Zombie government

Wednesday - 5/2/2012, 2:00am EDT

Suppose you were a politician who thinks the government costs way too much, wastes lots of money and that federal workers are pampered and overpaid? And suppose there was this button, that if pushed, would reduce benefits for people retiring next year. Maybe causing thousands of retirement-age feds to flee in panic. Would you push that button?

In a heartbeat. Save all that money and clear out all that high- paid deadwood. It's a no-brainer.

Unless...

You in five years?

Instead of causing a tidal wave of retirement, what if pushing that button — changing the retirement formula — instead caused tens of thousands of workers to hang on. And on. And on. To maybe delay their planned retirement date by two, three or even five years. To stay on the payroll — especially when the private-sector job market is terrible — in order to make up what they would lose in pension payments if their annuities were based on the employees highest five-year average salary. Under current rules, benefits are based on the high-three formula.

Would that create a government staffed with over-the-hill zombies? What a horrible thought — sounds like Congress today!

White-collar federal pay has been frozen for two years. And Congress and the White House may decide to continue the freeze. The freeze, obviously, has an impact on the high-three (or high-five). But in each of the two years (2011 and 2012) of the pay freeze, about one-third of all government workers have gotten some sort of raise. Either as a result of a promotion, or because they came due for WIG (within-grade raise) based on time in grade and satisfactory service. Those semi-automatic raises are worth 3 percent.

Since Congress started its latest quest for ways to cut government operating costs, we've heard from hundreds of feds. Many have focused on the high-three to high-five proposal, even though benefits experts say it is one of the least painful options Congress and the White House have considered. They say that proposals to make feds pay an increasingly larger share of their health premiums or a plan to devalue future COLAs for retirees, would hit workers and retirees harder. Even so, many people say losing the high-three would be the trigger to get them to retire before it took effect.

After yesterday's column on the coming retirement tsunami, we got back- to-back emails on the subject. They seem to reflect the split personality feds have when it comes to the touchy subject of losing the high-three.

For instance:

Bill from the Government Printing Office said: "There are a large group of eligible retirees here, just waiting for the high-five requirement to become a reality. The minute that occurs, you better not be standing in a doorway. The general consensus is, 'It will take me two years to get back to where I stand right now and I am not going to wait around for that. I am gone!'"

On the other hand, Nora from the IRS, says: "If Congress wants to impose a new high-five formula on us, I say bring it on. I like my job. I like the people I work with. And I can use the money. If they — the 'they' being Congress — want to cut my benefits, I'll keep working as long as it takes to cut my losses. It would be funny, amusing, if they did this hoping it would cause a stampede only to find out it had the opposite effect and kept people on the job that much longer."

Your Turn

Today's Your Turn radio show will cover the waterfront. Federal News Radio's Julia Ziegler and Jolie Lee will talk about the (maybe) coming retirement tidal wave and the low standing of feds in the most recent poll. Sean Reilly from the Federal Times will cover pending postal legislation, the budget process to date and the recent government leadership survey.


NEARLY USELESS FACTOID

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