Nor can there be any claim that the 1984 statute establishing the scheduled COLA creates the property interest plaintiffs assert independent of the underlying statutory scheme. The statute provides that "effective December 1 of each year, each annuity . . . shall be increased by" a COLA. 5 U.S.C.A. § 8340(b) (West Supp. 1985). This makes clear that there is no distinction between some "underlying" annuity and the COLA. The COLA is merely part of the calculation of the current annuity. Thus, on December 1, 1985, the calculation of benefits increased by 3.1% over the previous month. Had Congress not intervened on December 12, 1985, the monthly annuity payment on January 2, 1986 would have reflected that increase. Since under Stouper Congress can decrease the annuity at any time, we see no reason why it cannot increase the rate at which the annuity is calculated and then decrease it again before payment.
Any other construction would be inconsistent with the history of COLA legislation. Beginning in 1976, Congress repeatedly amended the COLA provision to reduce the cost of the program. In 1976, Congress repealed the 1% "kicker" that was previously added to each COLA. See Pub. L. No. 94-440, 90 Stat. 1462 (1976). This repeal was upheld in Zucker v. United States, 758 F.2d 637 (Fed. Cir.), cert. denied. 474 U.S. 842, 106 S. Ct. 129, 88 L. Ed. 2d 105 (1985). There, the court explicitly rejected the claim that retirees have a constitutionally protected right to receive COLAs based on the formula in effect at the time of their retirement. In 1981, Congress again amended the COLA provision to replace the then twice-yearly COLA with a single annual adjustment. See Pub. L. No. 97-35, § 1702(a), 95 Stat. 357 (1981). The NARFE's subsequent challenge to this amendment as an unconstitutional taking of private property without just compensation was rejected in NTEU v. Devine, 591 F. Supp. 1143 (D.D.C. 1984), on the ground that there is no "protected property interest in the COLA benefits." Id. at 1147; see id. at 1148-49.
The current COLA provision was the last congressional effort to reduce the spiraling costs of the retirement program before the enactment of Gramm-Rudman. The 1984 enactment deferred the effective date of the annual COLA from March 1 to December 1, thereby effecting substantial savings. See Pub. L. No. 98-270, § 201, 98 Stat. 157 (1984). It is highly unlikely that, by legislating a delay in the effective date of COLAs, Congress intended to grant plaintiffs a vested right to a year's worth of COLA increases. Certainly Congress did not believe that to have been the effect of the statute since it felt free in enacting Gramm-Rudman on December 12, 1985, to suspend the payment of scheduled COLA increases.
We need not speculate whether Congress could legislate a retirement benefit in language that precluded itself or any future Congress from decreasing or eliminating that benefit. Plaintiffs have cited no case, and we know of none, holding that Congress may tie its own hands in this fashion. Assuming that to be possible, however, it is clear that the presumption against reading a statute to have such an effect overcomes language much stronger than that under consideration here. In Dodge v. Board of Education, 302 U.S. 74, 82 L. Ed. 57, 58 S. Ct. 98 (1937), a retired school teacher challenged the constitutionality of a state statute reducing the amount of her retirement annuity from $1500 to $500. The statute in effect at the time of her retirement provided: "Each person so retired . . . shall be paid the sum of fifteen hundred dollars ($1500.00) annually and for life from the date of such retirement . . . ." Id. at 76 (emphasis added). Despite this unconditional, mandatory language, the Court upheld the reduction, stating "the presumption is that such a law is not intended to create private contractual or vested rights but merely declares a policy to be pursued until the legislature shall ordain otherwise." Id. at 79.
The reasons for the strength of the presumption enunciated in Dodge are apparent: the legislature requires flexibility in financial matters. Hence, what the Supreme Court said of the social security program a quarter century ago applies to the retirement annuities at issue here:
That program was designed to function into the indefinite future, and its specific provisions rest on predictions as to expected economic conditions which must inevitably prove less than wholly accurate, and on judgments and preferences as to the proper allocation of the Nation's resources which evolving economic and social conditions will of necessity in some degree modify.
Flemming v. Nestor, 363 U.S. 603, 610, 4 L. Ed. 2d 1435, 80 S. Ct. 1367 (1960). The law is so clear and consistent that plaintiffs must be judged to have not the shadow of a case.
Defendants' motion for judgment on the pleadings is granted, plaintiffs' motion for judgment on the pleadings is denied, and plaintiffs' claim is hereby
Dismissed. [EDITOR'S NOTE: The following court-provided text does not appear at this cite in 633 F. Supp.]
This comes before the Court on cross-motions for judgment on the pleadings filed by the parties. Having given careful consideration to the motions, the oppositions thereto, the record in this case, and the arguments of counsel, the Court concludes, for the reasons set forth in the accompanying defendants motion should be granted and opinion, that motion should be denied. plaintiffs
In view of the above, it is hereby
ORDERED that plaintiffs' motion for judgment on the pleadings is denied, and it is further
ORDERED that defendants' motion for judgment on the pleadings is granted, and it is further
ORDERED that this case is dismissed.