The Washington Post reports this morning that the spending bill just passed by Congress and signed by President Clinton includes an agreement to offer a second round of $25,000 buyouts to federal employees. The provision will allow agencies to offer the payments to employees who agree to resign or retire before December 31, 1997. The bill also adds two new funds to the Thrift Savings Plan (TSP).
The inclusion of the buyout provision came as a surprise, because Republican leaders have recently voiced opposition to extending buyouts. They contend that in the first round of buyouts, which ended last year, more than half of the payments went to people who were eligible for retirement anyway. Republicans have favored offering buyouts only on an agency-by-agency basis. But White House officials, led by Chief of Staff Leon Panetta, pushed for a new round of governmentwide buyouts in recent negotiations on fiscal 1997 appropriations measures. The White House wanted buyouts offered for a four-year period, but settled for a 15-month window .
A series of agencies, including the Agriculture and Transportation Departments, NASA, the IRS and the U.S. Customs Service were already authorized to offer buyouts next year. The Defense Department has authority to offer buyouts until 1999.
The two new Thrift Savings Plan funds, a small capitalization stock index fund and an international stock index investment fund, are expected to be available in two to three years.
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