The budget proposal once again made only limited proposals in the areas of federal pay and benefits, some of which have been offered for a number of years running. These include: abolishing the special cost of living allowances paid in non-foreign areas outside the contiguous 48 states and replacing them with locality pay, a change that administration officials say would work to the benefit of most employees long-run because locality pay counts toward retirement but the geographic COLAs do not; allowing Blue Cross-Blue Shield to offer a third FEHB option, which presumably would be a high deductible plan with a health savings account component; and tightening administration of the FECA workplace injury compensation program, including converting beneficiaries to regular disability retirement when they reach eligibility age under that program.
