Important Retiree Legislation Mired in Congress

(This article appeared in the March/April 2004 issue of The American Postal Worker magazine)

John R. Smith, Director

Active federal employees enrolled in the Federal Employee Health Benefit Program (FEHB) have been able to use pre-tax dollars to pay their health insurance premiums since 2000, when Congress amended federal tax rules to give government workers the same tax benefit that private-sector workers have had for years. Meanwhile, many retirees who live on fixed incomes simply cannot afford the rising cost of health insurance premiums. If Congress corrected this inequity, the average retiree would save about $435 annually.

Although Davis' bill is co-sponsored by three out of four House members and has been cleared by the Government Reform Committee (which he chairs), the Armed Services and the Ways and Means committees must approve the bill before it can be brought to a vote by the full House of Representatives. For a variety of reasons - many of them purely political - those committees have yet to take action.

In the Senate, a similar "Premium Conversion" bill (S. 623) introduced by Sen. John Warner (R-VA) has attracted 52 co-sponsors, but remains stuck in the Senate Finance Committee, with no action in sight.

Government Pension Offset

Postal and federal retirees are also waiting for Congress to correct two other serious inequities affecting retirement income. These are the so-called Windfall Elimination and Government Pension Offset provisions of current Social Security rules.

Congress created the Windfall Elimination provision in 1983 by revising the formula used for calculating Social Security benefits for retirees who qualify for a Civil Service Retirement System (CSRS) annuity. The new formula lowers Social Security benefits for CSRS annuitants.

As a consequence, CSRS annuitants who have retired since 1984, become eligible for Social Security benefits at age 62, and have fewer than 30 years of service, do not receive payments reflective of the amount they paid into Social Security.

The Government Pension Offset provision prevents postal and federal retirees from collecting the full amount of their Social Security benefits if they are receiving a CSRS survivor annuity. The 1977 law that created the pension offset provision requires that a survivor's Social Security benefit is reduced by two-thirds if he or she is also receiving a CSRS survivor annuity.

In February 2003, Rep. Buck McKeon (R-CA) introduced the Social Security Fairness Act (H.R. 594) to repeal both the Windfall Elimination and Government Pension Offset provisions. Unfortunately, the House Ways and Means Committee has taken no action, even though the bill is co-sponsored by a majority of House members.

Similarly, an identical bill (S. 349) introduced by Sen. Diane Feinstein (D-CA) awaits action by the Senate Finance Committee.

Your Action Needed

APWU supports each of these bills and encourages retirees to write to their U.S. senators and representatives to urge Congress to act swiftly. Address your letters to: The Honorable (full name), U.S. Senate, Washington, DC 20510 or U.S. House of Representatives, Washington, DC 20515.

"Dear Senator (name)" or "Dear Representative (name)" is the appropriate salutation. Refer to the bill numbers given above, and don't forget to say thanks if your senator or congressperson is among the bills' sponsors.