A bill that would provide $769 million in federal funds over the next 25 years to help the District of Columbia pay pensions to thousands of its retired employees was approved yesterday by a House District subcommittee.
The pensions - regarded as generous by the standards of most other cities - were ordered by Congress for police, firefighters, teachers and judges a half century ago, but no long-term funding was provided. As a result, payments to retirees now come out of the city's annual operating budgets.
The city currently owes 7,000 retirees and 12,700 active employees more than $2 billion in estimated benefits, a figure that grows each day.
The House District Fiscal Affairs Subcommittee decided not to make any inroads into the $2 billion, a figure that was described as staggering by Mayor Walter E. Washington when he asked the subcommittee last month to give the city more help.
Yesterday's approval of the $769 million plan came at a subcommittee session in which Del. Walter E. Fauntroy (D.-D.C.) pleaded for a higher level of assistance, but was told with unusual candor by his colleagues that a more open-handed approach would guarantee defeat of the bill on the House floor.
The subcommittee's action yesterday splits the ultimate cost of the pensions. The city continues to owe - and eventually will pay - the $2 billion. The U.S. Treasury would subsidize the creation - by city contributions and payroll deductions from current employees - of a pension fund that would be self-sustaining by 2003.
The bill goes to the full District Committee, probably on April 25, and - if it wins support there - to the full House and perhaps then to the Senate. A similar bill won House subcommittee approval last year, but never reached the floor.
Despite its shortcomings, the bill is regarded at the District Building as a breakthrough by officials who still hope a new task force headed by Vice President Mondale will recommend some contribution toward the $2 billion backlog.
The measure applies to police, firefighters, teachers and judges, but not to other civil service employees of the District government who are covered by other U.S. pension programs to which the city contributes.
The pending bill, sponsored chiefly by Rep. Romano L. Mazzoli (D-Ky.), calls upon the District to pay - based upon actuarial projections of the probable life spans of retirees - whatever percentage of the city's annual payroll would make the pension fund self-supporting within 25 years.
Supplementing this, the U.S. Treasury would make annual contributions starting at $42 million and tapering downward as the pension fund is built up.
Mazzoli told Fauntroy that "pure crass hardball politics" dictated a lower level of support than the city wanted, regardless of the merits of its case. Mazzoli said the bill faces attack by "those professional Cassandras (in the House) . . . who have made a career of teeing off at the District."
Rep. Stewart B. McKinney (R-Conn.), agreeing with Fauntroy that Congress is solely at fault for the city's pension morass, warned of "the imminent bloodbath we would all take" if a more liberal bill moved to the House floor.
Rep. Ronald V. Dellums (D-Calif.), the subcommittee chairman, said "the principle (of making inroads into the $2 billion debt) cannot be debated, (but) the practical realities . . . probably outweigh the principle."
Even with the aid granted by the bill, Fauntroy said the District's pension payments to police and firemen would reach $72 for every $100 of active payroll costs by 1983.
New York City, which has come under political attack for the generosity of its pension programs, now owes $30 for every $100 of payroll costs, and Los Angeles only $15, Fauntroy said. These figures should remain stable since both cities have funded pension plans.
Even under the most generous formula he advocated without success yesterday, Fauntroy said the District liability would fall only to $41.
At yesterday's session, Fauntroy sought to ease restrictions written into the bill that would prevent the pension fund from investing in bonds issued by the District government or in real estate located in the city.
Instead, at Mazzoli's urging, the subcommittee stiffened the restrictions even further, prohibiting investments in Maryland and Virginia property or bonds as well.
McKinney, agreeing, said this restraint would remove "the incipient call (upon the pension fund managers) to help your city," as New York City pension funds have done in recent controversial loans to the city to help keep it financially afloat.
"I am more and more convinced . . . that politics - whether it is Connecticut's or Washington's - and pensions don't mix," McKinney said.
The subcommittee rejected a request by the mayor that the city have the main voice in managing the pension funds, but increased the city's minority representative on the proposed management board.
The bill also makes a number of changes in pension provisions, but not generally in the level of benefits.
Instead of making it possible for police and firefighters to get a pension after 20 years of service regardless of age, the bill would grant pensions only after the age of 50 and 25 years of service, except in the case of disability.