The Foreign Service Journal, June 2003

JUNE 2003 • AFSA NEWS 9 nearing the end of our four-year effort to amend the tax code concerning the current two-in-five-years occupancy requirement to exclude the tax on capital gains on the sale of a primary residence. TheSenatehas nowpassedabillfixingthisproblemforboth theForeignServiceand theuniformedmil- itary. TheHousepassedadifferent version, also covering bothForeignService and the military. Wearenowtalkingwithkeyplay- ersinbothchambersurgingthemtoresolve the differences and adopt a final version to send to the president for enactment. AUTHORIZATIONBILL: AFSAhas recently metwithmajorityandminoritystaffersfrom boththeSenateForeignRelationsCommittee and the House International Relations Committee, pushing for provisions to: 1) authorize the payment of Overseas Comparability Pay; 2) give the Secretary of State more dis- cretion towaivedual compensation limita- tionsonForeignService retireeswhoreturn to work for the department (AFSA is sup- porting the department’s proposal); 3) raise the cap onpost differential pay- ments from25 to 35 percent of base pay (a proposalfromthedepartment’srecenthard- shipstaffingworkinggroupthatwasnotpart of the administration’s request); 4) place a deadline for the Office of Personnel Management to implement last year’s lawallowingcertainPITs tobuyback retirement credit; 5) allowForeignServicemembers toget advancesonsalarywhenthey transfer from overseas back to the U.S.; 6) allowForeignServicemembers serv- ing at hardship posts to be reimbursed for out-of-pocket expenses for property man- agement services when they rent out their primary residence; and 7)amendthe5-percentlow-rankingrule togiveselectionboardsthediscretiontolow- rank a smaller percentage of employees. OVERSEASCOMPARABILITYPAY: Despite our efforts, there isnorealistichopeof con- vincing Congress to implement Overseas ComparabilityPaywithout the full support of the administration. Secretary Powell soughtsuchsupportfromtheOMBlastfall, but his request was rejected. Thus, AFSA’s current task is to begin to educate the Hill onthemeritsofthisissueinanefforttosoft- en up the ground for a hoped-for admin- istration push for Overseas Comparability Pay. That push, if it ever comes, will not be before late this yearwhen theFY2005bud- get request is finalized. CONTACTWITH SENATOR LUGAR: AFSA President John Naland and two retired ambassadors (representing the Foreign Affairs Council) met with Senate Foreign Relations Committee Chairman Richard Lugar, R-Ind., andhis chief of staff inApril. The group made a strong pitch for con- gressional support for Secretary Powell’s efforts to secure a sustained infusion of resources for personnel, information tech- nology, security and facilities. A longtime friendof theForeignService, SenatorLugar expressedhisstrongsupportanddetailedhis efforts to increase the resources devoted to internationalrelations. Themeetingwasvery upbeat and positive. MILLENNIUM CHALLENGE ACCOUNT: AFSA submitted testimony to the Senate Foreign Relations Committee expressing its views on the administration’s request- edMCA legislation. We urged the com- mittee to include the administrator of USAID on the Millennium Challenge Corporation Board, and fully utilize and integrate the expertise of the Foreign Service at the agency. We also urged that consideration be given to the increased demands on the personnel at USAID. APPROPRIATIONS: AFSAhas submitted testimony to the House and Senate Appropriations Subcommittees on Commerce, Justice, State and the Judiciary, and to the House Foreign Operations Subcommittee. In theCSJ testimonies, we pointed out the importance of fully fund- ing, at a minimum, the administration’s request. Wespokeoftheneedtocompletely fund the third year of the Secretary’s Diplomatic Readiness Initiative to fill the 1,100-person shortage identified in reports from1999 and 2000. We noted that these reportsarenowthreeyearsold,andthatper- sonnel needs should be continuously examined. We continued to urge funding for embassy security, but alsopointed to the need toprovideprotection for our families in our overseas communities, in their homes, inthe schools andelsewhere. Intes- timonysubmittedtotheForeignOperations Subcommittee,weemphasizedtheneed for more funding in theoperations account for State, and perhaps more importantly, we urged thatUSAIDreceive the same support for security funding that thedepartmenthas received. PRE-TAX ANNUITIES FOR HEALTH PREMIUMS: Federal employees and annu- itants pay an average share of 29 percent for federal health premiums and the fed- eral government picks up the other 71per- cent. However, since October 2000, the impact on active-duty employees and retired annuitants has been different: employees can now pay their 29 percent inpre-taxdollars, while annuitants cannot. This saves the average active-duty employ- ee about $435 a year. Rep.TomDavis,R-Va.,introducedH.R. 1231 and Senator John Warner, R-Va., introduced an identical bill, S. 623, in the Senate. These bills, targeted specifically at federal and military annuitants, have 190 cosponsors in the House and 23 cospon- sors in the Senate. They seek to amend Section 125 of the TaxCodebyaddressingtheconcernsofmil- itary and federal employees. The political difficulty is that it is anticipated that there would be a huge demand fromthe private sector seeking this same premiumconver- sion benefit. That is where the cost — a multibillion-dollar impact on federal rev- enues — comes in, and it has dissuaded many lawmakers fromsupporting the leg- islation. Despite these obstacles, under the lead- ership of the National Association of RetiredFederal Employees and theMilitary OfficersAssociationofAmerica, AFSAand the other federal employee organizations continue towork together to seek the nec- essary change in law. We agree with ChairmanDavis,who saidthattheproposal is the right thing todo, bothas away to rec- ognize the importanceof public service, and to rectify an inequity. Members, especial- ly retirees, who wish to write to their con- gressional delegation supporting this legis- lation are urged to do so. ▫ Legislative • Continued from page 1