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Entitlements vs. the Economy

My first column stated my

view of the three dimensions

of my responsibilities to you—

retail, wholesale and existen-

tial—and discussed the retail

challenges of navigating the

retirement process.

The second, or whole-

sale, dimension of AFSA’s

responsibilities to retirees is

the defense of our statutory

retirement benefits—our

entitlements. In fact, this

imperative applies to all AFSA

members and Foreign Ser-

vice employees, as virtually

all of us will someday reach

that magic status of “retired.”

Our AFSA board, like its

predecessors, is fully com-

mitted to preserving the

benefits which were, and

are, part of the contractual

terms and conditions of our


That said, none of us

should have any doubts about

the harsh realities of the cur-

rent fiscal environment. The

increasing national deficit,

largely driven by automatic

entitlement increases that

can only be changed by law, is

simply unsustainable. Every

year the discretionary budget

shrinks in relative terms, thus

enhancing the pressure for

entitlement reform.

If, or more likely when,

a “grand bargain” is finally

negotiated, our entitlements

will be on the table along with

all others, and we will not

be exempt from the adjust-

ments our fellow citizens

will face (e.g., chained cost

of living adjustments, higher



Views and opinions expressed in this column are solely those of the AFSA Retiree VP.


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retirement age, means test-

ing and the like).

In fact, serious and equi-

table entitlement reform is

in all of our interests. It will

provide a basis for stable

economic growth and entitle-

ment security going forward.

If, however, there is any effort

to force federal employees in

general, or Foreign Service

personnel in particular, to

bear a heavier burden than

other citizens, AFSA will join

our fellow federal unions to

fight such efforts, including in

the courts.

There are more immedi-

ate problems, as well. First,

there is the possibility that in

regular budgetary or seques-

ter processes efforts will be

made to reduce the Interna-

tional Affairs Budget (aka the

150 Account) by, for example,

requiring active and retired

employees to pay a higher

percentage of their health

insurance premiums. We will

counter any such efforts by

mobilizing our resources in

the legislative arena, as we

have successfully done in the


Finally, there is a special

situation that our lawyers

and the board are studying.

The Foreign Service Retire-

ment System is separate

and fully (about 95 per-

cent) funded. Other federal

programs are not. Social

Security’s disability fund is

already out of assets and

its retirement and Medicare

funds will reach the same

fate in a few decades.

In a deteriorating fiscal

environment, the tempta-

tions to “raid” our fund or

merge it with another in

deficit will increase. We need

to be prepared on this front.

In short, our strategy is

to stay informed, accept the

shared sacrifice in nation-

wide entitlement reform

legislation, and fight legisla-

tively and legally any efforts

to impose special burdens on

our retirees.

Writing this column has

forced me to take a hard-

eyed look at our retiree

benefits situation. It is what

it is, and we will do what we




On Sept. 14, American Foreign Service Association

President Ambassador Barbara Stephenson participated

in a panel discussion, “Is American Diplomacy at Risk?”

The event was sponsored by the U.S. Foreign Policy and

National Security Program at American University. Amb.

Stephenson acknowledged that American diplomacy

is at risk, but encouraged A.U. students to pursue their

dreams of joining the Foreign Service, promising to do her

best as AFSA president to restore a healthy career path

for them. From left: Panel moderator and A.U. School of

International Service’s Diplomat in Residence Ambassa-

dor Anthony Quainton, American Academy of Diplomacy

President Ambassador Ronald Neumann, Stephenson and

SIS Associate Professor Charles Call.



Serious and equitable entitlement reform

will provide a basis for stable economic

growth and entitlement security going