WASHINGTON — WASHINGTON -- Budget-slashing House members backed away from their proposal to raise the minimum federal retirement age late last week, and lost their battle Monday night to change retirement rules for workers hired in the future. In their effort to reduce the federal budget by $90 billion, Reps. Tim Penny, D-Minn., and John Kasich, R-Ohio, had sought to raise the minimum retirement age for federal employees to 65, to be phased in over 20 years. But that proposal incurred the wrath of Rep. Steny Hoyer, D-Md., the head of the Democratic Caucus, whose district has many government workers. Currently, federal workers who have completed 30 years of service can retire at age 55. After 20 years, an employee can retire at age 60. After five years, a 62-year-old employee can retire. Defense Secretary Les Aspin opposed the Penny-Kasich proposal that military retirees be ineligible for cost-of-living increases until after their 62nd birthday. Rep. William Ford, R-Mich., chairman of the Education and Labor Committee, pounced on a proposal to halve the contribution the government makes to employees' pension plans. Federal employee unions joined the battle, complaining that such drastic changes would renege on the terms the government had agreed on when workers entered the federal work force. The National Treasury Employees Union put out a sample letter for opponents of the Penny-Kasich plan to sign and circulate in the House. "Rather than special treatment, the federal retirement system reflects comparable private sector practice," the letter stated. In addition, the Thrift Savings Plan pension system just finalized seven years ago should not be revisited, the letter said. Late last week, when required to submit their final plan to the House, Mr. Penny and Mr. Kasich made an important concession. Their proposed changes would not affect current employees, they decided, only those hired after Dec. 31. Still Mr. Hoyer remained fiercely opposed. As the House began its debate Monday afternoon, he took the floor to defend the administration's proposed $37 billion in additional budget cuts. The administration bill would leave federal retirement systems intact. Mr. Hoyer touted Vice President Al Gore Jr.'s National Performance Review plan as the proper vehicle to "change culture away from complacency in entitlement and toward initiative and power" in the federal work force. "The Penny-Kasich alternative goes too far," he said. Other House Democrats agreed, and the proposal was defeated, 219-213.