Double Dipping? No, Quadruple : Entitlements: Cost-of-living adjustments need to go to individuals, not to each pension; a cap would save billions.

Many in the two major political parties are talking out of both sides of their mouths about the role entitlement spending plays in the severity of the debt and deficit. A litmus test is needed to see who truly cares about ensuring the future fiscal health--and stability--of our nation.

The reform of federal pension cost-of-living adjustments should provide that litmus test. A COLA is an annual automatic raise in benefit that reflects increases in the consumer price index.

How can anyone--Democrat or Republican--claim to be fiscally responsible and yet use tax dollars and borrowings to give cost-of-living-adjustments which, for many, provide for the cost of living it up?

The National Committee on Public Employee Pension Systems believes that COLAs, at best, should only be granted on that amount--and no more--of federal pension income that goes to pay for food, clothing and reasonable shelter. Calculated in this fashion, COLAs would only support real increases in the cost of living.

I know whereof I speak: I am receiving four federal pensions (congressional/Civil Service, military reservist, Civil Service survivors and Social Security). I am entitled to these work-related pensions. I made contributions toward all but my military pension. But I should not get four cost-of-living adjustments. No one, including myself, ever paid in one cent, or worked one extra day to “earn” a COLA. On Jan. 1, the nation’s 42 million Social Security recipients will receive a 2.8% COLA. As a 30-plus-year private-sector worker--one who always paid the maximum Social Security tax--the Social Security COLA entitlement will provide me $33 a month. For the average retired worker, the Social Security COLA will provide $18 a month.

But three months later, on April 1, 1995, in addition to my Social Security COLA, I will get a 2.8% COLA on each of my three other federal pensions. I will be getting 14.6 times more in COLAs than the average retired worker under Social Security.

The grand total of my monthly COLAs will be $263--and not because of any real increase in my cost of living, but because each of my four pensions is “entitled” to a full COLA. “Quadruple dipping” into four COLAs has already allowed me to collect more than $650,000 in COLAs. Without Congress bringing sanity to this madness, I will get $500,000 more in COLAs alone if I live out my actuarial life expectancy.

Our debt-ridden-but-spendthrift government hasn’t figured out yet that it’s the person, not the pension, that needs a COLA.

The COLA cap proposed by the National Committee on Public Employee Pension Systems would largely remedy this situation. It would give full COLAs on the combined federal-pension income (including Civil Service, military pensions and Social Security) that is equivalent to the maximum yearly Social Security benefit. In 1994, at age 65, this amount was $13,764 per year ($20,646 for a qualified couple).

The cap would save the nation more than $400 billion during the lives of the federal systems’ present participants. It could, in the long run, cut the cost of the nation’s federal-pension systems in half. If someone’s combined total is less than the maximum Social Security benefit, the pensioner would continue to receive the full COLAs needed. The proposal doesn’t cut pensions; it just limits future COLA raises.

Entitlement spending and interest payments together will exceed 70% of total federal outlays by 2003 (58% for entitlements and 14% for interest). The present course is unsustainable.

Unfortunately, in public hearings held by the Kerrey-Danforth Bipartisan Commission on Entitlement and Tax Reform, one after another special-interest group lobbyist claimed that its members are not the cause of the entitlement problem. They maintain that they should be exempt from the sacrifice required for its solution. Now, both political parties are even suggesting that the budget can be balanced, and the debt reduced without touching entitlements. And politicians wonder why the public is cynical.

But only when the public puts enough heat on politicians about the severity of the debt and deficit will COLA and entitlement reform be possible.