A bill to amend part C of the Balanced Budget and Emergency Deficit Control Act of 1985 to provide that cost-of-living increases in benefits under the civil service, military, and Postal Service retirement and disability programs shall be exempt from reduction pursuant to sequestration orders issued with respect to fiscal year 1987 and subsequent fiscal years.

Amends the Balanced Budget and Emergency Deficit Control Act of 1985 (Gramm-Rudman-Hollings Act) to exempt cost-of-living increases in civil service retirement and disability programs, (including the Central Intelligence Agency retirement and disability system, the Comptrollers General retirement system, the Foreign Service retirement and disability system, the judicial survivors' annuities system, the National Oceanic and Atmospheric Administration retirement system, the Coast Guard retirement system, the Public Health Service commissioned officers retirement system, and the Tax Court judges survivors' retirement system), military retirement benefits and certain railroad retirement benefits from reduction under the President's sequestration order.

Makes this Act effective for fiscal years beginning after October 1, 1986.