90t h Congkess ) HOUSE OF REPRESENTATIVES ( Document 1st Session j ( No. 156

FEDERAL EMPLOYEES’ INSURANCE

MESSAGE

FROM

THE PRESIDENT OE THE UNITED STATES

RETURNING

WITHOUT APPROVAL THE BILL (H.R. 11089) TO AMEND TITLE 5, UNITED STATES CODE, CONCERNING FEDERAL EMPLOYEES' LIFE INSURANCE

August 14, 1967.—Referred to the Committee on Post Office and Civil Service and ordered to be printed together with the accompanying bill.

To the House of Representatives: I am compelled to return, without my approval, H.R. 11089—a bill which would cause large increases in life insurance coverage for govern­ ment employees, officials and Members of Congress. I am returning this bill because it places too heavy a burden and levies too heavy a charge on the American taxpayer by providing private insurance out of public funds. I am returning it because it sets an unwise precedent at a critical time in our history. Today, we dare not divert our resources for un­ necessary demands, when there are many more crucial needs which urgently require our support. Life insurance is but one of many fringe benefits a government employee or official receives. Certainly government life insurance was never intended to meet entirely the needs of an employee or his family. It is meant primarily to supplement his personal coverage. Nevertheless, we know that the life insurance program must be strengthened and improved. That is why last year I recommended needed changes in insurance benefits to Congress that I considered reasonable and fair. Congress, however, far exceeded my recommendation. And so last year I was compelled to disapprove the life insurance measure because

85-011
2 FEDERAL EMPLOYEES’ INSURANCE

it threatened to fuel the fires of inflation and to impose an unwar­ ranted burden on the taxpayer. Again this year hoping for a sound program, I recommended an­ other modest measure. In June, I called for a $13 million program designed to— — make the insurance system actuarially sound. — remove an inequity by providing additional coverage. The bill which finally passed the Congress was subjected only to brief debate. The roll was not called in either House on the passage of this bill. It was passed by voice vote. If this measure were approved, the cost to the American taxpayer would rise from the $13 million I recommended to a minimum of $61 million in the first year and continued commitments for the future. The bill would substantially increase life insurance coverage at the taxpayer's expense for all government officials and employees: —For most by 33% percent—an unnecessary expense. —-For a selected few—the President and Vice President, Cabinet and sub-Cabinet officials, the Members of Congress, Members of the Judiciary, and U.S. Ambassadors, all those in the highest brackets who need it the least—by 100 percent, to $40,000—an unwarranted expense. Finally, it would increase the government's contribution for each employee from 33 }i percent to 40 percent. This bill would impose an added burden on the American taxpayer just when we are asking him to pay a 10 percent tax surcharge. And, because our budget is tight, it would syphon funds away from Ameri­ cans who need our support much more: children, the poor, the elderly—and most important, American fighting men in Vietnam. In the face of a possible $29 billion deficit, we must scrutinize every dollar that we spend. To keep the budget within bounds and to head off the threat of inflation, I pledged in my Economic Message last week that “I will make every possible expenditure reduction- civilian and military—short of jeopardizing the national security and well-being." H.R. 11089 does not meet this rigorous test. Over the past ten years, the salaries of Federal employees have risen by nearly 75 percent—and their life insurance coverage has risen by the same amount, 75 percent. Since I have been President, there have been four successive civilian pay increases—and four insurance increases. The total cost of these programs has amounted to more than $2 billion. And with the new 4.5 percent pay increase which I have proposed for this year, we Mil be adding almost another half billion dollars to civilian pay and insurance and another half billion dollars for military pa}". Against this background, 1 can see no justification for the large life insurance increases voted by the Congress. The 4.5 percent pay proposal I submitted in April is fair and just for Federal personnel. Yet Congress is now considering adding an extra $1 billion to the Administration pay bill. This is equivalent to a 2 percent tax surcharge; it would come directly out of the pocket
FEDERAL EMPLOYEES’ INSURANCE 3

of the American taxpayer. We must hold the line—and we must hold that line in the pay bill. This same sense of economy and responsibility must be maintained on all matters. All of us are dedicated to the well-being of the 3 million Federal employees who serve the Nation’s cause. The record of this Adminis­ tration, and of the past three Congresses, attests to that dedication. But the President must be concerned with the total public interest. Every taxpayer—including the citizen who is a public servant—should bear in mind this larger interest. That is why I must return this measure unapproved. Certainly there are good and acceptable features in the bill now before me. —It contains a new provision to raise the minimum coverage to $10,000 for those employees in the lower grades who need pro­ tection the most. —It places the insurance program on a sound actuarial basis. If the Congress wishes to provide additional coverage over and above my recommendations, ways might be explored to permit direct purchases by the employee with his private funds under current group plans. But the employee who benefits directly—not the taxpayer— should be asked to bear this added cost. I have asked the Chairman of the Civil Service Commission and the Director of the Budget to begin working immediately with the appropriate Committees of the Congress toward an acceptable 

program. I hope the Congress will take my comments and recommendations into account. I hope the Congress can send to me—this year—a wise; fair, and well-justified bill—a bill that is both responsive to the needs of the Federal employee, and responsible in light of America’s economic needs. I would be proud to sign such a measure.

L yndon B. Johnson.

The White H ouse, August 12, 1967.

H.R. 11089

N in e t ie t h Co n g r e s s of t h e U n it e d S t a t e s of A m e r ic a, at t h e F ir st S e ssio n, B e g u n a n d H eld at t h e Cit y of W a sh in g t o n on T u e s d a y , t h e

T en t h D ay of Ja n u a r y , On e T h o u sa n d N in e H u n d r e d a n d Six t y -s e v e n

AN ACT To amend title 5, United States Code, to provide additional group life insurance and accidental death and dismemberment insurance for Federal employees, and to strengthen the financial condition of the Employees' Life Insurance Fund.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That (a) section 8704(a) of title 5, United States Code, is amended to read as follows: “(a) An employee eligible for insurance is entitled to be insured for an amount of group life insurance plus an equal amount of group accidental death and dis­ memberment insurance, in accordance with the following schedule; which schedule shall be automatically extended correspondingl}7 whenever the rate of annual pay assigned by section 5313 of this title to positions of level II of the Executive Schedule is increased:
4 FEDERAL EMPLOYEES’ INSURANCE

“ If annual pay is— The amount of group life insurance is—

The amount of group acci­ dental death and dismem­ berment insurance is— Greater than— But not greater than—

0

$7,500 8,250 9,000 9,750 10.500 11.250

12,000 12.750 13.500 14.250 15.000 15.750 16.500 17.250 18.000 18.750 19.500 20.250 21,000 21.750 22.500 23.250 24.000 24.750 25.500 26.250 27.000 27.750 28.500 29.250

$7,500 8,250 9,000 9,750 10, 500 11.250

12,000 12.750 13.500 14.250 15.000 15.750 16.500 17.250 18.000 18.750 19.500 20.250 21,000 21.750 22.500 23.250 24.000 24.750 25.500 26.250 27.000 27.750 28, 500 29.250

$10,000

11,000

1 2 ,0 0 0 13.000 14.000 15.000 16.000 17.000 18.000 19.000

20.000 

21,00 0 

22,000 23.000 24.000 25.000 26.000 27.000 28.000 29.000 30.000 31.000 32.000 33.000 34.000 35.000 36.000 37.000 38.000 39.000 40.000

$10,000 11,000 

1 2 ,0 0 0 13.000 14.000 15.000 16.000 17.000 18.000 19.000 20.000 21,000 

22,000 23.000 24.000 25.000 26.000 27.000 28.000 29,000 30,000 31.000 32.000 33.000 34.000 35.000 36.000 37.000 38.000 39.000 40,000" .

(b) Section 8707 of title 5, United States Code, is amended to read as follows:

“ § 8707. Employee deductions; withholding

r1 During each period in which an employee is insured under a policy of insurance purchased by the Civil Service Commission under section 8709 of this title, there shall be withheld from the pay of the employee his share of the cost of his group life insurance and accidental "death and dismemberment insurance. The amount withheld shall be at the rate, adjusted to the nearest half cent, of 60 percent of the level cost of each $1,000 of insurance, as determined by the Commission.”. (c) Section 8708(a) of title 5, United States Code, is amended to read as follows: “(a) For each period in which an employee is insured under a policy of insurance purchased by the Civil Service Commission under section 8709 of this title, an amount equal to 40 percent of the level cost, as determined by the Commission, of the insurance shall be contributed from the appropriation or fund which is used to pay him.”.

S e c . 2 . The amendments made by this Act shall take effect on the first day of the first pay period which begins on or after the sixtieth day following the date of enactment of this Act, but shall have no effect in the case of any employee who died, was finally separated, or retired before such date of enactment. In the case of an employee who dies or retires during the period beginning on^the date of enactment of this Act and ending immediately before the effective date of such amendments, the amount of insurance shall be determined as if such amendments were in effect during such period.

J o h n W. M c C o r m a c k ,

Speaker of the House of Representatives.

H u b e r t H . H u m p h r e y ,

Vice President of the United States and President of the Senate.

[Endorsement on back of bill:] I certify that this Act originated in the House of Representatives.

W . P a t J e n n i n g s , Clerk.

O