Paying the Price

Federal employees, retirees, and agencies will be asked to make pay and benefit sacrifices to help achieve a balanced budget under Clinton Administration plans released yesterday. Employee and retiree groups expressed disappointment with the administration's proposals.

The budget includes a 2.8 percent pay raise for civil servants in fiscal 1998. Last year, the Federal Salary Council recommended a 14.3 percent across-the-board pay raise based on estimates of the gap between federal and non-federal pay computed by the Bureau of Labor Statistics.

The administration "continues to have concerns about the statistical determinations" BLS uses, Office of Personnel Management communications director Rosalie Cameron said. The president's budget notes that federal employee unions will be consulted before a determination is made on how to divide the pay boost between base pay raises and locality pay increases.

National Treasury Employees Union President Robert Tobias said he was disappointed with Clinton's pay proposal.

"The administration acknowledges it is asking federal employees to do more with less," Tobias said. "The men and women of the federal workforce are responding admirably. Their efforts should be better recognized with adequate pay."

The President's budget also includes proposals to alter the timing of cost of living adjustments (COLAs) for retirees and increase agency and employee contributions to the Civil Service Retirement System and Federal Employees Retirement System funds. These moves, the administration says, will save the government $6.2 billion through fiscal 2002.

Moving the annual COLA for retirees from January to April would save the government $1.4 billion over the next five years. OPM said the typical retiree would lose $146 a year because of the delay.

National Association of Retired Federal Employees President Charles Jackson denounced the COLA delay as a "public dismissal of the value of government service" and vowed to convince Congress that "in this regard, the President is just plain wrong." On Tuesday, Rep. Connie Morella, R-Md., and 10 other representatives introduced a sense-of-Congress resolution recommending that January 1 should remain the effective date for annual COLAs. The House hasn't voted on the resolution yet.

"The administration is going to face a battle royal with the local delegations," Rep. Thomas M. Davis, R-Va., told The Washington Post today. "We're going to fight like the devil on this one."

Current employees will have to contribute an additional 0.5 percent of their base salaries to their retirement funds by 2002. Employee contributions will increase 0.25 percent on January 1, 1999, another 0.15 percent in 2000, and a final 0.10 percent in 2001. The higher rates would remain in effect through December 31, 2002.

For employees enrolled in CSRS, their contributions will rise from 7 percent of base salary to 7.5 percent. FERS enrollees will see their contributions go up to 1.3 percent of base pay from 0.8 percent. The increased employee contributions will save the federal government $1.8 billion through 2002, and will cost the typical employee about $100 in 1999 and $200 a year thereafter.

Under the administration's plan, agencies will be required to increase their contributions to the CSRS fund from 7 percent percent of an employee's base salary to 8.51 percent, saving the government just under $3 billion by 2002. There will be no increase in agency contributions for FERS enrollees. Agencies already contribute 11.4 percent of base pay into FERS.

Cameron characterized the budget as asking for a modest contribution from federal employees and retirees.

"It has federal employees making the same sacrifice that many groups will have to make in order to arrive at a balanced budget," Cameron said. "We all understand there is a limited amount of discretionary spending."

American Federation of Government Employees President John Sturdivant, though, argued that government workers are being asked to bear more than their fair share of the cuts.

"We find it unfortunate that this administration is retreating on its rhetoric about the value of federal employees while still fatuously asking us to do more with less," Sturdivant said. "The old maxim still holds true--you get what you pay for."

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