THE FEDERAL DIARY: A Crucial COLA Test
n apparent White House-congressional budget agreement could mean smaller inflation raises for federal civilian retirees or smaller future pension benefits for* people still on the payroll.</br></br>"Budget watchers believe that the White House and Republican congressional leaders have reached tentative agreement on a five-year budget to reduce federal retirement costs. If thatÛªs true, it means that "onlyÛ the $6.2 billion in savings proposed by President Clinton will be sought. The dollar amount of those proposed savings may be "scoredÛ at $6.8 billion by the Congressional Budget Office.</br></br>Agreement is good news, up to a point. Earlier, federal unions had predicted that Republicans would pile their own cuts on top of the cuts proposed by the president.</br></br>Under the White House plan, retirement costs would be reduced three ways: ÐÊÛCost-of-living adjustments for federal retirees would be delayed from January to April in each of the next five years. The National Association of Retired Federal Employees says such a delay amounts to a 25 percent COLA cut. COLAs for military retirees and people getting Social Security would not be affected.</br></br>a Payroll deduction contributions to the retirement fund would be increased by half a percent of salary for federal workers.