Several of the organizations that represent federal civilian and postal workers have begun a full-scale attack on the proposal to cover new federal workers under Social Security. In each instance, the presentation distorts the actual facts pertinent to the consideration of this proposal made by the National Commission on Social Security Reform.
The attack is being staged through a series of newspaper and radio advertisements. In addition, a set of statistical analyses that purport to show the cost of the proposal are being distributed around Capitol Hill. Finally, op-ed pieces by union leaders have appeared in the newspapers (for example, Kenneth Blaylock's piece in The Post on Jan. 27). These presentations make three basic points.
First, without new contributions the Civil Service Retirement System (CSRS) would go bankrupt, and taxpayers would have to shoulder the burden. The implication is that employee contributions ensure the solvency of the CSRS--dry up the contributions and benefits cannot be paid.
The fact is that if employee contributions were the only source of income to CSRS the fund would be depleted by 1987 or 1988 at the latest. Even if the system operated in the fashion that many federal workers believe (i.e., employee contributions plus a matching agency contribution plus trust fund interest) the fund would be depleted sometime between 1993 and 1995. The fact of the matter is that the current CSRS is primarily dependent on taxpayer support on whatever basis the cost of the system is considered.
There are those who argue that taxpayer support is now required because of past imprudence: massive liabilities (i.e., benefit promises) were accumulated but never funded. The National Federation of Federal Employees argues that "the unfunded deficit originated because the federal government failed to pay its share into the fund from 1920 to 1956." This perception ignores the recent unprecedented growth of these unfunded obligations.
Of the roughly $500 billion in unfunded benefit promises on the CSRS books at the end of fiscal 1981, nearly one-quarter (23.8 percent) arose during 1980 and 1981. Not only is the current CSRS largely dependent on taxpayer support to meet current benefit payments; it continues to accumulate added liabilities for future generations of taxpayers as well.
The second point opponents of expanded Social Security coverage argue is that covering new federal workers will mean higher future budget costs for federal retirement. The annual budget cost of federal retirement equals the total benefits paid minus employee contributions. The Senate Governmental Affairs Committee recently released an analysis that shows that covering new federal workers under Social Security and providing them with supplemental pension protection could actually reduce the budgetary burden of federal retirement.
The savings of such a program depend on the level of benefits provided by the combined elements of the system and the level of total contributions required of those who would participate in it. It is unlikely that the relative level of retirement benefits going to future federal workers will be any higher than now. Further, it can be easily demonstrated that the future net contributions of federal workers to Social Security would be roughly equivalent to their current contributions to CSRS.
The third point opponents of Social Security coverage of federal workers argue is that such a policy would ultimately raise Social Security costs. There has never been a set of cost estimates by any of the responsible parties that shows the net cost of Social Security rising as a result of covering federal workers. Wishing that the numbers showed such a cost increase, or merely saying it, does not make it so. In actuality, the estimates by the Social Security actuaries have consistently shown significant short-and long-term savings for other payroll taxpayers if federal workers are covered under Social Security.
Federal workers have borne the brunt of some reprehensible political rhetoric in recent years. They now feel they are being singled out to bear an unjust share of a budget-balancing exercise.
One of the reasons they are being singled out on the pension side is that they stand alone in many regards. They do not participate in Social Security, although three- fourths ultimately get benefits. They receive better cost-of-living allowances than most retirees. Finally, they are perceived to retire earlier than most workers. Whether it is right or wrong, there is a broad perception that CSRS provides much more generous protection to federal workers than is available to taxpayers who bear most of the CSRS cost.
This perception has led to proposals in the 1984 budget that would raise the CSRS contribution from 7 percent to 11 percent of salary by 1985, an increase of 57 percent. Workers reaching retirement eligibility at age 55 after 1984 would only get half the benefits now provided by CSRS and would have to work until age 65 to get full benefits. By comparison, the national commission recommendations on raising Social Security taxes would only increase program revenues by about 4 percent between 1983 and 1989. Their recommendations for delaying the 1983 COLA and taxing benefits amounts to about 4 percent of projected cash benefits over the period.
If federal workers were participating in Social Security, they would be subject to the same changes that were being discussed for the rest of society for their basic retirement program costs and benefits. If they had a supplemental retirement program that compared with those provided by other large employers, they could get much greater public sympathy and support against arbitrary changes in their own retirement programs.
Even with carefully worded statements and supporting analyses, federal workers and retirees have a difficult case to make to the general public. Attempting to confuse the Social Security policy discussion or to destroy the compromise package through partial or misleading analyses of federal pension costs will not help their cause, their credibility, or their standing with the public.