In the movie classic Casablanca, a cynical/corrupt Vichy French police captain stages a mock investigation of a crime. He orders his men to “round up the usual suspects” and life goes on. Fast forward from a 1940s Hollywood movie lot to the real world (sort of) of Washington, D.C. with the White House about to be under new management.
Experts that predicted there was no way billionaire Donald Trump could win the White House have now changed clothes and, and tactics, and are bombarding the federal family with tales of horrors to come. Whether their legislative predictions will turn out to be better than their electoral college estimates remains to be seen. But there is clearly about to be a new sheriff in town.
So the question for federal workers and maybe especially federal retirees is what’s going to happen next? Will President Trump pursue a lineup composed of the usual suspects (freeze hiring, curb pay, overhaul the pension plan) or will more pressing matters save them — again — from the knife? Like it has before under both Democratic and Republican presidents.
Will the next two, four, possibly eight years be more of the same-old assaults on the “good life” in the civil service, or will something major — as in bad — happen. Maybe lots of somethings.
Most of the attention as to what the next President might do to active and retired feds focuses on things like changes in the pension plan (eliminating the defined benefit of FERS), hiring freezes and the like. Which agencies might (or might not) be crippled or eliminated. Stuff that is raw meat in politics.
But a more serious concern (because it is more likely to happen) is what if the new President and Congress concentrate on getting some old (at the time pie-in-the-sky) ideas enacted into law. One change popular with key GOP members of Congress would change the way cost-of-living adjustments are computed for federal and postal retirees, retired military personnel and the huge number of Americans who get Social Security benefits. Cost-of-living adjustments (COLAs) for retirees are now based on one of the Consumer Price Indexes that measures living costs in urban areas. A simple, but massive change, if Congress approves it would base future COLAs on the so-called Chained CPI.
Switching from the CPI-W to the chained CPI formula would reduce each future COLA for retirees by $35,000. If it were in use now, there might not have been a January 2017 COLA. Instead, the retirees will get O.4 percent, the smallest on record.
Backers of the chained CPI — including the Obama administration — say that in addition to saving millions of dollars in coming years, it is realistic because when certain things — like steak — go up in price, people switch to less-expensive chicken. Opponents, like the National Active and Retired Federal Employees, say it’s an unrealistic, unfair measure which would quickly reduce retirees to eating cat food instead of steak or chicken. While it hasn’t been a legislative threat for several years it should be on everyone’s radar of possible things-to-come. NARFE legislative director Jessica Klement said that if it became the new yardstick, the average CSRS retiree could lose up to $55,700 over 25 years in reduced benefits.
Going to the chained CPI might well be unrealistic and unfair. But changing downward the way COLAs (for every retiree in the country) are calculated could save billions of dollars down the road. Much more than other, complex proposals to “reform” and revamp the civil service. Congress would have to approve any such change and Congress normally doesn’t like to mess with Social Security in any way, shape or form. But limiting it to federal retirees might be politically popular. For a look at what the Chained CPI would mean to you, click here.