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By: FEDweek StaffThe CBO has issued the latest of its occasional reports describing potential government savings and revenue increases, once again mentioning long-running options involving federal pay and benefits.
While the CBO does not recommend the options it describes, its report commonly is cited by members of Congress who favor such changes, and under the congressional budget rules, they “score” as actual savings.
Among the options are:
* Changing the employer contribution toward FEHB premiums from a percentage formula to a voucher system, in which enrollees would receive a flat payment amount, which would be increased annually by standard inflation, not the usually higher inflation for health care. Over time this would shift more of the cost onto enrollees on average, CBO said. However, the payment might cover the entire premium for lower-cost plans, meaning those enrolled in them would not have to pay any premiums.
* Increase the required employee contribution toward FERS benefits for all FERS employees to the 4.4 percent of salary now being paid only by those hired in 2014 and later. For most FERS employees, hired before 2013, the current rate is 0.8 percent; for those hired in 2013 it is 3.6 percent (FERS employees also pay 6.2 percent of salary toward Social Security, up to an annual cap). This proposal differs from prior reports that included a potential increase for all FERS employees until the government and employee shares would be equal, at around 7 percent of salary.
Other options in the report, many of them long in circulation include: base annuities of those retiring after a future point on the highest five consecutive salary years rather than the current three; eliminate for future FERS retirees the “special retirement supplement” paid to most who retire before age 62; shave a half-percentage point off future pay increases; reduce the federal workforce by 10 percent by replacing only two of every three who leave; base retiree COLAs on the “chained” consumer price index, which on average would yield COLAs about a quarter of a percentage point less than the current index; and numerous potential changes to Social Security, including raising the salary tax and raising the age for standard benefits to 70.
