The Transport Workers Union has rejected as unacceptable a two-year contract offer from the Metropolitan Transportation Authority that includes wage increases of 3% next year and 2% the year after.

The offer by the MTA during the sixth round of contract negotiations yesterday was the first substantial discussion of the central issues of wages, health care benefits, and retirement plans. It came on a day when the authority broke with its stance of refusing to discuss publicly the details of the negotiations.

The MTA’s chief negotiator, Gary Dellaverson, said the decision was made in part because talk of a possible transit strike “had caused an unsettling atmosphere for negotiations.”

Before outlining the authority’s “first comprehensive proposal,” Mr. Dellaverson said he was optimistic that a contract would be signed before the current three-year contract expires at just after midnight next Thursday, a sentiment not shared by Governor Pataki.

“We haven’t seen the progress I’d like to see,” Mr. Pataki told reporters yesterday.

The president of the Transport Workers Union Local 100, Roger Toussaint, seemed to agree, saying the offer of a 3% raise was nothing more “than a starting point,” as it does not exceed the 3% annual wage increase workers received in the last two years of their existing contact.

Mr. Toussaint called the second year’s 2% wage increase, along with contributions union members are being asked to pay toward their health care and pension benefits, “an insult to our members,” especially considering that the environmental hazards and dangers of the work are high.

“These are terms we will not accept,” Mr. Toussaint said. “This contract has to be negotiated at the table, not by insults and provocations.”

Following news of the MTA’s proposal, speculation arose that workers were engaging in a “slowdown,” purposefully running trains behind schedule. Some trains, like the uptown no. 4, were unusually crowded yesterday afternoon.

Mr. Dellaverson called the possible slowdown “unacceptable but manageable,” and Mr. Toussaint said such an action, if true, was unauthorized.

“It would not surprise me,” Mr. Toussaint said, “that as transit workers hear about the insults that are being passed across the table by the MTA, that that gets reflected in service on the subways and buses.”

The proposed wage increases for the 32,000 workers who belong to the union would cost the authority $100 million over two years. The second-year wage increase, however, would require workers to first reduce their number of allotted sick time by an average of 1.3 days next year.

Just as important to each side are issues surrounding pensions and health benefits, both of which consume a large portion of the MTA’s budget and are considered generous by private sector standards.

Under the MTA proposal, workers would contributions to their health benefit for the first time makes. The proposed contribution of 2% of a worker’s wages would total about $1,000 a year for train operators, who earned on average $50,000 before overtime and other bonuses in 2004.

MTA officials said the contribution is necessary given the dramatic growth of health care costs: The officials said the costs have risen to $410 million annually in 2005 from $291 million in 2002, a 12% annual increase.

The presence of a $1 billion surplus has heightened the workers’ expectations of greater wage and benefit increases. But the MTA has maintained that using $450 million of that surplus to pay off pension liabilities represents a significant contribution to workers’ benefits.

With about 20,000 retirees, the MTA’s annual pension costs have tripled since 2002,to $450 million this year, a number that is expected to increase by $100 million next year. That trend is “unsustainable,” Mr. Dellaverson said.

Currently, almost all employees with 25 years of service can retire at age 55 and continue receive half their salary. The MTA wants to raise the minimum age when employees can receive pensions to 62 for those workers with five years on the job.

The MTA has also asked workers to increase the amount they pay toward their pensions, to 3% from 2% of their salary.

From the union members’ point of view, the authority did not help negotiations by offering only a two-year contract instead of the traditional three-year term. Mr. Dellaverson said the expected budget deficits beginning in 2008 would “burden negotiations” if that year were to be included in a new contract.

To officials like John Moony, a union vice president, the two-year contract offer seemed like another concession.

“We’ve been giving back so much, if we gave back any more, we’d be working for free,” he said.