Senate Panel Targets Benefits

The Senate Governmental Affairs Committee approved Tuesday a $5.47 billion savings package that brings spending for federal employees in line with the five-year balanced budget plan negotiated last month by the White House and congressional leaders, LEGI-SLATE News Service reported.

The $5.47 billion figure represents how much less the government is projected to spend between fiscal year 1998 and fiscal 2002 than if Congress retained expenditures at current levels.

That savings actually exceeds the target for governmental affairs in the budget agreement, Chairman Thompson said at the panel's morning markup. For its part, the counterpart House Government Reform Committee approved $4.76 in savings last week.

While most of the Senate's savings will come from changes in government-run pension funds, Thompson said, the panel expects to raise an additional $540 million by selling federal assets in New York City and Washington.

The government will save about $28 million over four years from a change in the formula for calculating federal employees' paycheck deductions for their health plans. The formula change also prevents federal employees from having to pay at least $200 more per year toward their health care. Health plan deductions would have risen if the committee had not included a provision to change the formula.

Thompson said that the savings "spread the burden of the changes in as fair a manner as possible," noting that the committee resisted a request in the president's budget to save a further $1.7 billion by delaying cost-of-living adjustments to federal civilian retirees until fiscal 2002.

The text passed by the committee would slightly increase the amount that employees pay from their checks to cover their future retirement benefits.

In addition, the measure recommends the sale of Governor's Island, a former Coast Guard base in New York City's harbor, and 16.3 acres of air space to the north of Washington, D.C.'s Union Station.

The sale of those assets is expected to raise $500 million and $40 million respectively.