3 Year Pay Freeze is the Good News?

Thursday - 4/21/2011, 4:00am EDT

How serious is the plan to limit cost of living adjustments to retirees who are 62 and older?

Short answer: Very.

What is the probability that the current 2-year freeze on federal pay raises will be extended another year?

Short answer: High.

Why is it that members of Congress, who are themselves on the public payroll, are suddenly out to get federal workers?

Somewhat Short Answer: The good news is that not ALL members of Congress seem to equate federal workers with overweight skunks.

The bad news is that some of those of the feds-are-overpaid-skunks school of thought are in positions of power, especially in the House which includes a large freshmen class whose makeup seems to range from brilliant and patriotic to hypocritical, angry and downright na´ve. And they've arrived on the scene at a time of high unemployment, economic distress, major overseas problems and extreme partisanship on both sides of the political spectrum.

Some experts (to the extent that anybody covering the federal beat is an expert) say the issue isn't a 3-year federal pay freeze. Given the way things are going, they say it is possible that Congress will delay (and the White House go along with) putting off the next white collar federal pay hike for 5-years. Postal workers will not be involved in this, but even as they are getting very modest adjustments the number of postal jobs will be trimmed dramatically.

Congress is expected to give serious consideration to requiring federal workers under both the CSRS and FERS retirement programs to contribute more to their own retirement plans, as well as cutting the federal workforce by 10 percent (between 180,000 and 200,000 nonpostal jobs) over the next three years.

After appointing a bipartisan deficit reduction commission, President Obama was accused, mostly by liberals in his own political party, of "walking away" from some of its draconian recommendations to cut federal expenditures. The lame duck Congress failed to approve any of the tough budget cuts proposed by the BRAC-like commission, and pushed them into the lap of the new Congress which took office in January.

Now, with the strong support of the President, the Congress will consider some of the proposed cuts including those in politically-sensitive programs like Medicare and Medicaid.

Retiree Raise

There is one bright spot on the horizon for federal-postal-military retirees. But even that has a downside. After two years without a cost of living adjustment, the retirees are in line for an inflation-catch up in January, 2012. Given the rise in the consumer price index, that increase as of now looks like about 2.1 percent. But that isn't entirely good news.

Barry Rock, president of the New York State Federation of Chapters of the National Active and Retired Federal Employees Association notes:

    "One added point to your COLA article. During the past two years federal retirees did not have to pay the increases in their Medicare Part B premiums. As you know the law allows for no greater Part B premium increase than the increase in the COLA. About 75% of federal retirees therefore continued to pay $96.40 per month during the past two years. If the CPI reflects an increase in the COLA much if not all of it will go towards the new 2012 Part B Premium which could top out at about $120 per month. For all practical purposes going from $96.40 to $120 will mean most federal retirees will not see any COLA for 2012."

To reach me: mcausey@federalnewsradio.com


Nearly Useless Factoid
by Suzanne Kubota

You know that cardboard sleeve that comes wrapped around your molten latte? There's a word for that. According to MentalFloss, it's called a "zarf."


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