GRAND HAVEN, Mich.
Like many federal retirees, John W. Kibler and Ed Moore arebasically happy with the government retirement programs. But recentnews out of Washington makes them nervous.
The latest concern is the nation's rapidly increasing budgetdeficit. Yesterday, the Congressional Budget Office projected itwould reach a record $438 billion next year, up from the estimated$407 billion this year. Last year's $162 billion deficit seems likea pittance in comparison.
'This is a very big concern, of course, because they are going tohave to pay for it somewhere,' Kibler said by phone from Louisville,where the National Active and Retired Federal Employees Associationis meeting.
Kibler retired 14 years ago after more than three decades ofservice. He was a supervisory contract price analyst with theDefense Logistics Agency. Now he is president of the NARFE chapterin Grand Rapids and a vice president for the state federation.
The worry he and other retirees feel is based in history.
'During the budget crises of the 1980s and early 1990s, federalretirees and survivors lost $50 billion in deferred, reduced andcanceled cost-of-living adjustments while 40 million Social Securitybeneficiaries never missed a dime's worth of COLAs,' said DanielAdcock, NARFE's legislative director.
In 1994, 1995 and 1996, the cost-of-living adjustments weredelayed three months to save money.
'They always want to take it out on the back of the retirees andemployees,' complained Moore, who retired after almost 38 years as apostal clerk in Grand Rapids.
I met Moore and Kibler for breakfast last week just outside GrandHaven, a lovely beach town on Lake Michigan, an area included inMoore's territory as a NARFE state vice president.
Over eggs, toast, juice and coffee, they spoke well of severalgovernment retirement programs, but also of the need for somechanges. Three issues at the top of their agenda are allowingretirees to pay their portion of health insurance premiums with non-taxable income and changing two measures that are a particularproblem for retirees: the Government Pension Offset and the WindfallElimination Provision.
Current federal employees are allowed to pay their premiums withpretax dollars, and retirees want to do the same. That would savethem money, but Uncle Sam would have to make up the difference.
'CBO expects that such a benefit would generate a small increasein the number of new retirees who participate in the . . . programat retirement,' the budget office said in a report three years ago.'In addition, CBO anticipates that some retirees may switch fromtheir current health coverage to more-generous (and more-expensive)plans to take advantage of the increased buying power of theircontributions toward health insurance. Such changes would increasespending by the federal government for its share of retiree healthpremiums . . . by about $100 million over the 2006-2010 period, andby about $600 million over the 2006-2015 period.'
The Government Pension Offset and the Windfall EliminationProvision cut Social Security benefits to government retirees,including some who worked for state and local agencies. About aquarter of public employees are not covered by Social Security forvarious reasons and don't 'pay Social Security taxes on earningsfrom their noncovered jobs,' Barbara D. Bovbjerg, director ofeducation workforce and income security for the GovernmentAccountability Office, told Congress last year. These 'provisionshave been difficult to administer,' she said and 'are a source ofconfusion and frustration for public employees and retirees.'
She went on to cite critics who say 'the provisions are basicallyinaccurate and unfair.'
But correcting that would not be cheap.
Bovbjerg said 'repealing these provisions would be costly in anenvironment where the Social Security trust funds already face long-term solvency issues. According to current SSA [Social SecurityAdministration] estimates, eliminating the GPO entirely would cost$41.7 billion over 10 years and increase the long-range deficit byabout 3 percent. Similarly, SSA estimates that eliminating the WEPwould cost $40.1 billion, also increasing Social Security's long-range deficit by 3 percent.'
Today, delegates to the NARFE convention will consider arecommendation from their legislative committee calling for majorchanges in the provisions. 'The committee recommendation reaffirmsNARFE's commitment to preserving the earned economic and healthsecurity of federal annuitants and workers and support forlegislation which would allow federal civilian and military retireesto pay for their share of health insurance premiums with pre-tax andbills which would repeal or reform the unfair and arbitrary SocialSecurity Government Pension Offset and Windfall EliminationProvision,' Adcock said.
My guess is NARFE will pass this overwhelmingly. Getting a simplemajority in Congress to go along will be much harder.
Diary associate Eric Yoder contributed to this report. ContactJoe Davidson at federaldiary@washpost.com.
