Bush budget affects retireesPresident Bush's 1993 budget...

Newswatch . . . on federal workers

February 12, 1992|By Carol Emert | Carol Emert,States News Service

Bush budget affects retirees

President Bush's 1993 budget stops short of proposing cuts in the non-defense federal work force, but government employees and retirees would feel the budget pinch in a number of ways if aspects of the plan find their way into law.

Under the president's proposal, federal retirees who lose their jobs due to terminal illness or downsizing no longer would be able to recover their pension contribution all at once.

The lump-sum option allows federal retirees in those two categories to receive a check for the money they contributed to the pension plan during their years of employment. People choosing that option continue to receive monthly pension checks, but their checks are reduced by about 10 percent.

The lump-sum amount on average is equivalent to 18 months opension payments. The option was suspended in November 1990 for all federal employees except those who retired due to a terminal illness or a reduction in force.

The option was due to be eliminated for all retirees by 1995, but the president's proposal would move the date up to 1993.

As now, people who lose their federal jobs due to downsizinand who are not of retirement age still would be eligible to withdraw their pension contribution as a lump sum. Or, if they are members of the Civil Service Retirement System (CSRS), they may apply for a deferred annuity to begin when they turn 62. Employees under the Federal Employees Retirement System FERS) can defer the annuity payments until age 55, if they have 10 or more years of government service, or until age 62, if they have worked for the government for at least five years.

Federal retirees covered by Medicare would be required to pay part of the cost of their prescription medicine under the budget proposal.

The plan would require Medicare retirees to help pay for 20 percent to 25 percent of drugs purchased from a pharmacy. Those not covered by Medicare -- about 200,000 of the approximately 2 million federal retirees -- already pay part of the cost of their medicines.

People covered by Medicare now receive prescription drugs free. Under this system, people are not motivated to cut costs, said Curt Smith of the Office of Personnel Management.

If people are forced to pay a portion of the bill, they will be more likely to seek generic substitutes instead of expensive, brand-name drugs, Mr. Smith said. They also will be more careful to purchase only drugs that they really need, he said.

Retirees are encouraged to shop for medication by mail. Under the proposal, retirees would pay about $10 for a 90-day supply bought by mail order.

Doctor fees and Medicare

Another proposal in the president's budget would require physicians to charge the lower Medicare rates to federal retirees over 65 not covered by the health program.

Patients would be encouraged to seek less expensive doctors. The small percentage of federal retirees who do not pay a portion of their doctor bills would be required to pay any physicians' fees that exceeded the amount paid by Medicare.

Regulation for judges

The Senate Judiciary Committee last week approved a bill to establish an independent pool of administrative law judges to preside over in-house appeals at federal agencies. A companion bill has been introduced in the House.

The judges are employed by individual agencies, and this relationship makes them vulnerable to coercion by agency officials, a committee aide said.

"Administrative law judges are called on to be independent actors who are not beholden to either their agencies or other parties," said Sen. Howell Heflin, D-Ala., the bill's sponsor. "However, judges continue to be paid, housed and staffed by the agencies for whom they resolve cases."

Cases have been reported in which agency officials manipulated parking privileges and support-staff allotments if they were unhappy with a judge's decision, the aide said.

A total of 852 judges, about half of those in the nation, are employed by the Social Security Administration in its Office of Hearings and Appeals.

A primary task of judges at SSA is to adjudicate appeals by claimants dissatisfied with their compensation. The judges also might help an agency choose between subcontracting firms, or develop rules for settling disputes, the committee aide said.

Under the bill, the judges would not work for individual agencies but would be drawn from an independent pool on a case-by-case basis. The bill also would prohibit the firing of a judge unless a specific cause, such as misconduct, were proven.

A similar measure was approved by the Judiciary Committee at the end of 1990, but died when Congress recessed. Even if the measure is passes, the committee aide said, an official in the Department of Justice has said he will recommend that President Bush veto it.

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