Including new federal employes in the Social Security System will not bankrupt the Civil Service retirement fund or cause automatic slashes in federal retirement benefits, Social Security Commission Executive Director Robert J. Myers told the House Ways and Means Committee yesterday.
Earlier, House Majority Leader James C. Wright Jr. (D-Tex.) endorsed the bipartisan Social Security rescue plan forged by the commission Jan. 15. Support also came from several commission members, including Sens. Robert J. Dole (R-Kan.), John Heinz (R-Pa.) and Daniel Patrick Moynihan (D-N.Y.), House Rules Committee Chairman Claude Pepper (D-Fla.) and former representative Martha Keys (D-Kan.).
They urged Congress not to alter the plan in any major way, for fear it would fall apart.
AFL-CIO President Lane Kirkland, who also was on the commission, supported the package except inclusion of new federal employes. He said he would consider the latter if current employes were guaranteed against loss of benefits and new federal employes were guaranteed the right to have not merely Social Security but a supplementary federal pension which, combined, would be equal to the current level.
Wright indicated that this is exactly what congressional leaders intend to assure.
The hearing focused largely on two problems: how to solve the long-range deficit, only two-thirds of which would be erased by the commission's recommendations, and how to reduce federal employe opposition to the plan to extend mandatory Social Security coverage to them.
Democrats favor a tax increase to cover the other third of the long-range deficit, but Dole, Heinz and many other Republicans say they favor eventually raising the retirement age to 66.
Pepper called this a benefit cut and said, "If we put one item in there cutting Social Security benefits, I cannot support this bill." He refused to budge when Rep. J.J. (Jake) Pickle (D-Tex.) called him "intractable."
Myers said the Civil Service fund is only a payment funnel, not a true trust fund, and gets about 80 percent of its money from Treasury general revenues in the form of, special payments, contributions from federal agencies and interest on unfunded liabilities. Employe contributions, 7 percent of their salaries, cover about one-fifth of system costs.
Moreover, the trust fund gets more money from general revenues and agency contributions than is needed to pay benefits, and could meet obligations even if employe contributions began drying up. President Reagan's budget estimates benefits in fiscal 1982 at $19.5 billion, Treasury and agency contributions at about $27 billion and employe contributions at about $4.1 billion.