The House voted yesterday to keep making twice-yearly cost-of-living adjustments in the pension checks of federal retirees instead of shifting to a once-a-year increase as House budget-balancers proposed.
The vote, a lopsided 294 to 91, came after heavy lobbying by federal employe groups. The change which would have saved the government $756 million, would have affected 2 million military and civil service retirees, including 100,000 in the Washington area.
The proposal was included in a package of $10.2 billion in money-saving measures drafted by the House Budget Committee in an attempt to hold spending to targets that Congress agreed on last spring. House Democratic leaders had argued in favor of the change.
The House also voted yesterday to scrap a proposal by its Ways and Means Committee to collect $302 million in taxes from big chemical companies to help finance cleanup of oil spills and damage from hazardous waste materials.
The combination of actions yesterday trimmed the money-saving package to $9.2 billion, about $1 billion short of cutbacks that have been approved by the Senate. Congress voted earlier this year to order cutbacks of about $10.6 billion, but some revenue and cost estimates have since been changed.
Yesterday's vote on the government cost of living adjustment (COLA) pension issue does not necessarily kill the once-a-year COLA proposal. The shift to an annual adjustment for federal pensioners has been approved by the Senate. The matter now goes to a House-Senate conference committee.
Observers speculated that yesterday's vote may have been a "show" by House members to get themselves on record in advance of the election, leaving it to the conference committee to adopt the plan for once-a-year COLA raises later.
In a third key action affecting the budget resolution, House members also agreed to delay for one year an already passed bill to liberalize trade adjustment assistance benefits, rather than to rescind the measure permanently, as the budget-cutters had asked. The move came on a voice vote.
The move to retain the current twice-a-year COLAs of government retirees was led by Reps. Robert E. Bauman (R-Md.) and Joseph L. Fisher (D-Va.) over the objections of House Democratic leaders, who argued the cuts were needed to maintain budgetary integrity.
Rep. Leon Panetta (D-Calif.), speaking for the House Budget Committee, pointed out that other federal benefits and pension programs all are adjusted only once a year and contended the shift would place pensioners on an equal basis so the budget cuts would "be shared equally."
But Bauman retored that the cutback was "a false saving that will not occur" because federal pensioners already have received a cost-of-living increase scheduled for Sept. 1. Fisher said any saving would be "made up" immediately in later fiscal years.
The shift to an annual COLA would have been only for fiscal 1981, which begins Oct. 1, with the twice-a-year schedule resuming at the start of fiscal 1982. The change would have affected all federal civil service, postal, District government and military retirees.
All of Virginia's and Maryland's representatives voted to retain the twice-a-year adjustment except for Virginia Reps. M. Caldwell Butler and J. Kenneth Robinson, both Republicans, and Dan Daniel, a Democrat.
The overall money-saving package contains proposals for $5.5 billion in spending reductions and $3.9 billion in new taxes, mostly in the form of a speedup in tax payments for some corportations. Among the big cuts are in spending for child nutrition, farm loans and public works programs.
The Carter administration had supported the proposal to shift to annual increases in federal pension benefits, but did not lobby heavily for passage of the plan. Congressional sources said pressure from federal employe groups to reject the cutback proposal was heavy.