Waging Battle
Tucked away in President Obama’s fiscal 2011 budget blueprint is a proposal that reignites a decades-old debate over whether the government should impose an age cap on compensation to federal employees with job-related illnesses or injuries.
The administration estimates that it can save more than $400 million during the next decade by overhauling the 1916 Federal Employees Compensation Act, which provides federal workers up to 75 percent of their basic pay, adjusted for inflation, if they are injured on the job, or suffer from a job-related illness — unless or until they recover. In exchange, employees give up the right to sue the government for certain damages, such as pain and suffering. Private sector workers’ compensation claims and benefits differ by state.
The Terminations, Reductions and Savings volume of Obama’s budget plan includes a recommendation to end full FECA benefits for future recipients when they reach retirement age; instead the government would provide them retirement annuity-level benefits. Other proposed reforms include streamlining claims processing and allowing the government to recover compensation costs from third parties involved in the injury. It does not appear that the proposal would affect current retirement-age FECA recipients.
Lawmakers and other government officials long have criticized the lack of an age limit on FECA benefits, claiming the system is supposed to replace lost wages, not provide money for retirement. Current law provides a strong incentive for recipients to avoid retirement and instead continue collecting FECA payments, long after they would have otherwise retired, critics maintain.