Senate Set to Vote on Bill That Could Trigger Benefit-Cutting Drive

The Senate is scheduled to vote as early as this week on a budget “resolution” that is aimed primarily at tax policy but that could trigger a formal effort to reduce the value of retirement and health insurance benefits for federal employees and retirees.

The measure would authorize a process called reconciliation, in which congressional committees are ordered to find savings in areas under their control–and in this case to authorize cuts in tax rates such as the White House and Republican leaders in Congress have proposed, although not in detail. Those changes in turn would need only a simple majority vote in the Senate, rather than the normal 60-vote threshold that stalled several other administration initiatives this year due to Democratic opposition.

Passage by the Senate is not assured, due to disagreements among Republicans over larger budgetary goals including long-term deficit reduction.

While the Senate measure does not order savings from committees that oversee federal benefits, the version already passed by the House does–$32 billion over 10 years. The two chambers would then need to decide whether to accept one approach or the other or something in between; if the final version does order savings, it would be up to those committees to decide how to achieve them. But that almost certainly would involve targeting retirement–such as through higher required employee contributions–and/or the FEHB program–such as through shifting more of the total premium cost onto enrollees–since those are the two main budget items under their control.

Putting such proposals into law would require going through a separate procedure. Already it’s being questioned whether Congress would even take on such a difficult chore, especially since the main goal of the budget resolution is to improve the chances of passing tax policy changes. Any savings mandate could be simply set aside.