Two crucial programs in the US - health insurance and retirement may come under the congressional scanner for cuts in order to reduce government spending. Changes in these programs would reduce the value of benefits enjoyed by employees and retired people.
This comes in the wake of fears that the special congressional budget-cutting committee to be created by the debt ceiling bill may target federal employee benefits.
AdvertisementA 'super committee' of 12 lawmakers, evenly distributed among political parties, will be created under the debt ceiling agreement to locate potential for savings in government spending beyond cuts on agency budgets. Recommendations would be submitted by 23 November 2011 and the Congress will vote on it by 23 December.
The National Commission on Fiscal Responsibility and Reform recently carried out a study in which it examined federal spending, and isolated federal retirement and health insurance as two areas where the most cost-saving measures could be undertaken.
None of its proposals have been been enacted yet, but employee unions and other groups have voiced concerns that the new super committee will provide a ready platform for the 'unfriendly' proposals. These groups have been lobbying against such plans.
Federal plans for cost-cutting that have attracted less attention and do not pose a threat to employees' and retirees' welfare are long-term care insurance or dental and vision insurance. This is possible because the US government does not make any contribution towards these programs and makes only a partial contribution toward life insurance.
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