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Key developments in the world of federal employee benefits: health, pay, and much more.

Playing Defense

Most of the federal pay and benefits discussions during the past year have focused on the civilian workforce. But lawmakers also are giving serious consideration to reforming the military's compensation system -- a topic the armed services tread upon very carefully.

The subject cropped up again Wednesday during a House Armed Services Committee hearing on how automatic across-the-board spending cuts would affect the Defense Department if the super committee failed to come up with a deficit reduction plan. All four witnesses -- one from each of the service branches -- sounded the same cautionary note in answering a question from Rep. Susan Davis, D-Calif., about the status of military personnel reform and what it should look like. "We can't just look at one piece of the compensation package," said Gen. Norton Schwartz, Air Force chief of staff. Schwartz said any changes to military pay and benefits have to be done comprehensively as opposed to "drip by drip." Army Chief of Staff Gen. Raymond Odierno agreed that any reform process had to be measured. "It can't be rushed into; it needs to be studied. We're taking a very quick, thin look at it right now. It's something that's got to be much deeper," he said.

The Defense Department is reviewing the military compensation system, including pay and retirement benefits for service members. This summer the Defense Business Board, an advisory panel of private sector leaders, recommended the department phase out its 20-year cliff vesting retirement system and replace it with one that provides some benefits to all service members regardless of their tenure. That group also proposed a mandatory Thrift Savings Plan program for military personnel that would vest after three to five years and also include annual contributions from the government.

Any changes to the military compensation package should happen only after careful consideration and with deference to the sacrifice of service members and their families. If recent congressional hearings are any indication, major reform is unlikely to come anytime soon, given the Pentagon's desire not to "break faith" with service members and the political risks involved in alienating the military community.

Layoffs in the Offing?

Adm. Jonathan Greenert, chief of naval operations, mentioned the possibility of civilian personnel layoffs in the face of further Defense budget cuts more than once during Wednesday's hearing. The remarks were made in passing but still, they stood out. "Some of the actions we would need to take under sequestration could have a severe and irreversible impact on the Navy's future," Greenert said during his opening statement. "For instance, we may need to end procurement programs and begin laying off civilian personnel in fiscal 2012 to ensure we are within control levels for January 2013." He also mentioned the possibility of layoffs at least two other times during the question-and-answer period with lawmakers.

COLA Boost for Disabled Vets

Disabled veterans will receive a 3.6 percent cost-of-living adjustment, effective Dec. 1 with payouts starting in early January 2012. The House on Wednesday passed the Senate's version of the COLA legislation. The bill now heads to President Obama, who is expected to sign it.

The measure increases the rates of disability compensation for vets with service-connected disabilities as well as rates for dependency and indemnity compensation for surviving spouses and children. It's the first COLA increase in two years.

Federal retirees and Social Security recipients automatically receive cost-of-living adjustments tied to the Consumer Price Index, but Congress must introduce specific COLA legislation for disabled vets.

Mass Transit Appeal

Feds (and everyone else) will receive less money in transit subsidies in 2012 if Congress doesn't approve an extension for the current benefit by the end of this year.

The National Treasury Employees Union is urging lawmakers to support the Commuter Benefits Equity Act (H.R. 2412 and S. 1034), which establishes permanent parity between the current parking tax benefit and the mass transit benefit. Currently, both benefits amount to $230 per month, but after Dec. 31, the mass transit benefit reverts to $120 per month. Congress boosted the transit benefit in previous legislation and in 2010 extended it through 2011.

"It certainly makes no sense for the government to provide workers using environmentally helpful mass transit a lesser benefit than those driving and parking personal vehicles," NTEU President Colleen Kelley said.


Kellie Lunney covers federal pay and benefits issues, the budget process and financial management. After starting her career in journalism at Government Executive in 2000, she returned in 2008 after four years at sister publication National Journal writing profiles of influential Washingtonians. In 2006, she received a fellowship at the Ohio State University through the Kiplinger Public Affairs in Journalism program, where she worked on a project that looked at rebuilding affordable housing in Mississippi after Hurricane Katrina. She has appeared on C-SPAN’s Washington Journal, NPR and Feature Story News, where she participated in a weekly radio roundtable on the 2008 presidential campaign. In the late 1990s, she worked at the Housing and Urban Development Department as a career employee. She is a graduate of Colgate University.

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