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U.S. Retirees Might Lose Money with COLA Raises

The Washington Post
WASHINGTON

Government retirees would lose millions of dollars in cost-of-living adjustment raises over the next few years under a promise-now-pay-later Senate plan.

If the complex proposal is passed, budget-cutters might be inspired to try the same thing on the much larger payroll for active duty federal workers and military personnel by rescheduling their January raises. Those workers receive raises based on private-sector pay changes.

Sen. Sam Nunn, D-Ga., is expected to offer an amendment to the Defense Authorization bill. It would put federal and military retirees on the same COLA cycle at the expense of the civilians. One proposal would delay civilian COLAs now due in April 1995 and 1996 until July of those years. Another would add to that by delaying the 1997 and 1998 civilian COLAs until May of those years.

Last month, the House voted to equalize the civilian-military COLAs by moving the military payments up to April. That plan was pushed by Rep. Jim Moran, D-Va., and is backed in the Senate by John Warner, R-Va., and Paul Sarbanes, D-Md.

But such a move would eliminate some of the savings scored last year in the COLA delay action. Nunn, chairman of the Armed Services Committee, is expected to propose the equal-COLA amendment that would preserve the savings. But it would leave civilian federal retirees on a harsher, and longer delayed COLA cycle.