REAGAN'S PROPOSED CUTS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP90-00965R000201070026-7
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 1
• Document Creation Date: December 22, 2016
• Document Release Date: January 19, 2012
• Sequence Number: 26
• Publication Date: January 16, 1985
• Content Type: OPEN SOURCE

Declassified and Approved For Release 2012/01/19: CIA-RDP90-00965R000201070026-7
r "7 ti 16 January
THE FEDERAL. DIARY
~eagan's Proposed Cuts
By Mike Causey
Washington Poet Staff Writer
ost, and maybe all, of
the civil service pay and
benefit changes
President Reagan will propose
in his upcoming budget have
leaked out and been reported.
The proposals include:
^ A 5 percent pay cut for
white-collar and blue-collar
federal workers next year.
^ Raising the federal
retirement age to 65.
^ Changing the formula Uncle
Sam uses to compute employes'
annuities.
^ Limiting cost-of-living
adjustments (COLAs) for
federal and military retirees.
Although none of the
recommendations will be official
until President Reagan submits
his budget to Congress,
administration aides say that is
more or less the package. So
where do we go after they have
been made official?
Many federal workers have
asked if they should retire now
to escape changes in the pension
system. The answer is no.
This is the situation:
Pay: No federal pay cut can
be made unless both the House
and the Senate approve it.
Many congressional Democrats
oppose the pay cut, and Sen.
William Roth (R-Del.), who
chairs the Senate Governmental
Affairs Committee, says he, too,
is against the pay cut,; That
doesn't mean Congress won't
approve it, but it means the
White House has a steep uphill
fight ahead.
Retirement Age: Congress
would have to approve any
change in the federal
retirement age. The president
cannot do it on his own. There
will be a tough fight on this one.
POST
1985
Feds can now retire without:
reduction in pension benefits at
age 55 with 30 years. The
president's plan would require
employes retiring in the future
to take a 5 percent reduction
for each year short of age 65.
Workers who are 55 at the time
of enactment would be
grandfathered in under the
present system.
If Congress decides tr go
along with raising the retirement
age, lawmakers are likely to seek
a compromise to make the age
either 60 or 62. The average
federal worker now retires at
about age 61, according to
government figures.
COLA Cutback: This is one of
the items the Reagan
administration is likely to get.
The president's proposal would
limit full COLAs to only the
first $10,000 of annuity.
Pension amounts over that
would get an increase of only
55 percent of the regular
COLA. Congress may also buy
the plan to base the retiree
raises on either the actual rise
in living costs, or the
percentage of each federal pay
raise, whichever is lower. This
is especially likely if Social
Security benefits are frozen.
Formula Change: Congress
may also approve the president's
plan to base annuities on the
employe's length of service and
his highest five-year salary
average. Currently, annuities are
computed by length of service
and the highest three-year salary
average. That change would have
a minimal impact on many federal
workers, but would save the
government a lot of money.
Remember, none of the
changes can be made without
congressional approval. And
none of them will happen
overnight. They must first be
introduced as legislation or
tacked onto an appropriation bill.
Hearings must be held, votes
taken and compromises made
before any of the changes can be
made-if any of them are made.
Any worker who wants to
bail out before a pay cut or
pension change goes into effect
will have plently of warning
before anything drastic
happens.
Declassified and Approved For Release 2012/01/19: CIA-RDP90-00965R000201070026-7