Tax Panel Takes Care of Its Own

The House Ways and Means Committee voted to tighten taxation of pensions paid to federal workers but quietly included a provision exempting lawmakers and their staffs, congressional aides said Saturday.

Unions representing government workers angrily attacked the exemption, saying they will oppose the tax-overhaul measure.

The amendment would require most federal employees to pay taxes on pension benefits from the day they retire. Currently, pensions are exempt from taxes for the first three years and then are taxed only if retirees draw out more than they contributed to the pension fund.

Under the proposal, the 535 members of Congress and their staff members would continue to enjoy that tax deferral.

The amendment was not mentioned in a Ways and Means Committee news release on the tax reform bill or by committee members who briefed reporters.

By the change, Ways and Means Committee members hope to raise an estimated $8 billion in tax revenue over five years, to offset money lost by reducing individual tax rates.

The exemption appears on page 861 of the 1,363-page proposal, but does not mention members of Congress or their staffs. Rather, as has been the case with previous bills touching on congressional earnings, it defines those exempted in a way that can only mean lawmakers and their aides.