topic for discussion on the Imagene B. Stewart program at 8 a.m. Sunday on WOL radio (1450 AM).
Stephen Barr's e-mail address is