Retirees under 62 to get smaller COLAs in plan

April 01, 1993|By Carol Emert | Carol Emert,States News Service

WASHINGTON -- Cost-of-living adjustments for federal retirees 62 and older were left untouched in the budget resolution compromise worked out between the House and Senate, but pensioners under 62 will receive only half their regular COLAs.

Under the compromise, federal retirees under 62 will permanently lose half of their yearly COLAs, and the adjustments will be capped at $400 annually. An exception was made for workers, such as law enforcement officers and firefighters, who are required to retire at 55.

A retiree's full COLA would be restored when he or she reached 62, according to information from the Federal Government Service Task Force. The policy is expected to save $2.7 billion over five years beginning in fiscal year 1994, the task force said.

Members of the task force, including Maryland Democratic Sens. Paul S. Sarbanes and Barbara A. Mikulski and Rep. Steny H. Hoyer, D-5th, and Rep. Constance A. Morella, R-8th, sent a letter earlier this week to House Budget Committee Chairman Martin Olav Sabo, D-Minn., asking him to defer to the Senate on the question of COLAs for the nation's 3.5 million civilian and military retirees, 152,700 of whom are Maryland residents.

The Senate budget resolution called for no COLA cuts, while the original House version sought a cap of $400 on retirees 62 and over in fiscal year 1994 and a lower rate of increase from fiscal year 1995 to fiscal year 1999. The House version also included the half-COLA for younger retirees.

Mr. Sarbanes, who sits on the Senate Budget Committee, tried to preserve full COLAs by working with Committee Chairman Jim Sasser, D-Tenn. Mr. Sarbanes said in a statement he was "disappointed" in the compromise, but he described it overall as RTC "a positive result, especially in light of the serious fiscal constraints which confront us."

Meanwhile, Ms. Mikulski scolded Office of Management and Budget Director Leon E. Panetta for buckling under to Western opposition to grazing and mining fees while pushing for a freeze on federal pay and the cuts in pension benefits.

The Clinton administration reversed its position on federal land fees earlier this week.

"It is outrageous that mining on federal land should cost no more than it did in 1872, while [federal employees] who make between $14,600 and $21,300 per year have no protection from inflation," she said in a letter to Mr. Panetta.

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