Potential Cost Is Main Barrier

Active employees became eligible for the premium conversion arrangement in 2000; however, retirees were excluded because of a provision in the tax code. The congressional tax committees have been reluctant to open that provision to change out of concern that private sector retirees would ask for the same break, at a potentially high cost in tax revenue. However, the large number of House backers for the bill to benefit federal retirees could at least compel those committees to seriously consider the idea. The first step might be to get a formal estimate of the cost from the Congressional Budget Office; so far, no such estimate has been produced, making it difficult for backers to argue that the benefit in parity between active and retired employees would be worth the expense.