<DOC>
[109th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:27513.wais]
OPM'S 2007 BUDGET AND NEW STRATEGIC AND OPERATIONAL PLAN: A DISCUSSION
WITH THE OPM DIRECTOR
=======================================================================
HEARING
before the
SUBCOMMITTEE ON THE FEDERAL WORKFORCE
AND AGENCY ORGANIZATION
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
__________
MARCH 28, 2006
__________
Serial No. 109-141
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpoaccess.gov/congress/
index.html
http://www.house.gov/reform
______
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COMMITTEE ON GOVERNMENT REFORM
TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut HENRY A. WAXMAN, California
DAN BURTON, Indiana TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee DIANE E. WATSON, California
CANDICE S. MILLER, Michigan STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California LINDA T. SANCHEZ, California
JON C. PORTER, Nevada C.A. DUTCH RUPPERSBERGER, Maryland
KENNY MARCHANT, Texas BRIAN HIGGINS, New York
LYNN A. WESTMORELAND, Georgia ELEANOR HOLMES NORTON, District of
PATRICK T. McHENRY, North Carolina Columbia
CHARLES W. DENT, Pennsylvania ------
VIRGINIA FOXX, North Carolina BERNARD SANDERS, Vermont
JEAN SCHMIDT, Ohio (Independent)
------ ------
David Marin, Staff Director
Teresa Austin, Chief Clerk
Phil Barnett, Minority Chief of Staff/Chief Counsel
Subcommittee on the Federal Workforce and Agency Organization
JON C. PORTER, Nevada, Chairman
JOHN L. MICA, Florida DANNY K. DAVIS, Illinois
TOM DAVIS, Virginia MAJOR R. OWENS, New York
DARRELL E. ISSA, California ELEANOR HOLMES NORTON, District of
KENNY MARCHANT, Texas Columbia
PATRICK T. McHENRY, North Carolina ELIJAH E. CUMMINGS, Maryland
JEAN SCHMIDT, Ohio CHRIS VAN HOLLEN, Maryland
Ex Officio
HENRY A. WAXMAN, California
Ron Martinson, Staff Director
Chad Bungard, Deputy Staff Director
Alex Cooper, Clerk
Tania Shand, Minority Professional Staff Member
C O N T E N T S
----------
Page
Hearing held on March 28, 2006................................... 1
Statement of:
Springer, Linda M., Director, Office of Personnel Management. 11
Letters, statements, etc., submitted for the record by:
Davis, Hon. Danny K., a Representative in Congress from the
State of Illinois, prepared statement of................... 8
Porter, Hon. Jon C., a Representative in Congress from the
State of Nevada, prepared statement of..................... 4
Springer, Linda M., Director, Office of Personnel Management,
prepared statement of...................................... 16
OPM'S 2007 BUDGET AND NEW STRATEGIC AND OPERATIONAL PLAN: A DISCUSSION
WITH THE OPM DIRECTOR
----------
TUESDAY, MARCH 28, 2006
House of Representatives,
Subcommittee on Federal Workforce and Agency
Organization,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 10 a.m., in
room 2154, Rayburn House Office Building, Hon. Jon C. Porter
(chairman of the subcommittee) presiding.
Present: Representatives Porter, Davis of Virginia, Davis
of Illinois, Norton, Cummings, and Van Hollen.
Staff present: Ronald Martinson, staff director; Chad
Bungard, deputy staff director/chief counsel; Chad
Christofferson, legislative assistant; Patrick Jennings, OPM
detailee/senior counsel; Tania Shand, minority professional
staff member; and Teresa Coufal, minority assistant clerk.
Mr. Porter. Good morning. I'd like to bring the meeting to
order.
Linda, you were supposed to bring coffee and doughnuts for
everyone in the audience today.
Ms. Springer. They're a little late.
Mr. Porter. Just checking.
Again, thank you all for being here today. A quorum is
present. The Subcommittee on Federal Workforce and Agency
Organization will come to order. Again, Director Springer,
thank you for being here today and for your help and for all
that you have accomplished in the last year.
Today I know you're here to talk about your 2007 budget
request from the President and the release of an aggressive,
Strategic and Operational Plan for OPM by yourself.
The time is right to examine the OPM's goals and its
progress of ongoing initiatives. Let me be the first to say
that I'm quite impressed with OPM's new strategic and
operational plan for the next 5 years. Quite frankly, it takes
a lot of guts to move a Federal agency in this direction with a
to-do list that's pretty substantial. I am very impressed, and
I realize that you're moving OPM into being one of the model
Federal agencies here in D.C.
So I appreciate it.
The Director has committed OPM to specific goals, with
target dates for each goal. The plan is a concise roadmap for
accountability. It's a vast improvement over OPM's old
strategic plan. To illustrate, let me contrast the previous
plan with the new plan by focusing on similar objectives with
regard to hiring. OPM's old strategic plan stated the following
objections with regard to hiring: ``increase the effectiveness
and efficiency of the Federal hiring process and make Federal
employment attractive to high quality applicants of diverse
backgrounds.'' This is not really very informative, and the
page of descriptive text that follows doesn't clarify the
statement. Again, it's very broad. Contrast the statement I
have just read with the example from OPM's new plan, decrease
hiring--pardon me, ``Decrease hiring decision timeframes to 45
days from the closing date of job announcement to date of offer
for 50 percent of hires by the end of fiscal year 2006, and
increasing by 10 percent per year thereafter to 90 percent in
2010.''
That's very concise, very specific, and that's something
we're not accustomed to, so I appreciate that.
And there are 170 of these specific goals in the plan.
Again, it takes a lot of courage to publish a plan like that in
Washington and I commend you, Director Springer, for your
efforts and hope that you can complete all of your goals on
time. However, I suspect some of these target dates may be
adjusted as the year goes on. But that's to be expected. I'm
willing to give you some room in recognition of the risk you
have taken to commit OPM to specific target dates.
But turning to the budget report, the President requests a
budget allotment of $256 million for OPM, an increase of $17.2
million for OPM's fiscal year 2006 post-recession budget
allocation. The requested $17.2 million increase consists of
$26.7 million for the new OPM initiatives, primarily OPM's
Retirement Systems Modernization Initiative, and $13.7 million
in offsets. OPM's budget allocation also includes $17.7 million
for OPM's Office of Inspector General.
I'm pleased that the President has allocated new funding to
move forward with the Retirement Systems Modernization
Initiative. Last year I signed a letter to you, Director,
expressing my experience about the reports of delays with the
finalization of retirement claims. As you indicated in your
response to that letter, the Retirement Systems Modernization
effort promises to bring needed improvements to the speed and
accuracy of retirement claims processing, and should greatly
improve OPM's customer service for Federal retirees.
I am concerned about some of the program reductions that
OPM is absorbing. Although the President's 2007 budget requests
a budget increase for OPM, primarily for retirement systems
modernization, I think we should consider the obvious question,
what is being cut?
The fine print of OPM's budget mentions that OPM will be
observing $13.7 million in program offsets. This may seem like
a tiny amount in budget terms, but when considering the
enormity of the Federal budget, it's all too easy to lose sight
of the impact. However, I think the potential offsets that OPM
may be forced to absorb are not insignificant. I would like to
have more information about where OPM plans to absorb these
reductions.
In this regard, I think it's important to realize the
Federal work force is facing an unprecedented period of change.
As noted, the Federal work force will experience a ``retirement
tsunami'' caused by the retirement of the Baby Boom generation.
The Federal Government must be able to recruit and retain
new employees in an increasingly competitive technologically
innovative environment. You must have sufficient funds and
resources to allow you to continue to provide human resources
and leadership in this environment.
I look forward to working with the congressional
appropriators to assure that OPM receives the funds it needs to
accomplish its mission. In addition, the budget allocation for
your Office of Inspector General is facing a $452,000 cut.
Again, this may seem like a tiny amount in budget terms. The
Inspector General, however, achieves an extraordinary return
with the funds he has available.
In 2005, the Inspector General reported that they recovered
approximately $122 million. This amount includes $54.6 million
recovered for the Federal Employees Health Benefits Plan from
the civil settlement of a case involving allegations of false
claims and kickback charges against a company that managed the
pharmacy benefit programs of several Federal Employees Health
Benefits plan carriers.
The Inspector General recovered these funds using an
operational budget of approximately $17.9 million after an
adjustment for certain expenses. That is a return on investment
of approximately $8 for each dollar budgeted. If that rate is
an indicator, a $452,000 cut means the Inspector General will
recover approximately $3.6 million less in fiscal year 2007
than he otherwise would have recovered.
Although the Inspector General is not here today to answer
questions, I think that amount deserves further consideration.
With that said, Director Springer, thank you again for
being here this morning. I look forward to our discussions. And
I'd like to recognize our ranking minority member, Mr. Danny
Davis. Thank you for being here.
[The prepared statement of Hon. Jon C. Porter follows:]
[GRAPHIC] [TIFF OMITTED] T7513.001
[GRAPHIC] [TIFF OMITTED] T7513.002
Mr. Davis of Illinois. Thank you very much, Mr. Chairman. I
want to thank you for holding this hearing today. It gives us
the opportunity to discuss the impacts of the fiscal year 2007
budget on Federal workers.
The proposed 2.2 percent pay raise is markedly lower than
the raises Congress has enacted for the past several years.
Federal pay raises have averaged more than 3 percent since
1999. Additionally, Section 836A in the appendix of the
President's budget proposes that, in addition to annual and
locality payments, the 2.2 percent pay raise should include
special pay rate. Federal white collar employees receive an
annual pay adjustment and the locality-based comparability
payment in January of each year. Under the administration's
plan, a special pay adjustment which would go only to employees
in hard-to-fill jobs or locations would be included in the pay
formula. Currently, Federal agencies must fund higher pay rates
for hard-to-fill jobs from the existing personnel budgets
rather than from the overall pay raise that Congress approves
each year. This action, if taken, would diminish the amount of
money available for annual and locality pay adjustments.
The President's budget also proposes $3.4 billion in
savings from the Federal Employees Health Benefits Program over
the next 10 years. The savings reflects a change in FEHB that
would allow the governmentwide fee-for-service plan offered by
Blue Cross/Blue Shield the ability to offer more than two
levels of benefits. One likely result of expanding the
governmentwide plan to allow for three levels of benefits is
that the governmentwide plan would include a high deductible
health plan that is coupled with tax advantaged health savings
accounts [HSAs]. And in 2005, the FEHBP began offering such
HDHP options in employee-organization sponsored plans and
comprehensive medical plans which are not governmentwide.
The Government Accountability Office [GAO], recently issued
a report evaluating the experience of the 14 FEHBP HDHPs in the
FEHBP. The reports find and suggest that Congress should
proceed with caution and not expand the use of HDHPs until the
impact of the Federal Employees Health Benefits Plan is better
understood.
Finally, the administration continues its call to grant all
agencies the personnel flexibilities received by the Department
of Homeland Security and the Department of Defense in 2002 and
2003 respectively. There are serious concerns regarding the
extension of these flexibilities throughout the Federal
Government. One of the main concerns regarding the extension of
these personnel flexibilities is that to date there is an
insufficient basis for assessing the effectiveness.
Personnel flexibilities granted to DHS and DOD are being
challenged in the courts, thereby delaying the implementation
and evaluation of these new systems. It is therefore impossible
for Congress to measure and to evaluate their impact on the
work force and to understand the cost associated with the
design, implementation and training related to these new
systems.
I have serious concerns about the administration's
recommendations and of course look forward to Director Springer
addressing them. Again, I thank you for having this hearing and
yield back the balance of my time.
[The prepared statement of Hon. Danny K. Davis follows:]
[GRAPHIC] [TIFF OMITTED] T7513.003
Mr. Porter. Thank you, Mr. Davis. I do have a question. You
handled all those acronyms quite well in one sentence. You did
really well. Thank you for your opening.
Congresswoman, do have you an opening statement this
morning?
Ms. Norton. I very much appreciate this hearing, Mr.
Chairman, and the collegial way in which you run this
subcommittee. And I want to welcome Director Springer. I'm
pleased to hear what she has to say today, and I feel for her
because I think she has come to the agency at a problematic
time; when many of the issues that are most troublesome were
decided before Ms. Springer even got there. It's her job to
somehow take these issues and grapple with them and make them
work, and some of them present huge challenges that would be
very difficult to deal with.
I do want to say a word on the pay raise. Pay raise has
been consistently controversial in Congress. Every time it
equalizes the pay between the civilian and the military work
force, there are very good reasons; particularly after
September 11th, the distinction is very much without a
difference. So this time, everybody's pay raise is less than it
should be. There's a saying, I'm sorry to have taken all of you
all down with us, but it looks like we took the military down
with us.
Since the administration got the message that Congress is
not going to abide a disparity in pay between people who all
serve the Federal Government, so everybody is supposed to take
less than they are due. Let's see how the appropriators deal
with that one.
For this committee, Ms. Springer's tenure thrusts her in
the middle of a set of huge experiments that one might have
expected to be done dose by dose, and already many of the
issues that the committee pointed out have surfaced the last
place the Federal Government wants them to surface, and that is
in the courts. Entire sections of the very controversial
personnel and pay changes are now being held up in the court.
Collective bargaining, personnel flexibilities.
The one thing that would seem to be wise would be for the
Federal Government not to extend these major changes in the
Civil Service system until they have had an opportunity to see
whether they are workable at all. Not whether they work but
whether they are workable at all.
Already, more than half the work force is involved because
we have the Homeland Security Department, and we have the
Department of Defense. That's a very big experiment. So one
wants to figure out what works and what doesn't. It's not as if
one has a small cohort and we're ready to go further. In fact,
on the contrary. What we have is more than half the work force
being subjected to personnel changes, personnel and pay changes
of a kind that have not taken place in 100 years, and they're
in the courts now. Some of them are so bereft of due process
that I predict that they'll be in the courts for some time.
The administration forgot one cardinal principle, that is
the difference between a private work force and a government
work force, and yes, I'm sad to say, perhaps, although, I think
there is a very good reason for it, that due process does
attach to certain parts of government employment that would not
be the case if one worked for Google. And in many ways, these
reforms were treated as if, in fact, everybody in the Defense
Department, from the worker who perhaps is least important to
the mission of the Department all the way to the very top,
should be treated in the same way, with the same personnel and
pay flexibilities, with collective bargaining thrown overboard
so that there was no way in any real sense to protect a worker,
at least if we are to understand the decisions of the courts
thus far.
The committee was one that, after September 11th, there
needed to be changes in certain parts of the personnel system
and with respect to certain personnel of the Federal
Government. This is a moment, it seems to me, particularly
since the matter has wound up in court, for us to look very
seriously at what has happened and for OPM to think very
seriously before proceeding on any next steps.
Finally, Mr. Chairman, here we go again with health benefit
plans proposed to be extended. There have been some experiments
here, and experiments that confirm the obvious, that the people
who take advantage of these plans are young, healthy and high
paid. And I say to you, Madam Director, that is not a
characterization of the Federal work force. It is what, almost
3 million person work force, and no one would say that it was
like a high tech work force, young folks who might in the high
tech parts of Virginia want to take advantage of such a change,
so that in looking at a health benefits plan, we are obligated
to look at the entire work force, and I must say that what the
GAO tells us so far is that it would be--what the GAO has had
to tell us thus far seems to indicate that we would move at our
own peril to spread, or should I say at the peril of Federal
employees, to spread health benefit accounts through this kind
of a work force.
It is a work force where people are given pensions and
benefits designed to keep them on the job for long periods of
time. That's another difference between the Federal work force
and other work forces. The Federal Government isn't doing such
a good job at that today. Not only are we not able to recruit
people; we train people and we find that, particularly with the
contracting sector right out there ready to pay them more, they
are gone. This puts the Federal Government, particularly with
its missions, its multiple missions after September 11th, not
to mention its usual missions, at a point when it should be
rethinking personnel policy, trying to reinforce what personnel
it has, particularly as the Baby Boom generation opts very
often not even to wait for retirement but to go with early
retirement and then to go someplace else and make money in the
private sector.
It is an issue that got the attention of this committee
that is so serious, that this committee in this very room
before Ms. Springer came had a joint committee of the House and
the Senate, so concerned are we that there are no natural
reasons for people to come to the Federal work force as there
were before.
In many ways, we need these people, particularly people in
certain categories, more than ever, and the Federal Government
is not taking--making steps that would encourage people not
only to come but to stay. So I have very serious personnel
concerns, some of them above your pay grade, but certainly, Ms.
Springer, some of them within your purview, and I very much
look forward to hearing your testimony today.
Mr. Porter. Thank you very much.
Mr. Van Hollen, do you have anything you'd like to add this
morning?
Mr. Van Hollen. Thank you, Mr. Chairman. Looking forward to
the testimony.
Mr. Porter. We need to take care of some procedural
matters. I ask unanimous consent that all Members have 5
legislative days to submit written statements and questions for
the hearing record. Any answers to written questions provided
by the witness will also be included in the record. Without
objection, so ordered.
I'll also ask unanimous consent that all exhibits,
documents, other materials referred to by Members and witnesses
may be included in the hearing record, that all Members be
permitted to revise and extend their remarks. Without
objection, so ordered.
It's also the practice of the subcommittee to administer
the oath to all witnesses. I'd ask that you now stand.
[Witness sworn].
Mr. Porter. Let the record reflect the witness has answered
in the affirmative.
Our first panel today, and our only panel here, we'll hear
from Director Linda Springer, the Director of the Office of
Personnel Management. She has been with us before and it's
always a privilege to have you here, and we appreciate it very
much. Ms. Springer, if you'd like to proceed with your opening
comments.
STATEMENT OF LINDA M. SPRINGER, DIRECTOR, OFFICE OF PERSONNEL
MANAGEMENT
Ms. Springer. Thank you, Mr. Chairman. What I'd like to do
is make my comments with the aid of some charts and we'll
provide copies of those charts to the members. I would ask that
the full text of my written statement and the attachments be
submitted for the record.
The first chart is actually just the cover of the plan, but
by way of openers, I'd just like to say that as you mentioned
earlier, Mr. Chairman, this is a different plan. It has 170
actual to-dos. We have given complete visibility into the
operations of OPM, what we intend to do over the course of this
plan period, and each of those to-dos has a due date, which
makes it very unique. The whole world can see what we're trying
to do, when we expect to have it done, and they can hold us
accountable.
This is accountability taken to a degree that I think is
rare, certainly in the Federal Government. So we are very proud
of this plan. And the starting point for it obviously was to
redefine our mission statement.
If you'll see on the next chart, essentially our job is to
ensure that----
Mr. Porter. Excuse me, Director. Traditionally we hold
testimony to 5 minutes, but please, know if you need extra
time.
Ms. Springer. Thank you, sir. Appreciate that.
The mission is to ensure that the Federal Government has an
effective civilian work force. That is OPM's job. It's a big
job. We have nearly 2 million men and women in the Federal work
force. Most of those are outside of Washington, DC. So it's a
worldwide effort, and it stems from the front end with
background investigations, all the way through the retirement
administration process. So if OPM does its job well, every
other agency will be able to serve the American people better
for it.
Now we have developed this plan at the same time that we
were developing our 2007 budget. So there's great consistency
and harmony between the two. This next chart shows the budget
priorities that were presented in the congressional budget
justification, and there are 11 of them, and they're all very
important to us, and it's exactly the same, and we took this
right out of the CBJ.
Each of those has to-dos in this plan; 53 of the 170 are
lined up with these 11 priorities that we presented in the
budget. And in the attachment to my statement is a page for
each of these 11 with some very specific to-dos, and, as I
said, with due dates for each of them. So you can take a look
at those, and you'll get an idea as to how we're going to make
these things happen.
There are some highlights I want to give you here. On the
retirement benefits administration, there are 2 million people,
over 2 million people now covered by our retirement
administration process. That includes members of the
legislative branch, includes all of you when you get to the
point of needing a retirement calculation. So we have a strong
common bond in making sure OPM does a good job.
When it comes to health benefits, we have in the
neighborhood of 8 million people covered by the FEHBP. That
includes present and former employees and dependents. When it
comes to things like the FEHBP, we're looking at ways to deal
with health information technology. I know, Mr. Chairman,
that's an important effort which we are grateful for your
interest in that and looking forward to the hearing on that,
but we're very involved there and share your interest in it.
Attracting employees for the future. That is a very, very
important part of making sure that we continue to have an
effective civilian work force in the future. Appendix E of our
plan deals with a concept and an approach to that called career
patterns. Again, I would direct your attention to that.
In addition to all those things, we want to make sure OPM's
management makes it a model of performance across the Federal
Government. So those budget priorities again are really where
our focus will be not just in 2007, but beyond.
On the next chart, you will see a snapshot again consistent
with what we've already given you in our CBJ of our 2007
appropriations request. I know the print is small, and there is
a copy of this, I believe, in the material that you have
received.
Just to highlight it, the total request is for just short
of $37 billion; 99 percent of that is for trust funds. It's
mandatory. So it's only about 1 percent of what we request that
is actually discretionary and is used to run the operation of
OPM. That discretionary portion shows an increase this year of
roughly $17 billion. $17 million. That's the net of a $27
million increase for a new retirement modernization project,
which I'll explain in a minute, offset by a decrease of roughly
10 million.
That difference, that decrease, that offset, a portion of
it is related to staffing. We're going to be running with 26
less people. Doesn't sound like a lot in the Federal
Government, but that amounts to several million dollars. We're
going to be holding back and delaying some other systems
enhancements. We're going to be cutting back on some contractor
support. And those are the three main areas that will allow us
to cut back and to fund a portion in effect of that retirement
modernization project.
So this year, we're showing an increase of roughly $17
million in that small 1 percent of the total of our budget
request for 2007.
I'd like to go to the next page, the next chart, and talk a
minute about this retirement systems modernization project.
Again, the reason why I'm zeroing in on this is twofold. One,
it's the one area where we've asked for more money in 2007, and
the second thing is, everybody in this room who works for the
Federal Government cares about this if we're going to retire
some day, or at least have a--leave with a vested retirement
benefit.
OPM does this process manually today. We take too long. We
got a letter from many of you late last year, signed by nine
members, many of whom are present today, saying that we've got
to do a better job. We can't have delays of 90 days; we can't
be putting out benefits for 2, 3, 4 months until the
calculation is final with benefits that have a hair cut of 15,
20, 35 percent until we get all the information to do our
calculation.
Part of that is a function of getting information from the
agencies. Part of it is a function of the fact we're doing
these calculations manually. You see this drawer over here. I'm
doing a little show-and-tell here, and I hope I don't abuse my
opportunity, but this is a sample of what our people have to
work with.
We have 28,000 file cabinets; five drawers in each cabinet;
144,000 of these drawers, packed, that our people have to go
through to get personnel records when someone retires and then
do a calculation manually. It is a shameful way of doing this.
If we took all the drawers for our retirement office and
put them end to end, starting in this room, we could go all the
way to Baltimore and come back again and not run out of
drawers. That's how bad it is.
Mr. Porter. Excuse me, Director. That would be just Ron
Martinson's file, right?
Ms. Springer. Some files are bigger than others.
And looking ahead to the increased number of people that
are going to be retiring, this is not a sustainable situation.
So we're doing two things: In the short run, we've asked for
some money in this budget, a little bit, about a million plus
to bring back some people who are experienced. We're working on
some process refinements so we have the more experienced people
doing the more complicated retirement calculations, the easier
ones with the newer people. We're working with agencies on a
pilot to make sure that they can get us information maybe even
before someone retires so we can get a head start.
Those are all just bandaids until we can get this new
system. This year, we're asking for about $27 million. That's
this year's installment. OPM had made an attempt in the past to
try and come up with a new system. They tried to build one from
scratch. It didn't work. There was some money left after. We
put it in the bank, in effect. We were able to use that, plus
this, plus some other money that we think we will be able to
get a good start on getting this system in place. We hope by
2009 that we can have the new system up and running.
In the meantime, we have been making some progress through
some of the basic process improvements in getting that wait
time down to getting a final accurate payment. But the ultimate
answer, that is, we've got to have this new system. We can't
keep using this file system that we have today. It's just not
going to work.
Now let's go to the next chart, if you can. The question
is, it's great to have a plan, all these to-dos, visibility,
but it doesn't mean anything if you can't get these things
done. We believe the American people and all of you expect us
to get things done.
So the question is, how do we do that? One of the things--
we have it in a chart, and we've given you a copy--is that we
have put together a chronological list. Now this is the 2007
page, but I have this starting from this month right on forward
through the whole 5 years of this plan, is a chart that
essentially says, for each month, here's what we've got to get
done; next to that, not in your copy but in my copy, who at OPM
is responsible; and next to that is a column that says the date
that it was completed.
And this is my score card to make sure that everything gets
done, everyone knows what they need to get done, so it takes
this plan and puts it onto a tracking sheet. Now beyond that,
each member of the SES at OPM has these goals in their
performance contract. That means that every executive at OPM
has their pay on the line for getting these things done.
We can do that in the SES. We can't do that through the
rest of the organization, as you know, but we can do it in the
SES. That means executive comp at OPM is tied to achieving the
goals in this plan. So that is accountability.
I have reviewed this with Comptroller General Walker, he
said it's really pretty impressive to go from a plan to a
tracking sheet to how people are actually paid in their SES
performance contracts.
Beyond that, it's not just a stick issue; there's a carrot
to this. We're going to reward people. We're going to
congratulate them. We have all kinds of ideas to keep the
momentum going as we achieve these goals.
There's also obviously public pressure because people have
this plan; it's visible. No one likes to be embarrassed. I
certainly don't, and neither do the people in OPM. So they're
excited about getting these goals done and showing that this
kind of system can work.
Just two more quick charts. That's the second half of 2007.
We couldn't get it all in 1 year; there are so many goals.
Next to the last chart shows two areas that I want to
highlight for you that relate to legislative proposals that are
in the President's budget. One is, there's a fix in there that
we hope you will take up that relates to a penalty in effect
for people who want to stay on in their government job on a
part-time basis after they've retired. We have many people, and
I go around the country; I have been to a dozen cities, talked
to the Federal executive boards. People don't want to go from
working full-time to no time, in many cases. They'd like to
stay with the Federal Government. We'd like to get the benefit
of their knowledge and that knowledge transfer. But they can't
do it if they're in the CSRS without a penalty to their
pension. That's a bad answer.
So there is in the President's budget a fix for that. We
hope that you will be able to take that up and pass that.
The second thing is that we are looking to expand health
care options. I understand that there's some concern about
that, but we believe that the Blue--first of all, half the
people are under the Blue Cross/Blue Shield system, and so we
believe that those people deserve the same choices that other
people in the private sector have, and the Blues offer these
type of arrangements in the private sector.
We believe people in the Blues who really want to stay with
Blue Cross and Blue Shield as they have for decades deserve to
have that option. So we are looking to expand to have that
third option.
So I just want to finish up by saying as it says on this
last chart, we view this as a partnership. This is the largest
font size I could find to fit on the chart.
But we believe that our success is tied to the partnership
that we have with you. We can only accomplish the things that
are in this plan if we get the funding for them. We believe
that it is a tight budget year. It will be a challenge for us,
but we believe that the amount that is in the President's
budget will allow us to do the things that are under this plan.
We think they're the right things to do, and we believe that we
can get that done.
So, again, we look at it as a partnership, and we're glad
to have the opportunity, certainly I am, to visit with you
today, and we'll make ourselves available in the future as
well.
Thank you, Mr. Chairman.
[The prepared statement of Ms. Springer follows:]
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Mr. Porter. Thank you very much. Before I get into the
question-and-answer period, Mr. Cummings, would you like any
opening comments today?
Mr. Cummings. No, Mr. Chairman.
Mr. Porter. Thank you. Very impressive. I appreciate that
you have set some pretty major goals, and you're putting not
only yourself but your employees in a position where
performance is going to have to happen, and I appreciate your
goals.
I'd like to go back to the 28,000 file cabinets. As an
example, you mentioned having to search out information for
retirees. How does that work today? Literally their file can be
in multiple places? How does it work today?
Ms. Springer. The starting point is the request that comes
into OPM from the agency where the individual is retiring from.
Now that person may have worked at three or four other
different agencies and there may be a paper trail that follows
them around. We have some of the records, but there's other
information we need to get from that final agency, and so until
we get all of that information, then we can't really start the
process.
For the month of February, which is the last complete month
I have, we have about 11,000 or 12,000 cases where someone has
requested a retirement calculation, but we're still waiting on
an average of 30 days for agencies to complete the information
that we need. So we can't even start our part of it until we
get that. But there's paper information that we have, paper
information from the agency.
Mr. Porter. The Blue Cross/Blue Shield, of course, has been
increasing substantially over the past 10, 15 years. Is it 50
percent now?
Ms. Springer. That's right.
Mr. Porter. Do you see that as a problem with one major
carrier that's the bulk of the enrollees?
Ms. Springer. I don't see it as a problem, no. I think that
certainly if you were talking about 80, 90 percent, you would
have to view that more of a monopoly situation. I don't believe
that the Blue Cross/Blue Shield system even approaches that. In
fact, it's made of, as you know, of local Blue organizations so
it really isn't like it's just one organization in the way we
traditionally think of it. So, no, I don't find that to be a
problem.
Mr. Porter. Again, I think there is a lot of pleased
participants. I just wanted to have your perspective.
Ms. Springer. There are choices throughout the country so
it's not as if that's the only choice that's offered.
Mr. Porter. The health benefit plan does a good job in
competing or providing for competition to keep the premiums low
and the cost low for our employees. Are you able to do that
soon with the dental and vision plans, where we can maybe have
some competition?
Ms. Springer. We do hope to do that. We've had a request
out obviously for some time for people to--or for organizations
to apply throughout the country. We're looking to regional
carriers as well as national carriers. We will be introducing
the coverage in the next open season, which will be in the
latter part of calendar 2006. Under the law, we had to get that
done by the end of 2006.
We believe there will be choice, and choice is what leads
to--and competition leads to cost containment. So that's an
important factor.
Mr. Porter. This global economy also has global challenges,
and one of those is, as our work force, of course, is aging in
certain areas, a key component of retirement today in this
economy is long-term care. It's a huge challenge for our
retirees.
Can you address plans for long-term care and those
provisions for employees as options?
Ms. Springer. There's no question that long-term care is
important. I think it's going to become increasingly important.
We have the aging of the population generally, in addition to
the Federal work force population and our own dependence. We
believe we have a good program. The carriers that we partner
with on that, John Hancock and, I believe, Met Life are leading
carriers in this. They have been in the forefront of this for
many years.
So we believe we're doing our due diligence with respect to
providing strong plans and strong options to the Federal work
force. I believe we have more people in the Federal work force
plans than in any other--compared to any other employer in the
country. So people are, while it's not large, it's growing, and
we've gotten good response to it. It's something we're going to
have to continue. It's very, very important.
Mr. Porter. Do you think there is any way we can find
additional incentives to help our employees to invest in a
long-term plan. Are there some other things to help. I mention
that because I see this as a critical part of retirement. If
there's anything else we can do to get incentives to have the
employees sign up.
Ms. Springer. It's an area that we need to continue to look
at, I agree with you. It's got such--in addition to the
individual level, the economic value of having long-term care
provisions in place is just going to become more and more
important.
Mr. Porter. I'd like to, not necessarily today but in the
near future, chat with you or someone with your staff and see
what else we can do to help encourage incentives to keep the
costs reasonable. Again, I think it's a priority for us.
Ms. Springer. Glad to do that.
Mr. Porter. Mr. Davis.
Mr. Davis of Illinois. Thank you very much, Mr. Chairman.
Madam Secretary, this is actually one of the most
comprehensive and most clearly delineated management tools that
I have seen, and I want to commend you and the agency for
having developed it.
Since there was no mention in your fiscal year 2007 budget,
I'm assuming that OPM does not intend to apply to the Centers
for Medicare and Medicaid services for the $1 billion a year
employer subsidy your agency is entitled to under the Medicare
Modernization Act, since Federal annuitants receive drug
coverage through the FEHBP that is at least equal to the new
Medicare part D benefit.
I also understand that you have said that the agency did
not need to take advantage of the subsidy since you did not
intend to significantly change the drug coverage Federal
annuitants age 65 or older receive through that Federal
Employees Health Benefits Program plan for the 2006 contract
year. Why should OPM opt out since the Medicare law does not
require CMS to determine if employers applying for the subsidy
would have retained their retiree drug coverage with or without
the payment?
And, finally, I have heard that OPM has said that you do
not believe it is appropriate for the Federal Government to be
paying itself for this purpose. As you know, payments to OPM,
unlike other employers, would not result in new spending on the
Federal budget rules since they would not be spent outside the
government. Furthermore, such inter-governmental transfers are
not unusual. In fact, the Federal Government pays itself for
the future retirement obligations when Federal agencies make
contributions to their own budget retirement trust on behalf of
their employees.
If the government regularly pays itself for other purposes,
why not apply for this subsidy and use it to help mitigate
costs in the Federal Employees Health Benefits Program?
Ms. Springer. The way OPM views it is that there's a
principle involved with respect to that subsidy that we believe
doesn't apply here, and that is that we believe that subsidy
was intended to ensure that plans who might otherwise start to
draw back from what they would offer their employees would get
that to help preserve the level of benefits that they were
being offered. As you say, we have no intention of drawing back
from that.
Now one could say that, why not still take advantage of it?
And in that case, we view it that it would be taking out of one
part of the government as you say and giving it to another. The
FEHB plan is heavily subsidized already from the employee
standpoint and so, again, both from the standpoint of the cost
to the employee and to the member, as well as to the
preservation of our benefit offerings, we just didn't feel that
it met that test and so we did not elect to take advantage of
it.
I know that there are some people who might say even with
the subsidy that you have, and even though you're not planning
any cutbacks, you should still take it. If we were to do that,
as you say, from an overall Federal Government standpoint, it
would be neutral because it would be taking from one part to
another. So we haven't elected to do it, and we followed the
principle that's being applied that we think when that was
designed in the first place.
Mr. Davis of Illinois. Are you suggesting the annuitants
would be well covered without it, that there is really not the
absolute need?
Ms. Springer. I don't believe there is an absolute need,
no.
Mr. Davis of Illinois. You also mentioned that, in the
future, we can look forward to getting rid of the part-time
penalty. Would you elaborate a bit on that?
Ms. Springer. I'm sorry, could you repeat that?
Mr. Davis of Illinois. The penalty that----
Ms. Springer. In the CSRS, yes. Currently, if I retire from
the Federal Government and if I were in the CSRS, which is the
plan in effect for employees hired before 1984, if I wanted to
elect to stay on on a part-time basis, the high three benefit
calculation or high three compensation salary calculation that
leads to my benefit would be adversely affected by that part-
time service, the way it's treated. So that would bring down
the benefit that I would ultimately get when I fully retired.
So that is driving people away from part-time service if
they were covered by the CSRS. So this fix makes an adjustment
to how part-time service is counted.
Mr. Davis of Illinois. Thank you very much.
Thank you, Mr. Chairman.
Mr. Porter. Not a question, but it's a problem Nationwide
where we have a work force, I know the public employees in
Nevada are penalized if they come back in the system, and there
are so many folks out there that are talented and would like to
remain part of the work force and provide so much information
and talent. I think it's great. We have to make sure that we
continue not only in the Federal program but other programs so
there's an incentive.
Congresswoman, do you have any questions?
Ms. Norton. Thank you, Mr. Chairman.
I want to commend you as well, Ms. Springer, on laying out
your objectives. I ran a very troubled agency; when I came, it
was troubled, and we put in place management by objective and
held to it, and it really is the only way to kind of monitor
yourself.
Some of what you're monitoring looks like it may be out of
your control. Let me ask you the status of the appeal from the
district court decision almost a year ago that threw out the
collective bargaining regulations in the Department of Homeland
Security system.
Ms. Springer. Well, let me go back to how we deal with
those things in our plan. There are a couple of references in
the plan to personnel reform, and one specifically is DHS and
to the DOD. We are monitoring those, we're holding ourselves
accountable for monitoring the results to the extent that they
move forward. We are looking to, and there is specific language
in here to build the case for personnel reform, further reform.
Now the parts that have been most contentious of the two
existing relate predominantly to the labor management sections,
as you know.
Ms. Norton. You have two cases; you have two cases that--
one has thrown out the DOD's new personnel regulations, and of
course, these were the two agencies that were before the
committee and where the changes were going on. And then another
involving, yes, collective bargaining. That was a wholesale
throwing out of the entire set of regulations.
Ms. Springer. Yes. So with respect to those, and I can't
comment actually on where we are with respect to appeals and
things like that.
Ms. Norton. Wait a minute, I'm not asking--as I understood
it, the government--you can comment, seems to me, on the status
of the case. Has the Government appealed the collective
bargaining case to a higher court as yet?
Ms. Springer. Not in DOD.
Ms. Norton. I'm sorry?
Ms. Springer. Not in the Department of Defense, I'm told.
That appeal to a higher court has not occurred in the
Department of Defense case.
Ms. Norton. All right. The Department of Defense case
involved personnel regulations. If you haven't appealed, the
time for appeal--that involved something where the
regulations--Mr. Chairman, you may remember, we had this very
complicated hearing where somebody in an effort to deal with
the appeals processes wanted to put everything together. It was
extremely complicated. One of them was labor relations. The
labor relations sections, the appeal sections. DOD regulations
and all of the collective bargaining of Homeland Security
regulations have now been thrown out by district court. The
labor relations ones were a total disgrace. They simply
collapsed everything into the chairman of the commission. It
didn't have a ghost of a chance of surviving. But all of that
was predictable.
The reason I ask these questions is, if we're going to get
regulations and then everything is going to be on hold for
years because you're in court, it doesn't make much sense to
issue such regulations. So what I want to know is both of these
cases are old; one, August 2005, the other, I don't have the
date in which it was decided. All I want to know is, is the
department appealing these cases or is it going back to the
drawing boards to try to in fact conform to the court
decisions?
Ms. Springer. Let me answer that with two pieces. One is
that, in the case of DOD, while an appeal has not been filed
yet, it's being considered.
Ms. Norton. You mean, the time for appeal hasn't----
Ms. Springer. That's a more recent one. There's a little
bit more time for the DOD one. The DHS one has been appealed, I
believe. And there are some oral arguments next week. The
lawyers handle that.
Ms. Norton. So, what, the present collective bargaining is
in place, or we're on hold?
Ms. Springer. The present one is continuing in place. But,
if I may, we had a hearing with this committee a few months ago
where we talked about the future of personnel reform, and given
what was going on with DOD and DHS, did that bear on our
thinking for the future? One of the things that I remember
having discussion when the comptroller general was here and his
recommendation was to focus on the personnel, the pay parts,
rather than on the labor management parts. And so I think that
was something that several of you had thought might be
fruitful, and so in accordance with this plan, as well as that
hearing, that's an avenue that we're looking at as well.
We are continuing to work with the existing DOD and DHS as
those go through the courts, but we're continuing to review and
build the case and see how we can make the business case,
particularly with respect to the pay portion. And what I'm
finding as a validation for that type of thing is how that's
helping me to get our things done, our plan done, because in
the SES, at least I can tie the actual goals to compensation.
Ms. Norton. I'm very pleased that you're working on the pay
parts. Perhaps--I can think of nothing more controversial that
I have ever heard in the committee than the notion that there
would be pay for performance but there were no regulations
describing how an employee would be notified in writing what
was expected of the employee whose pay would be conditioned on
performance.
I have to ask you, particularly since you say you're
working, and I'm very pleased to hear that, on the pay parts of
the reform; are you working on that particular threshold notion
of notice to the employee in writing on how the employee is to
be evaluated and pay is to be therefore conditioned?
Ms. Springer. The answer to that is, yes, and that's
nothing new. That has actually been in our proposal. I feel
very strongly if someone won't put it in writing what they
expect of you, then you should question why you're working for
that person.
Ms. Norton. There was a huge defense given, and I don't
know who it was, about why this wasn't necessary, and it took a
lot of time of the committee.
Ms. Springer. That is in the version that we put out last
summer, that the requirements should be in writing, that they
need to be in writing. So, yes, that is important. I agree with
you.
Ms. Norton. Thank you very much.
Now let me ask a question about whether you intend--you
say, on page 8, implementation of Civil Service reform across
the Federal Government monitoring report on demonstration
projects at agencies. We know there are all kinds of
demonstration projects going on. My question is, do you intend
to implement the reforms or the changes that were passed for
DOD and for Department of Homeland Security anywhere else in
the Federal Government at this time?
Ms. Springer. There is no proposal right now like the DOD
or DHS proposal, other than the kind of straw man, if you will,
that we put out as a discussion piece last summer.
Ms. Norton. There's a great deal of anxiety in the Federal
work force about that. As I said in my opening statement, you
really do have a huge number of employees to figure this out
with, and it does seem that since you have the majority of the
work force already, that ought to be enough for now, and then
if there is to be implementation, if you can show that this
works, you would have shown it because you have most of the
people to show it on.
What is the average age of the Federal work force?
Ms. Springer. I believe it is in the mid 40's.
Ms. Norton. I ask that question because I want to know why
you think that a work force of that age would--sorry, whether
the FEHPB, which has seen rising premiums, to much of our
consternation and yours, for years, would benefit if in fact
large sections of the work force, young and highly paid, were
to opt for these health benefit plans, and what condition do
you think that would leave the health benefit--the FEHBP in?
Ms. Springer. First of all, with respect to the work force
population, it's a little bit of a barbell population, if you
will. We have a lot of people in the upper age group and we
have been trying to bring people in at the younger age group.
I'd like to have people at every age group come to the Federal
Government.
Ms. Norton. You got what you got.
Ms. Springer. But we have a little bit of a barbell now.
Ms. Norton. What?
Ms. Springer. A barbell effect, where we've got a lot at
the upper end, fair amount at the younger end, not quite as
much in the middle. I believe that choice is good, and limiting
choice is usually not good. Now when you have as we have right
now in the Federal Government only a few options for that one
type of the high deductible, it's only in a very few plans,
then you can't really give a fair assessment in my opinion of
what the response will be and who will respond to it.
We have somewhere around 7,000 to 14,000 I believe people
who have responded. That's a very small portion of a plan that
covers 8 million people. So to draw conclusions just on that
small sample, I think is a little bit premature.
Ms. Norton. Although we do know that they're young and
among the highest paid.
Ms. Springer. That's true, but the fact is that most of the
people who might be interested from those other age groups are
covered by Blue Cross and Blue Shield.
Ms. Norton. If what you want to do, if your answer to me
then is, premiums won't go up, and choice is what we're after,
then you need some kind of control group. And are you trying to
get that. Because so far that's not what you have.
Ms. Springer. I'm not saying the premiums will go up.
Ms. Norton. Do you think premiums would not go up if
substantial numbers of young and highly paid parts of the
Federal work force were to opt for health benefit plans. Do you
not believe that the premiums for everybody else would in fact
go up?
Ms. Springer. I don't know. I don't know for sure what that
would do. It would depend on who it was and----
Ms. Norton. I have just said who it was.
Ms. Springer. I understand who it was. That's not
necessarily the case. There are different things that drive
that, whether it's prescription drug use or whatever the
procedures are and the cost of those procedures. We care about
costs. As a matter of fact, our people negotiated a $700
million lower overall premium cost in the 2006 FEHB as a result
of some pretty tough negotiations. So we're interested in cost,
but I also believe choice is important. That's a state-of-the-
art choice. And for us to not offer that in our largest plans,
I think is doing disservice to many people in the Federal work
force.
Ms. Norton. Mr. Chairman, I don't have another question.
I'd just like to ask Ms. Springer, and I appreciate your
answers to these questions, I'd like to ask you if perhaps you
and I could have a conversation concerning a bill that the
chairman of the full committee and I have introduced involving
what we can only believe is an oversight and another one of
those things that came long before you came, and that was in
1997.
That was in 1997 when the Federal Government took over some
District of Columbia functions, and those functions mostly had
to do with the criminal justice system. Included were some
court employees who were--because the court system, they took
over the courts. They didn't take over the implementation of
that system. Included were some court employees. These
employees lost all the time they had put in as public
employees; and, of course, they lost their annuity.
The bill that the chairman and I--Chairman Tom Davis and I
had put in has nothing to do with the annuity and nothing to do
with the Federal work force in general, although these are
Federal employees for purposes of pay. In order--and it was
done to relieve the District government of great State costs
that only the District carried. It really does not involve the
Federal work force as such in any case. The chairman's bill
that I co-sponsor only would allow employees to retain their
time in service so that, for example, if you retired--if you
get to retirement age, you can retire.
We have employees, for example, who are close to retirement
age. Now they have to start all over again, so they have lost
their time.
I don't think that OPM has anything to gain or--but there
was somebody in your Human Resources Department that apparently
there were negotiations with at the State level over a long
period of time, and those negotiations failed, and the chairman
and I have introduced a bill. I would like to be able to have a
conversation with you, rather than send my staff to talk to the
Human Resources staff who could not see that the Federal
Government had nothing to lose by letting these employees who
work for the D.C. Superior Court retire on retirement age. We
have people 60 years old who have been told, well, you have to
work 12 more years because you got transferred to the Federal
Government, and I'm just wondering if you would be willing to
sit down with us.
Ms. Springer. I would. I would be glad to do that.
Mr. Porter. Chairman Davis.
Chairman Tom Davis. Thank you. Good to see you.
In 2004, as you know, Congress enacted legislation creating
a new dental-vision benefit. Proposals have been submitted, and
award is scheduled for late May. I think one of our intentions
at that point was that an option be available to Federal
employees to include a low-cost option such as a dental HMO. Is
that coming, do you think?
Ms. Springer. I will check and get back to you on that, Mr.
Chairman.
Chairman Tom Davis. I think that is very, very important,
as they compete with their dollars for what they are going to
do, to have some benefit there in the low-cost range.
Telecommuting, this is an area where the Federal Government
continues to lag far behind the private sector. I go out to
some of the leading technology companies in the world out in
northern Virginia, and their workers are able to telecommute
from their homes, from any kind of equipment they have,
wherever they are in the globe. They are not required to be
there and punch a clock from 9 to 5, and they are some of the
most productive workers in the world. And yet, at the Federal
level, we see ourselves floundering at this.
Being a Federal employee is different than it was 100 years
ago when the Civil Service rules were written. When are we
going to get with the program and what do we have to do up here
to spur agencies on to allow some of their sophisticated
employees to telecommute? Not only will this help the traffic
in the region, it is a lifestyle issue, but it's a recruitment
and retention issue. Some of my staff--my staff director was
telecommuting for 3 months after her child was born and was
just as effective. I wanted to keep her here. I think we are
losing good people sometimes because we don't show this kind of
flexibility.
Ms. Springer. Well, I couldn't agree with you more. We do
need to do it. It is proven that it works. We, I think, are
doing a good job of convincing managers that it does work.
There was, obviously, a natural reticence to it. If you
didn't see people in the office, there were people that felt
that they didn't have control or accountability. That's
changing. So that's the first step. But we need to go beyond
that. We need to make sure that agencies are including that in
their recruiting options.
As you know, in this particular plan one of the career
patterns that we are establishing is for remote employees. So
if someone wants to get up at 4 a.m., and work from their home
for the Federal Government, that's fine. We want that person.
Not only should we say, well, we can accommodate that, we
should go out and look for that person if they are going to be
a good worker for the Federal Government. And that involves
telecommuting.
And I would go further to say that it's even more and more
a requirement as we plan for the potentiality of possible
pandemics or other types of events where maybe there might be a
period of time where people do have to work from a remote
location. So I would say there is even more of an urgency today
than we've had in the past to make telework an important
component of our employment structure.
Chairman Tom Davis. I agree with that, and I just think we
are missing the boat in so many ways. We recently changed the
law so that Federal contractors are allowed to charge the
government for time their workers are telecommuting. They don't
have to be in the office 9 to 5 to do that. And you find some
of the most productive workers. When you are home, the phones
aren't ringing around you. If you have to leave in the middle
of the day for a doctor's appointment or your kid's school play
or something like that, it's a lot easier. You can be more
productive. It can be abused, and I recognize that as well. But
we have to be able to work out some guidelines to enable these
agencies to allow their employees more opportunities to
telecommute. I think it will lead to more productivity if it's
done right.
Ms. Springer. I agree with you.
Chairman Tom Davis. The Federal Government is notoriously
slow and inefficient in its hiring. We have to have a better
hiring process. Can you explain how you plan to reduce the time
required to hire an employee down to 45 days or less?
Ms. Springer. Well, we've had an ongoing effort with that.
We are monitoring how well we're doing, and it's been uneven.
One of the pieces to that is not just that you get to the point
of processing and arriving at a decision but to let people know
what the decision is. We have hundreds of thousands of people
who apply for the jobs. Let's say 1,000 people apply for a
given job, and 1 person's accepted. We don't get back to the
999. So that hurts our reputation for anyone who might want to
apply a second time or a third time for another job.
So one of the things that's in this plan is a requirement
that agencies will notify all applicants of decisions at the
end of that 45-day period. That's a requirement.
We are also asking and putting into place for managers and
applicants to fill out a very brief 10 or 12 question survey on
how the process went. What can we learn? Did managers get
everything they needed to make that decision quickly? Did
applicants get everything they needed, or were we easy to deal
with?
We are also trying to get more and more of our positions
that are available up on USAJOBS. USAJOBS is a good tool, but
it's not used to the fullest extent yet by all agencies. So
we've got a goal in here to have their position requirements
conform to the USAJOBS structure so that it can get put up on
there and have broader access. That will allow for a more
timely process for going through the whole application and
decision.
So those are some of the steps in addition to what we are
already doing.
Chairman Tom Davis. Thank you very much.
Mr. Porter. Thank you.
Mr. Cummings.
Mr. Cummings. Thank you very much, Mr. Chairman.
Director Springer, just a few questions. Right now, if we
were trying to sell the Federal Government to young people and
they said, well, what's the advantage, Director, of me coming
into the Federal Government as opposed to going into private
industry, what would be your best pitch?
Ms. Springer. If I were doing that today, I would say that
you can come to the Federal Government and do almost anything
you want to do. If you don't know yet what you want to do in
your career, if you come to work for us and you change your
mind, you are still in the same system of opportunities. You
can go to anyplace you want. If you want to get into science
and research, fine, we can do that for you. If you want to
become an engineer, that's great. If you want to find a cure
for cancer, we're big enough to give you the funding to do it.
If you want to clean up the Everglades, that's great. If you
want to work in a park, we can do that for you. Anything that
you want to do in your career, you can do with the U.S.
Government; and, at the same time that you are doing that, you
are serving your country and other people. So it is really
fulfilling, and it's a great place. You can do anything you
want.
Mr. Cummings. And if they said in response to what you just
said, ``I notice that there is a 2.2 percent raise. I think I
can do better than that perhaps in private industry,'' what
would you say?
Ms. Springer. I'd say that, first of all, that 2.2 percent
is tied to an index. So we think that keeps it competitive. But
what we are going to do in this budget, the President has
proposed that we should be able to start to look occupation by
occupation and see if we need to do some special adjustments to
make sure that we are competitive.
Mr. Cummings. And if they said, ``When are you going to do
that? Because my life is going by. I am about to get married,
and I want to have children, and I need to have some kind of a
way to plan my future''--and let me give you the rest of it--
``and I know how slowly the Federal Government works.'' That's
it.
Ms. Springer. If you are getting married and you are
thinking of having children, then one thing you are really
thinking about, in addition to just your salary, is your health
benefits. You want to get with an organization that has good
health benefits. You are going to get with an organization
that's going to let you plan for the future. Companies today
out there, you have no assurance they're going to keep that
health benefit program or that you are not going to have to
pay. We pay 70 percent of the premium. Not only that, we have a
great retirement for you to start to be planning on. Not only
do we have a defined benefit plan, we also have our equivalent
of a 401(k). You are lucky to find either one of those in the
private sector.
So I am glad you care about your family, because we care
about them, too; and that's why we've got a great benefit
structure. The salary part is competitive, and we are making it
even more competitive. Do you want a job?
Mr. Cummings. That's pretty good.
Now what happens when they say, ``I notice that the
increase has been 3 percent over the last several years, and it
looks like we are dealing with 2 percent and 2.2 percent now.
Why should I have a lot of optimism about this pay raise
situation?''
Ms. Springer. Well, if it turns out that--we think 2.2 is
in line. But if it turns out that it's not, the U.S. Congress
will take care of it for you.
Mr. Cummings. But--OK. Let's talk about that 2.2 percent.
We have tried to have some kind of equity between the military
and the civilian population, is that right? And this is a part
of all of that?
Ms. Springer. Yes.
Mr. Cummings. But we are also going down, am I right, as
compared to in the past, the pay raises?
Ms. Springer. It's a lower percentage.
Mr. Cummings. And that is because of the overall budget
situation?
Ms. Springer. Well, it's not so much as that it is tied to
an employment cost index. That's what we look at. If that
employment cost index had been higher, then it would have been
a higher proposal in the budget. But the idea is that we are
trying to preserve the relative position of the Federal
Government in the labor market. We don't think we lose ground
if we can stick to that index. The index happened to be lower.
Mr. Cummings. And the locality based payment, how does
that--in the past--where does that money come from?
Ms. Springer. The locality-based portion is--that's part of
the 2.2.
Mr. Cummings. That's part of the 2.2.
Ms. Springer. Mm-hmm.
Mr. Cummings. And that has always been a part of the 2.2?
Ms. Springer. Yes.
Mr. Cummings. So you said to that employee--I see my time
is up. I do want to ask you this last question, though.
Ms. Norton was asking you a question about the health
insurance situation and this high-deductible situation. And you
have--you described your work force as one like a barbell. That
means we've got a few people in the middle, is that right?
Ms. Springer. Less in the middle. Yeah.
Mr. Cummings. So we've got the high-deductible folk at the
one end, and they are paying a lot of money, and they are
basically, I guess, probably the younger folk because they are
not so much worried about having to pay that deductible. Is
that a reasonable assumption?
Ms. Springer. There are some people that will react that
way.
Mr. Cummings. Well, what have been your findings? Have you
done any research on that?
Ms. Springer. It's limited so far. Because we've, first of
all, only offered this recently. And, as I said, it was either
7,000 or 14,000 people, which is a very small subset of the
whole 8 million that are covered in the plan. So we are still
studying it. GAO has issued the first report on it. And it is
true that younger people have made up a greater portion of
those who have been attracted to it. It remains to be seen
whether or not that will continue to be the case as it is
offered more broadly.
Mr. Cummings. And the GAO report talks about insufficient
information being given to the employees to make a decent
decision. You are familiar with that, are you not?
Ms. Springer. I've heard it. Yes.
Mr. Cummings. Well, I hope you've more than heard it,
because that's a big deal. Because I think the same person that
I talked to you about a little earlier would be concerned about
that whole issue of having sufficient information to make a
decision for the family. And, you know, you talk about how
concerned the Federal Government is about them. I think it
would be a sad day when somebody goes to try to get the
information that you need to make a decision--any of us--to
make a decision, and the GAO, which I have a tremendous amount
of respect for, comes back and says: These people are trying to
make a decision for their families. A lot of these people are
young people planning to have families. And then they look and
come to find out they don't have sufficient information.
I guess what I am asking you is you are the person who has
the--you carry a lot of weight--I am almost finished, Mr.
Chairman. You carry a lot of weight. And I believe that if you
said, look, there's something wrong with this picture,
insurance companies, we in the Federal Government want you to
give our people sufficient information so that they can make
decent decisions. I think just you saying that, if you haven't
already said it, would make a phenomenal difference.
As my pastor always said, he says: Words can create. And I
believe that the next time GAO looks at that, after you have
said these words that create a better circumstance for those
Federal employees to select, then that won't be a part of the
report.
Ms. Springer. Well, I agree with you. The next time GAO
does look at that, that won't be a part of the report. We, I
think, historically have done a good job on education. To the
extent that we need to do a better job on this piece of it, we
are going to do it.
One of the things, incidentally, that's in this plan--I'll
just take a second--is that we are trying to--and starting with
this call letter that goes out right now for the carriers of
the next season--is to ask them to give us more transparency,
particularly with specific procedures. So that if you are
trying to make a decision, well, on an appendectomy--if we know
that an appendectomy costs this if we go this way or this if we
go this way, that will help allowed for more informed choices.
So I agree with you 100 percent. That won't be there in the
next GAO report.
Mr. Cummings. Thank you very much.
Ms. Springer. Thank you.
Mr. Porter. Thank you very much. We appreciate your
testimony today.
I'd like to leave a couple thoughts. One, regarding more
information and health technology. And I appreciate your help
at least in partnering with us with that language where my bill
has to do with information technology. I understand we are
trying to make it as transparent as possible for the employees,
and I appreciate your help.
Twofold. What I would like to work on, whether it is in a
comprehensive bill, those that you've mentioned, or free
standing, two areas that I am very concerned about, one is
long-term care, as we mentioned, looking for some initiative
there. But also a priority is the part-time piece, and we have
to make sure that we address that nationwide and even in the
private sector and local governments to make sure we can
encourage those--especially those areas of significant need
from teachers across the country to Federal employees.
There is such a wealth of talent in our retirees that would
like to remain in the work force, and I would like to spend a
little bit of time understanding why the scoring is the way it
is, and not for today but in the future, so I can better
understand if it is an actuarial question or if it's a policy
question or an administrative question. I would like to find an
incentive to allow our Federal retirees or soon-to-retire and
even the private and local government sector to be able to stay
in the work force.
Ms. Springer. Glad to do that.
Mr. Porter. And I am also looking forward to the garage
sale when we sell all those cabinets. That's 28,000 cabinets.
So let me know when that is.
Ms. Springer. Will do.
Mr. Porter. Thank you very much for an outstanding hearing.
The meeting is adjourned.
[Whereupon, at 11:30 a.m., the subcommittee was adjourned.]
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