Benefits Bills

By Brittany R. Ballenstedt August 23, 2007

There's little action right now in the area of potential legislative changes to federal pay and benefits, since Congress has adjourned for its August recess. But it can't hurt to check in on some pending legislation that could affect your checkbook if it advances when lawmakers return.

H.R. 1110 This bill, introduced in February by Rep. Tom Davis, R-Va., would allow retired military and civilian federal workers to pay their monthly health care premiums with pre-tax dollars. Passage of the legislation would result in average savings of $820 per year for federal annuitants, according to government estimates. The legislation, originally introduced in the 106th session, now has 240 co-sponsors but still sits in the House Oversight and Government Reform Subcommittee on the Federal Workforce. David Marin, Republican staff director for the full committee, says the bill ought to be poised for action when Congress returns. "If the majority rules around this place, this bill should move as quickly as any other," he said. "Clearly, there's massive support for it."

H.R. 1256 This legislation, introduced in February by House Majority Leader Steny Hoyer, D-Md., would raise the government contribution to federal employee health care premiums from 72 percent to 80 percent. Office of Personnel Management Director Linda Springer told Congress earlier this month that bumping up the government's contribution is unnecessary, largely because the plan already is competitive with health insurance programs in the private sector. Hoyer's bill, which also was introduced last session of Congress, still sits in committee.

S. 1047 This bill, sponsored by Sen. George Voinovich, R-Ohio, would allow student loan repayment programs to be offered to federal employees on a tax-free basis. Under current law, federal agencies pay student loans up to $10,000 per year with a cumulative cap of $60,000, but the incentive is taxed. Davis is a co-sponsor of the House version. Marin said the bill should easily pass at the committee level, though its prospects beyond that are unclear.

H.R. 1974 and S. 1166 These companion bills, sponsored by Virginia Republicans Rep. Frank Wolf and Sen. John Warner, would provide federal civilian employees serving in combat zones with the same tax credit that is available to military members. While troops and federal contractors serving in combat zones are eligible for an income tax exemption on their base pay, civilian federal employees are only eligible for "hardship pay," which can be up to 25 percent of their salary. The bills sit in the House Ways and Means and Senate Finance committees.

S. 1254 Sen. Barbara Mikulski, D-Md., introduced this legislation in May to help ease the burden of a 1977 law that prevents certain retirees from collecting both a government annuity and spousal Social Security benefits. Mikulski's legislation would do away with the two-thirds offset unless the combined amount of the pension plus the Social Security spousal benefit exceeds $1,200 per month. Two bills with similar goals also have been introduced this session; H.R. 82 and S. 206 seek a full repeal of the pension offset and the Windfall Elimination Provision, under which Social Security benefits are reduced for retirees who spent much of their careers working for organizations that do not withhold Social Security taxes. All bills are currently in committee, and it's worth noting that similar legislation has been introduced several times in previous years without success.

Pay Disparity

Two House members said earlier this month that federal employees in their districts are treated unfairly when it comes to pay.

Rep. Patrick Kennedy, D-R.I., told Congress that blue-collar federal workers in Rhode Island should be paid on a similar scale as their Boston counterparts. Wage rates in the Boston area can be up to 33 percent higher, creating a disparity between Rhode Island wage grade workers, who earn an average of $18.01 per hour, and Boston wage grade employees, who earn an average of $20.25 per hour, Kennedy testified.

While Kennedy believes OPM should solve the problem, he and Rep. Barney Frank, D-Mass., have introduced legislation (H.R. 2375) to correct the disparity.

Meanwhile, Del. Eni Faleomavaega, D-American Samoa, notes that federal employees in his district do not receive the cost-of-living allowance that OPM provides to other non-foreign areas, such as the U.S. Virgin Islands.

Faleomavaega said OPM has not extended the COLA benefit to American Samoa employees, largely because the personnel agency has not conducted a price comparison survey in the area. "Since American Samoa clearly falls within OPM's definition of 'non-foreign area,' it seems unreasonable that OPM asserts that the cost of living in American Samoa is not high enough to justify payment of COLA when no survey has ever been conducted," he said.

While Faleomavaega also said he believes the solution lies with OPM, he has introduced legislation (H.R. 1786) to grant American Samoa federal workers the increase.