A congressional advisory panel reported yesterday that the government could save at least $6 billion annually on Social Security over the next 75 years if it took all state, federal and local government employes into Social Security.
The savings would allow a slight reduction in scheduled Social Security taxes.
It would also be possible to improve disability and retirement benefits for millions of public employes, the panel said.
But this could only be achieved, the panel acknowledged, by reducing some advantages that some public employes -- particularly some federal employes -- now have.
The panel mentioned as three major possibilities: reducing "windfall" Social Security benefits for future retirees drawing both a Social Security and civil service pension; reducing slightly (up to 5 percent) the monthly benefits to be received by the highest-paid future federal and other civil service retirees; and requiring some public employees to pay slightly higher aggregate payroll taxes and contributions than they now pay in total pension contributions. [Details of impact on individual workers. Page C2].
Emmett Andrews, president of the American Postal Workers Union, said government employes fear these plans could lead to serious erosion of federal employe benefits under the civil service retirement system.
"We're going to fight it. We'll knock the . . . socks off it. We've raised a war-chest of $1 million to fight it. And the other unions have raised another $2 million," he said.
The panel, headed by Boston Attorney Joseph Bartlett, was created in 1977 when Congress, looking for new funds to ease the Social Security tax bite, considered bringing public employes into the system. The panel report merely laid out a series of options, making no specific recommendations.
But Bartlett, briefing the press, said he favors bringing federal employes and state and local government workers under Social Security -- in an arrangement in which covered workers would get Social Security, plus supplemental government pensions. He said combined benefits for federal workers should be kept up to about the same benefit level as they now receive under the federal civil service retirement system alone. Retirement age under current law -- 55 after 30 years -- wouldn't be affected. r
Bartlett said all currently retired workers and those near retirement -- perhaps 40 or over and with at least 10 years in the federal system -- should be guaranteed the right to remain in the current system. Others would go into Social Security plus a supplementary pension, which would ultimately bring the savings and changes contemplated.
About 2.5 million federal civilian employes and 3 million state and local workers aren't covered by Social Security, in many cases having their own retirement systems.
The report said that for some types of beneifts -- disability, wives' benefits, Medicare -- Social Security affords a better blanket of protection for many, especially low-income and intermitent workers. Bringing workers under Social Security would help provide this protection.
A second problem, it said, is windfall benefits. Social Security pays a relatively high benefit to low-income retirees in relation to what they pay into the system. When a federal worker, already getting a civil service pension, qualifies for Social Security on the basis of a brief period in private employment, he gets these extra high benefits too even though he isn't low-income. This excess is the windfall.
The report said that if public workers got Social Security plus a supplementary pension -- adding up in the case of a federal worker to about what he would have gotten under the existing system from civil service alone, $840 million a year in windfall benefits could be eliminated and about $5 billion a year in new taxes in constant dollars could be obtained.