Last week the Washington Post reported on a proposal from President Obama’s administration that would reduce workers’ compensation for federal employees.

Currently, the compensation level for injured workers with no dependents is two-thirds of their pre-injury wages. For employees with dependents, about 64 percent of the recipients, the compensation level is 75 percent. . . . the Labor Department is calling for one rate, 70 percent for all, which would mean reduced benefits for the majority of future recipients. . . .

The administration says the current program, with its tax-free compensation, can encourage workers to stay off the job longer than necessary.

As the Washington Self-Insurers Association notes, “The same arguments about return-to-work impact of very generous benefit levels apply in this Washington as well.” But the article struck me for a different reason:

Labor supports reforming workers’ comp, [Ron Watson, of the National Association of Letter Carriers] said, “provided it does not result in unfair harm to the injured workers the [Federal Employees Compensation Act] was designed to protect.”

Harm comes in more than one form. Suffering a serious injury then dealing with the bureaucracy “is financially and emotionally draining,” said Keith Wagner, a Seattle letter carrier.

(Emphasis added.) This reminded me of the closure effect, which we wrote about in “The Best Interests of Washington’s Workers’ Compensation System.” As Pennsylvania Judge David Torrey has found, among workers who take a lump sum settlement of their claim,

a sizeable group of claimants, many of whom were quite vocal, stated that their motive was relief from the claims adjustment process and/or the stress of litigation. . . . The majority of claimants expressed their reason for settling in a simple fashion: ‘to get on with my life.’