<DOC>
[106th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:64649.wais]
LAW ENFORCEMENT RETIREMENT COVERAGE
=======================================================================
HEARING
before the
SUBCOMMITTEE ON THE CIVIL SERVICE
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 9, 1999
__________
Serial No. 106-120
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
______
U.S. GOVERNMENT PRINTING OFFICE
64-649 CC WASHINGTON : 2000
COMMITTEE ON GOVERNMENT REFORM
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
STEPHEN HORN, California PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida PATSY T. MINK, Hawaii
THOMAS M. DAVIS, Virginia CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana ELEANOR HOLMES NORTON, Washington,
MARK E. SOUDER, Indiana DC
JOE SCARBOROUGH, Florida CHAKA FATTAH, Pennsylvania
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South DENNIS J. KUCINICH, Ohio
Carolina ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia DANNY K. DAVIS, Illinois
DAN MILLER, Florida JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas JIM TURNER, Texas
LEE TERRY, Nebraska THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California ------
PAUL RYAN, Wisconsin BERNARD SANDERS, Vermont
HELEN CHENOWETH, Idaho (Independent)
DAVID VITTER, Louisiana
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
David A. Kass, Deputy Counsel and Parliamentarian
Carla J. Martin, Chief Clerk
Phil Schiliro, Minority Staff Director
------
Subcommittee on the Civil Service
JOE SCARBOROUGH, Florida, Chairman
ASA HUTCHINSON, Arkansas ELIJAH E. CUMMINGS, Maryland
CONSTANCE A. MORELLA, Maryland ELEANOR HOLMES NORTON, Washington,
JOHN L. MICA, Florida DC
DAN MILLER, Florida THOMAS H. ALLEN, Maine
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
George Nesterczuk, Staff Director
Garry Ewing, Counsel
John Cardarelli, Clerk
Tania Shand, Minority Professional Staff Member
C O N T E N T S
----------
Page
Hearing held on September 9, 1999................................ 1
Statement of:
Bryant, Hon. Ed, a Representative in Congress from the State
of Tennessee............................................... 13
Davis, Hon. Thomas M., a Representative in Congress from the
State of Virginia.......................................... 6
Filner, Hon. Bob, a Representative in Congress from the State
of California.............................................. 40
Flynn, William E., Associate Director, Retirement and
Insurance Services, Office of Personnel Management; Kay
Frances Dolan, Deputy Assistant Secretary for Human
Resources, Department of the Treasury; and John Vail,
Deputy Assistant Attorney General for Management,
Department of Justice...................................... 60
Kelley, Colleen M., national president, National Treasury
Employees Union; Peter J. Ferrara, chief economist,
Americans for Tax Reform; and Gilbert G. Gallegos, national
president, Fraternal Order of Police....................... 95
Mink, Hon. Patsy T., a Representative in Congress from the
State of Hawaii............................................ 50
Traficant, Hon. James A., a Representative in Congress from
the State of Ohio.......................................... 46
Letters, statements, et cetera, submitted for the record by:
Bryant, Hon. Ed, a Representative in Congress from the State
of Tennessee, prepared statement of........................ 15
Davis, Hon. Thomas M., a Representative in Congress from the
State of Virginia, prepared statement of................... 9
Dolan, Kay Frances, Deputy Assistant Secretary for Human
Resources, Department of the Treasury, prepared statement
of......................................................... 77
Ferrara, Peter J., chief economist, Americans for Tax Reform,
prepared statement of...................................... 168
Filner, Hon. Bob, a Representative in Congress from the State
of California, prepared statement of....................... 42
Flynn, William E., Associate Director, Retirement and
Insurance Services, Office of Personnel Management,
prepared statement of...................................... 63
Gallegos, Gilbert G., national president, Fraternal Order of
Police, prepared statement of.............................. 155
Kelley, Colleen M., national president, National Treasury
Employees Union:
Prepared statement of.................................... 135
Various statements....................................... 97
Mink, Hon. Patsy T., a Representative in Congress from the
State of Hawaii, prepared statement of..................... 52
Scarborough, Hon. Joe, a Representative in Congress from the
State of Florida, prepared statement of.................... 3
Traficant, Hon. James A., a Representative in Congress from
the State of Ohio, prepared statement of................... 47
Vail, John, Deputy Assistant Attorney General for Management,
Department of Justice, prepared statement of............... 82
LAW ENFORCEMENT RETIREMENT COVERAGE
----------
THURSDAY, SEPTEMBER 9, 1999
House of Representatives,
Subcommittee on the Civil Service,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 10 a.m., in
room 2154, Rayburn House Office Building, Hon. Joe Scarborough
(chairman of the subcommittee) presiding.
Present: Representatives Scarborough, Cummings, and Norton.
Staff present: George Nesterczuk, staff director; Garry
Ewing, counsel; John Cardarelli, clerk; Ned Lynch, senior
research director; Jennifer Hemingway, policy director; Tania
Shand, minority professional staff member; and Earley Green,
minority staff assistant.
Mr. Scarborough. Good morning, ladies and gentlemen. I
would like to call this hearing to order. Our purpose today is
to delve into the details of one of the more sensitive subjects
in our committee's jurisdiction--the Federal retirement
benefit. The Federal Government is among the world's most
generous employers in providing retirement benefits for
employees who complete careers in public service. That benefit
comes from annual cost of living adjustments that are unmatched
in the private sector, and Federal employees are eligible to
continue their health and life insurance coverage during
retirement, with the government continuing to pay the
employer's share of the expense.
Select groups of Federal employees qualify for even more
generous retirement benefits. Because of the physical and
mental strain associated with occupations classified as Federal
law enforcement officers, firefighters, air traffic
controllers, and nuclear materials couriers, these employees
are eligible for enhanced benefits after as little as 20 years
of service. Because these positions demand a young and vigorous
work force, they carry a mandatory retirement age.
In crafting these benefits, a careful balance needs to be
maintained between mandatory attrition and timely recruitment,
between loss of experience and proper training of replacement
workers, between safety requirements and program costs. The
Federal retirement system is expensive in its generosity and
totally unfunded in its asset base. The enhanced retirement for
special occupations is even more expensive and much more of a
liability on future taxpayers. It is our fiduciary
responsibility to our citizens to make sure that these benefits
are properly assigned and extra costs fully warranted.
During every session of Congress, the committee is deluged
with requests to increase or otherwise improve on this
generosity. This session of Congress is no exception. Some of
the bills before us today, while well intentioned, contain
provisions that work at cross purposes with agency missions.
For example, forcing experienced employees into mandatory
retirement, while Federal agencies complain of difficulties
recruiting qualified professionals into public service, may not
be wise public policy. And, of course, increasing the costs of
retirement to agencies already at their spending caps simply
makes it more difficult for them to perform their mission. Some
might have to reduce other employment to fund this added
benefit. We really must proceed cautiously.
I want to thank our witnesses today, and hope that the
evidence compiled for today's hearing provides the foundation
for a thorough examination of the many issues involved in the
complex management of the retirement system for the Federal
work force. Most importantly, we want to come up with something
that is fair to the employees of these very difficult positions
and is also something that we can afford as the Federal
Government.
And with that, I would like to turn it over to the
distinguished ranking member from Maryland, Mr. Cummings.
[The prepared statement of Hon. Joe Scarborough follows:]
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Mr. Cummings. Thank you, Mr. Chairman. The purpose of this
morning's hearing is to examine the classification of certain
Federal employees as law enforcement officers and their
resulting entitlement to special retirement benefits. This
issue is important to me because it affects the law enforcement
community.
Earlier this year I introduced H.R. 1769, the Federal
Employees Benefits Equity Act of 1999. My legislation
eliminates certain inequities under the Civil Service
Retirement System and the Federal Employees Retirement System
with respect to computation of retirement benefits for law
enforcement officers, firefighters, air traffic controllers and
others.
The legislation also provides an enhanced annuity to
employees who, after 20 years of qualifying service regardless
of age, are forced to retire due to involuntary separation or
for disability. The measure also provides for a refund of the
additional 0.5 percent retirement contribution with interest
when employees in this occupation retire or die before
obtaining eligibility for the enhanced annuity.
Federal officers in varying degrees and capacities uphold
the Constitution and protect the public welfare. Over the years
there has been much debate and controversy on which types of
Federal employees should be classified as law enforcement
officers, and, as such, should receive enhanced pay and
requirement benefits.
In 1988 the Anti-Drug Abuse Act established a national
advisory commission on law enforcement which studied the pay,
benefits and other issues relating to the recruitment and
retention of employees defined as law enforcement under Federal
retirement laws.
The commission's report which was released in April 1990
made several recommendations for interim pay enhancements for
law enforcement officers and suggested that the Office of
Personnel Management conduct a further study on the need for a
new pay system for Federal law enforcement. The commission's
report did note, however, that the statute defining Federal law
enforcement officers was broad, encompassing both traditional
positions within the field and less traditional positions not
generally considered part of the law enforcement community.
As recommended by the commission, the Federal Employees Pay
and Comparability Act of 1990 enhance law enforcement pay and
directed OPM to conduct a study of pay and job evaluation for
the Federal law enforcement officers. OPM, along with a 45
member advisory committee drawing from law enforcement agencies
and employee groups, produced a report entitled, ``A Plan to
Establish a New Pay and Job Evaluation System for Federal Law
Enforcement Officers'' in September 1993.
Two months later, the Committee on Post Office and Civil
Service held a subcommittee hearing on the report and its
findings. At that hearing, Ms. Barbara Fisk stated that OPM
determined at the outset that the definition of law enforcement
officer used in the FEPCA provisions based on retirement law
needed to be examined because it covered employees whose
primary duties included such diverse jobs as health care,
accounting and cooking, but excluded employees whose primary
duties include maintaining law and order and protecting
property and the civil rights of individuals. OPM's fact-
finding mission confirmed OPM's belief that the coverage issue
had to be reconciled.
It is evident from the witnesses scheduled to testify today
that the coverage issue has not been reconciled. There seems to
be questions of both whether the definition of law enforcement
officer should be expanded to include additional categories of
Federal employees or whether it should be narrowed.
Finally, determining the definition of a law enforcement
officer is clearly a very complex and controversial issue. This
hearing is an opportunity for us to revisit this issue and find
permanent solutions to the concerns that have been raised in
the past and that are still lingering today. I want to thank
our witnesses for being here and I look forward to your
testimony.
Mr. Scarborough. Thank you, Mr. Cummings. We certainly
appreciate your work on this important issue and the bill that
you have offered.
I want to get to our first panel, which is a group of
colleagues that care deeply about the issues before us today
and have introduced bills that provide the background of this
very important hearing. Let's start with the Honorable Tom
Davis of Virginia who has introduced H.R. 583, which is a bill
to provide law enforcement retirement coverage for assistant
U.S. attorneys.
We also have the Honorable Ed Bryant of Tennessee. He is a
former U.S. attorney and is cosponsor of H.R. 583 and is
testifying today also on behalf of the National Association of
Assistant U.S. Attorneys; the Honorable Bob Filner of
California introduced H.R. 1228, a bill which would extend
Federal law enforcement retirement coverage to several
additional employment classifications, including immigration
inspectors, Customs inspectors, Internal Revenue Service
officers; the Honorable Jim Traficant of Ohio, sponsor of H.R.
424, a bill which would raise the mandatory retirement age of
the U.S. Capitol Police from age 57 to age 60; and the
Honorable Patsy Mink of Hawaii who introduced H.R. 1748, a bill
that would raise the mandatory retirement age of all Federal
law enforcement officers to the age of 60.
I would like to welcome all distinguished Members and thank
you for coming by today. Why don't we start with you, Mr.
Davis?
STATEMENT OF HON. THOMAS M. DAVIS, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF VIRGINIA
Mr. Davis of Virginia. Thank you very much for holding this
hearing. I will put my full statement in the record and I will
abbreviate it.
Mr. Scarborough. Without objection, so ordered.
Mr. Davis. Let me say that I think law enforcement benefits
should be extended to individuals who choose a career that
places the safety and welfare of themselves and their families
in jeopardy. I think that was the original intent of the law,
and that is what we are trying to do by putting assistant U.S.
attorneys under that, so that individuals who are tasked to
uphold the laws of our country are the same individuals who are
receiving the law enforcement benefits.
On a daily basis, assistant U.S. attorneys fight to enforce
our code of Federal laws and are increasingly called upon to
enforce a wider range of criminal laws, to bolster the efforts
of State and local governments in the fight against crime, and
as we Federalize more and more crimes, we are finding they are
tasked to do more with less. They carry their jobs on a daily
basis without a lot of fanfare, but they have to prosecute
criminals who are represented by defense attorneys who are
getting hundreds of dollars an hour, who are much better paid
than themselves, and they opt to stay in government and wear
the white hat instead of going out on the other side where they
could make much more money simply to be on the right side. But
it becomes much more difficult when the pay differentials
increase and increase.
Providing the full benefits I think would be a career
enhancement that would keep more people in the Federal service
for a longer period of time. Right now the average period is 10
years. The hours are long and the pay is low. AUSAs have placed
themselves and their families in harm's way by prosecuting
criminals.
I refer to a specific case, of which there are many in my
testimony that I will not review with you here, but there are
cases where the assistant U.S. attorneys are threatened by
criminal elements and put their lives and their families at
risk and sometimes need extra protection just for sitting out
there and doing their jobs.
Under the Code, the duties of law enforcement officers are
defined as primarily the investigation, apprehension, or
detention of violators of Federal law.
If we were to use the broader definition of the original
criteria behind creating enhanced retirement benefits, I think
the assistant U.S. attorneys should be eligible for this
additional benefit and should have been for a long time. When
the enhanced retirement benefit was first created in 1948, it
applied to those occupations that require great mental or
physical stamina. Certainly the well-documented demands of the
assistant U.S. attorneys' workload and schedule apply to that.
As the recent class action suit filed by the AUSAs against the
Department of Justice shows, these prosecutors are routinely
called upon to put in significant amounts of overtime. DOJ
illegally describes overtime as a necessary requirement of the
job and assistant U.S. attorneys are fighting crime and
sacrificing time with their families, putting them sometimes in
jeopardy, and they receive very little tangible recognition for
their work.
Let's touch briefly on the overtime issue that faces AUSAs
as it affects or, more pertinently, does not affect their
enhanced requirement benefit. Assistant U.S. attorneys are
currently involved in a class action lawsuit against the DOJ.
DOJ does not pay its attorneys overtime, as required by the
Federal Employees Pay Act. For years, DOJ as the enforcer of
this law in other agencies has knowingly violated the law by
denying them overtime pay. To add insult to injury, the DOJ
requires its attorneys to keep two sets of books, one that
reflects a 40 hour work week, and one that shows the actual
number of hours that are worked. The latter set of books is
given to Congress for appropriations purposes. It is also
provided to Federal courts and judges when requesting that fees
be paid. The DOJ does not deny this overtime benefit to any
other law enforcement division under its jurisdiction. It is a
reasonable compensation that assistant U.S. attorneys are
entitled to by law, and certainly their counterparts, the
defense attorneys, are getting paid by the hour, as they sit
there through these lengthy criminal cases, instead of a flat
fee.
I do not believe that the law enforcement retirement
benefit should have any impact on the overtime benefit or the
resolution of that, but the law enforcement officers receive
overtime for much the same reason that they receive their
enhanced benefit: They face an unusually high level of stress
and danger in performing their jobs.
Since I introduced this legislation on February 4, we have
been contacted by assistant U.S. attorneys across the country
who have shared their harrowing experiences fighting crime and
the very real threats that have caused them to change their
life-style. We have shared this with some of the committee in
our prepared testimony. The legislation has garnered
significant support in this Congress. The number of inquiries
that I have received about this in the brief period between the
105th Congress and the 106th Congress shows that they are
widely recognized as an essential part of our Federal crime-
fighting cadre. And we have 36 cosponsors. Some of them are
former assistant U.S. attorneys, and you are going to hear from
a very distinguished one, Ed Bryant, who is going to be
testifying here today, who can testify firsthand what they
face.
I am not going to attempt to move the legislation forward
until reasonable, fair offsets are found. And I think the
mandatory retirement is a good question when you get into this
intellectual exercise, and I will be flexible in terms of
working with you on that. But they ought to be compensated
better or we will lose a good cadre of people that are up
against the top-notch defense attorneys in some of these cases,
and we get outgunned. I think this is an important step to
keeping us on the front levels of law enforcement and keeping
the best people we can find to go into the courtroom and
prosecute criminals. Thank you.
Mr. Scarborough. I thank you, Congressman Davis. You are
right. This is a very important issue. You have received a lot
of inquiries. I know that I certainly have.
[The prepared statement of Hon. Thomas M. Davis follows:]
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Mr. Scarborough. The genesis of this hearing is when a
group of assistant U.S. attorneys came to my office and brought
it up. It is an issue that needs to be addressed. It is
critical to us.
Representing the group that first talked to me about it
today is Congressman Ed Bryant who was a former U.S. attorney.
STATEMENT OF HON. ED BRYANT, A REPRESENTATIVE IN CONGRESS FROM
THE STATE OF TENNESSEE
Mr. Bryant. Thank you, Mr. Chairman. I thank you and the
members of your subcommittee for holding this hearing today,
and I am pleased to testify on behalf of the National
Association of Assistant U.S. Attorneys in support of H.R. 583,
the Assistant U.S. Attorneys Retirement Benefit Equity Act of
1999.
As a former U.S. attorney from the western district of
Tennessee, I have firsthand experience and knowledge about
AUSAs and the integral role they play in Federal law
enforcement. I had 29 working for me at that time.
Currently there are more than 4,700 AUSAs who work in 93
separate offices throughout the country. These AUSAs are the
U.S. attorneys' principal support for ensuring that laws are
faithfully executed. In today's environment of sophisticated
white collar crime, domestic and foreign terrorism,
international narcotics trafficking, espionage, government
program fraud, organized crime and labor racketeering, the role
of the AUSA has evolved to include substantial investigative
duties. AUSAs control and direct the most crucial investigative
tool in the criminal justice system--the grand jury. AUSAs
oversee and participate in the investigative activities of the
Federal law enforcement officers working on major prosecutions
and review and approve complex search warrants and applications
for wiretaps. In multi-agency cases, the AUSA functions as a
supervisor of agents' activities, particularly challenging
since there is no line authority from the AUSA to an agent.
Civil AUSAs defend lawsuits brought against Federal agents
in connection with their performance of their law enforcement
duties. Prisoner litigation is an additional aspect of the
civil AUSAs' practice. Civil AUSAs represent the government in
suits brought by those who wish to obstruct government
operations. AUSAs have been threatened in this context, had
false liens filed against their property and have had false
Form 1099s filed with the IRS.
The increasing complexity of Federal investigations and the
resulting criminal and civil litigation has spawned a
relatively new phenomenon--the career AUSA. Unfortunately, as
more and more AUSAs seek careers within DOJ, the Department has
not reacted to provide the professional benefits deemed routine
in the highly stressful law enforcement community. As you know,
under the current retirement system, Federal law enforcement
agents are eligible to retire at 50 percent of their ``high-
three'' salaries at age 50 with 20 years of service. Currently
AUSAs are the only employees in the criminal justice system who
do not receive this law enforcement retirement which recognizes
the stressful occupations associated with fighting crime and
the physical and mental challenges which wear down body and
mind at an accelerated pace.
Originally authorized in 1948, Federal law enforcement
retirement benefits were intended to liberalize retirement
provisions in order to enable agents and investigators to
retire at age 50 while still physically fit. In enacting that
legislation, Congress recognized the stressful, sometimes
dangerous work performed by the law enforcement officers, as
well as the need for career investigators in the Federal
Government. At that time there were no career AUSAs and
therefore there was no reason for their inclusion in the
statute.
Back in those days the U.S. attorneys and the assistants
all left every time there was a change of administration, but
since that time circumstances have changed significantly. Only
during the 1980's did the AUSAs begin to remain employed by the
Department until retirement on any regular basis.
In the last 2 decades, the position of the AUSA has evolved
from being largely political, where it was routine for all
AUSAs to resign upon the appointment of a new U.S. attorney.
Then the newly employed attorneys inherited entire caseloads of
ongoing prosecutions, and this disruption badly damaged the
continuity of the investigations and prosecutions, both civil
and criminal. So it was important to have this continuity, and
this is a good thing that we are going to, with more and more
of our AUSAs becoming career oriented.
Congress has recognized the importance of maintaining an
experienced force of career AUSAs. In 1990, the Civil Service
Due Process Amendments extended the procedural protections of
the Civil Service Reform Act to the AUSAs. No longer constantly
in jeopardy of being replaced for practical reasons, more and
more of our AUSAs are remaining with the DOJ for their career,
thus ensuring the government is getting the best
representation.
I have got a couple of more pages, but let me skip through
this because I have my full statement in there. I do want to
say, given the increasing complexity of the legislation dealing
with offenses against the United States, and the increasing
sophistication of the law breakers--and my colleague, Mr.
Davis, alluded to this and their ability to hire the best and
pay them at tremendous rates per hour to represent them--our
own U.S. DOJ requires the services of experienced, seasoned
AUSAs to protect the interests of the American people to be
able to compete on a level playing field. The work is demanding
and stressful and fraught with danger.
I too know of cases when I was a U.S. attorney where
assistants were under physical threat and death threats. I know
that they face threats and strain of mind and body to a degree
equal to and in some instances exceeding that faced by others
traditionally included in the Federal law enforcement
retirement system.
The time has come for Congress to recognize AUSAs for what
they are, an essential part of the front line defenders of
safety and justice in America. The AUSA should no longer be the
only member of the Federal criminal justice system denied law
enforcement retirement. And I thank the Chair for listening.
Mr. Scarborough. Thank you, Congressman Bryant.
[The prepared statement of Hon. Ed Bryant follows:]
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Mr. Scarborough. Congressman Filner.
STATEMENT OF HON. BOB FILNER, A REPRESENTATIVE IN CONGRESS FROM
THE STATE OF CALIFORNIA
Mr. Filner. Thank you. I want to start off with an ironic
kind of note that drives me as I put forward this legislation.
I am sure that you have visited the National Law Enforcement
Memorial in Judiciary Square, which was established in 1991 to
honor Federal, State, and local law enforcement officials. When
they die, their names are inscribed on this memorial. Many of
the people I am trying to talk about in my bill who do not have
law enforcement status in life, if they get killed in action
doing their work as inspectors, for example, their names are
inscribed on the law enforcement memorial. So in death, they
get the status that I think they ought to have while working to
protect us.
I hope you keep that irony in mind as we proceed on this
legislation because I am honored to be in the presence of
valiant men and women who put their lives on the line to ensure
our Nation's safety. Most are not recognized as law enforcement
officers, like Inspector Robert Labrada who put his life on the
line 2 years ago when a desperate marijuana smuggler opened
fire on him and his partner, Inspector Lira, at the United
States-Mexico border. Both men were seriously injured and
hospitalized. Fortunately, they survived the gun battle, unlike
the gunmen. If they had not, these valiant inspectors' names
would have been put on the wall of that memorial.
I think it is a cruel and inhumane irony that this
situation exists. It does not make sense. How can we not afford
law enforcement status for these men and women? They daily
encounter dangerous and life-threatening situations. I
represent a neighborhood in San Diego, the home to the busiest
border crossing in the world, the San Ysidro community of our
city. Customs and INS inspectors work side by side with others
who have law enforcement status, and they have, we might say,
an equal opportunity to be exposed to danger and I have seen
this firsthand. They exchange shots and are roughed up, forced
to run after suspects, disarm them, just the same as their
counterparts on the Border Patrol or INS who do have law
enforcement status.
INS Inspector John La Cuesta who is also here with us from
our Southern California District can similarly attest to the
dangers of this job.
Others are in a similar position ranging from drug
enforcement agency diversion investigators to Department of
Defense officers in charge of law enforcement of our military
bases. They do the job of law enforcement officers. They do not
have the status or the benefits.
I know the work of the INS and Customs Inspectors at the
United States-Mexico border. I live right at the border. These
men and women make our community safer, but because of the
current lopsided law, they are not given status and we lose, as
a result, vigorous trained professionals to other law
enforcement agencies.
The average length of Federal service according to reports
is 15 years compared with 7 for the Inspectors in Customs. Why
would Customs Inspectors and INS Inspectors who daily face
threats from drug smugglers upset after being arrested, who
disarm thieves as they attempt to run across the border after
robbing businesses in Mexico, who stop drunken revelers
attempting to drive into the United States, why would they not
want to work for some other organization that does recognize
them as law enforcement officers? These Inspectors, like the
others I deal with in my bill, carry guns and perform a great
service in protecting us as they face a variety of dangerous
folks.
Last year alone, aside from minor injuries, 25 INS
Inspectors were seriously injured on the job in dealing with
these situations. The Customs Service has the highest narcotics
seizure rate of any agency in the United States, year after
year, with the highest apprehension of fugitives and felons of
any agency in the country, and that is a testament to these
Inspectors. They face dangerous felons. They have been run over
by cars. They have been shot at and disarm sawed-off shotguns,
switchblade knives and handguns. Many have lost their lives. In
fact, 43 Inspectors in U.S. Customs and INS have been killed in
the line of duty. And as I said at the beginning, their names
are inscribed on the National Law Enforcement Officers Memorial
in their death.
I say, Mr. Chairman, it is too long for these Inspectors
and other law men and women that I refer to in my bill to wait.
I think the cost is way too high not to grant them this
benefit.
I am heartened, Mr. Chairman, and Mr. Cummings, to learn
and know of your interest in exploring this issue. I hope we
find a way to do what is right. I know you and your staff have
looked at numbers. There are obvious arguments against this,
but I ask you to try to find a way to do it. If you tell me the
cost is too high, besides some questions of the methodology, I
will say let's find a way to phase in the benefit so that the
cost is not as high. Let us deal with the base wage in a
different way if the cost is too high, but let us grant these
men and women the law enforcement status that they actually
perform every day.
Mr. Scarborough. Thank you, Congressman Filner. You made
some great points and I agree with you 100 percent. The purpose
of this hearing and this committee should be to figure what is
possible and what we can do to help those people that are
working as law enforcement officers.
[The prepared statement of Hon. Bob Filner follows:]
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Mr. Scarborough. Congressman Traficant.
STATEMENT OF HON. JAMES A. TRAFICANT, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OHIO
Mr. Traficant. Thank you, Mr. Chairman. I am here on H.R.
424, about the Capitol Police. It would extend the retirement
age from 57 to 60. I think it is justified even though many are
concerned that we may have to take other government agencies
along with it, and that would be fine, but I think we should
start here and recognize the impact.
First let me say that in the beginning, the Capitol Police
were looked at as political patronage soft jobs, good jobs.
Now, after Officers Chestnut and Gibson, we know this is a
police agency.
Here is the dilemma we face, Mr. Chairman: having enough
officers. Most Secret Service agents, Treasury agents, FBI
agents, they are all excited with the status of their Federal
employment, and they are not likely to lose their young
members. Our young police officers are being recruited by
suburban police departments for more pay after they have been
qualified to the tune of $150,000 taxpayer dollars to say this
is a good recruit. Then at age 57, they are in perfect health,
and we tell them they have to leave because we have set in
place some type of an accelerated retirement program that did
make sense at some point but now serves no purpose.
Since 1997, in a short 3 years, we will have lost 25
experienced police officers, most of them who would opt to
stay. We are having our young officers raided, our qualified
older officers raided. And let me say this: Officer Gibson was
mortally wounded when he took the police action that was
necessary to protect the lives here at the Nation's Capitol.
Experience is very important. I believe that there are
merits to looking at the expansion of retirement age for all
Federal agencies, but I believe that cost factor, which has
everybody worried, could be set aside with an impact evaluation
on the Capitol Police.
And let me say this: There are many of these police
officers averaging 56 hours of overtime a month because of the
shortage of personnel. Now I have to say it, beam me up there.
They are taking our young ones and we are sending our old ones
on a fast track out of here. We are spending millions of
dollars on overtime. I would like for you to report this bill
out. Use it as an evaluating mechanism for that which my good
friend and colleague, Patsy Mink, is bringing forward that
would deal with the same issue for all Federal agencies. Do not
tie this up. We will lose 4 more good officers in the next 2
months.
I ask unanimous consent that my written statement be
included in the record.
Mr. Scarborough. I don't think that anyone would dare
object. Without objection, so ordered.
[The prepared statement of Hon. James A. Traficant
follows:]
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STATEMENT OF HON. PATSY T. MINK, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF HAWAII
Mrs. Mink. Thank you, Mr. Chairman and Ranking Member Mr.
Cummings. I appreciate all of the comments made by my
colleagues, and I support everything that they have said. I am
here to support the bill that I introduced, H.R. 1748, and it
is to underscore all of the comments that have been made about
the importance of the work that law enforcement officers
contribute to our communities and to the Nation as a whole.
My bill is very simple. It just raises the age of mandatory
retirement of law enforcement officers from 57 to 60 years.
This matter came to my attention by a constituent of mine who
works for the Department of Treasury in Honolulu. Under current
law, Federal law enforcement officers have to retire at age 57.
This includes officers from all of the various Federal
agencies, the FBI, Bureau of Prisons, DEA, INS, and so forth.
The current mandatory age I believe is too restrictive; 57
years of age is too young to force a dedicated officer into
retirement. If we applied this same retirement to the House of
Representatives, 159 of us would be forced to retire. Today,
medical advances have dramatically improved health and
longevity. Law enforcement officers at 57 years of age are
still in their prime and capable of performing the physical
demands of their job. They should not be deprived of the work
they love merely because they have reached the age of 57.
Raising the mandatory retirement age to 60 would provide them
the opportunity to continue to work. It would not jeopardize
the safety of the younger officers on the force, nor the
citizens they are assigned to protect. Instead, the younger
officers would continue to benefit from the senior officers'
wealth of experience. Other demanding jobs like air traffic
controllers have a mandatory retirement age of 60.
Furthermore, under current law the officer does not have to
remain on the force until age 60. He can retire at the minimum
age of 50 as long as that officer has completed 20 years of
service. They cannot enter the law enforcement career after the
age of 37. They put 37 as the maximum age for the initial
employment, allow 20 years of service, and a person can go out
at 57. That is the way that the current formula reads.
I want to note to this committee that the Federal Law
Enforcement Officers Association opposes my bill, and I attach
a letter of their opposition which states primarily that they
feel that agent safety will be impacted; but I am told by the
individuals who have supported my bill that one of the things
that they fear is that the mandatory age debate will renew
consideration of raising the minimum retirement age, which they
all oppose and I certainly would oppose that also. I see no
reason to deprive experienced officers of an opportunity to
work.
We are facing an increasingly aging population and I am
sure that the law community recognizes the experience that they
bear into their various functions. I am told by this individual
who came to me with this issue that in a 5-year period between
1998 and the year 2002 in just the criminal investigation
division of the U.S. Treasury, they expect to lose between 40
to 45 percent of their special agents merely because of the
mandatory age of 57.
And so when you ask me the question what is this going to
cost, I want to raise the issue that my colleague, Mr.
Traficant also raised and others, that to bring in a new person
to fill that job costs hundreds of thousands of dollars for
just that one person. And so if we are talking about money as
the main factor against doing what is logical, I raise for your
consideration the point that the loss of these experienced
individuals who want to continue, who are physically able to
continue to work, is a factor that has to balance off whatever
additional costs it might be to retain them, as against the
cost of training new officers to take that position which is
being vacated at age 57 by senior experienced officers that
only want an opportunity to continue to serve. All officers can
retire at age 50 if they wish. They can retire at any age at
which they choose to do so after 20 years of service.
It seems to me that this is a fair request and one that
takes into recognition the superior quality of senior officers
who merely desire to stay in, and I see no reason why they
should be forced to retire at age 57. Thank you very much, Mr.
Chairman.
Mr. Scarborough. Thank you, Congresswoman.
[The prepared statement of Hon. Patsy T. Mink follows:]
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Mr. Scarborough. Mr. Filner, let me start with you. It
sounds as if you and our other two witnesses who are still here
are somewhat at odds with each other. You are wanting to allow
more Federal employees to retire at the age of 57. You want to
lower their requirement age. And Congressman Traficant and
Congresswoman Mink are talking about raising the age up to 60.
Who is right and who is wrong?
Mr. Filner. Obviously we are all right.
Mr. Scarborough. Can you explain that?
Mr. Filner. Let me repeat. What we are arguing are whatever
the rules are for law enforcement officers apply to these
Inspectors. If the mandatory age were raised, it would be
raised for those coming into that classification under my bill.
The question is fairness and morale and good common sense. Give
status to those who are doing the job of law enforcement, who
just simply are denied that status mainly out of a bureaucratic
classification; and whatever rules apply to those with law
enforcement status--that is a different argument--would then be
applied to them. They are not arguing for the lower retirement
age, they are arguing for the status and the benefits that come
to being a law enforcement officer.
Mr. Scarborough. So you would not have any objection if
that age was raised to 60?
Mr. Filner. Offhand I haven't thought about the legislation
itself, but I doubt it. The question here is equity and
training. And again my colleagues pointed out the costs
involved in retraining new people, which are not calculated in
some of your staff reports. The same applies here in even
greater numbers. Without that status and retirement benefit, we
are losing good men and women to other agencies. I see it in my
own county where the local police departments and sheriff's
department grab off these people and we have to train again. We
lose money in that deal.
Mr. Scarborough. We are going to spend the next month or
two, 2\1/2\ months, trying to figure out how to stay within
spending caps, trying to figure out how to get out of here
before Christmas and pass all of the appropriations bills
without busting the budget agreement that we passed a few years
ago. Obviously there are costs, there are some costs that are
involved here. You and I think Congressman Traficant and
Congresswoman Mink have made some arguments that say hey, there
is another way to look at this.
Let me ask you to respond to what the Treasury Department
is going to be saying later on. The Treasury Department witness
is going to testify this morning that H.R. 1228 would cost that
Department alone nearly $750 million in payroll costs over the
next 5 years and impose an unfunded liability of about $1
billion on the Federal Employees Retirement Fund. Have you been
made aware of that by the Treasury Department; and if so, what
is your response to that?
Mr. Filner. Well, we have to give you in more detail some
of the criticism that we have of some of the methodology used.
The Department used the worst kind of assumptions that
everybody retires immediately, and that shoots up the unfunded
liability. That shoots up the cost to the agency.
I think that is probably not a good assumption. If it were,
as I said, we could talk about and I am sure folks would be
happy to explore different mechanisms to bring down that cost,
whether it were a phase-in over 10 years even. Again the base
pay is not the major issue, it is the retirement benefits, and
so they included that base pay increase as part of their
assumptions.
We will get you in writing our criticisms of the
methodology. We calculated a much, much lower cost based on the
figures that were given to us by the Treasury and other
agencies in dealing with the employee associations that are
involved in this. We came up with far different numbers. As I
said, even with those lower numbers, we can get them lower by
again taking some other steps as a compromise way. If we say
this is our goal--and I think that is what this committee ought
to do--the goal is equity and common sense. The costs have to
be dealt with, but I would also argue that they did not factor
in the savings that come from a lower turnover, lower loss of
good people and productivity factors, without getting into
philosophical agreements whether those caps mean anything or
should mean anything anyway.
Mr. Scarborough. I appreciate the offer to send something
in writing. That will help us out.
OPM has provided data that some of the intended
beneficiaries of your bill have to face immediate mandatory
retirement, that the agencies would no longer be able to hire
applicants who are older than 37, thereby cutting off an
important source of new employees that agencies would need to
replenish their work force. H.R. 583 would have a similar
impact on the Department of Justice. Can you address what we
are going to be hearing from OPM and mandatory retirement?
Mr. Filner. Again, my problem is some of what I call
bureaucratic response, reasons why we can't do something
instead of let's find ways to achieve what we want to.
Clearly you can be flexible in that. You phase in,
phaseout. You do it in a gradual way so you are not faced with
those downsides. So if I said to them, find me a way to do this
in which we do not get the problems, I think then they will
come up with that. But they tend to come up with reasons why
you can't do something rather than giving them directions that
say we want this equity. We have certain cost containment. We
don't want to have these employee disruptions that you
mentioned. Tell me how you do that, and I think everybody would
be happy to sit down and figure it out.
Mr. Scarborough. When you say that you have agencies that
are looking for ways to just say no, you are sounding a little
bit like John Mica. You need to be careful there.
Mr. Filner. Thank you.
Mr. Scarborough. Congressman Traficant and Congresswoman
Mink, Representative Filner talked about flexibility, that we
can be more flexible in the way that we deal with this issue.
Under current law, agency heads already have the discretion to
waive mandatory retirement provisions affecting law enforcement
retirement coverage so that employees can work until the age of
60 with the approval of the agency head, and data shows that
very few employees request such waivers.
Would you address why the ability to waive is not enough
and why your approach is not overkill to a problem that some
will argue on the next panel is.
Mrs. Mink. Because basically when you approach the question
of selectivity, giving the agency head the option to waive the
mandatory rule, you are opening up a very small window for
selected individuals. And it seems to me that if it is OK for
some to stay on until the age 60 or whatever age it is extended
to, that we ought to renew the look at the whole situation.
Given the fact that not very many are going to stay, why
not allow those who want to stay until age 60 an open window to
do so? They already have the options to opt out at early
retirement, at age 57, having come on before 37 and maybe at
27, and they can retire at age 50. That is a given option under
the current rule.
For those that are reaching mandatory age, they have come
into the service just before 37 to get out at 57, but looking
at the character of the force, the degree of needs that they
have for experienced personnel in a very short period of time,
it seems to me that for those individuals that I have talked to
who sincerely feel that they are being discriminated against by
being kicked out so early, that this option of staying on until
age 60 is a reasonable accommodation to those requests rather
than having them go through this complicated system of seeking
a waiver and seeking an option from their superiors.
Mr. Scarborough. I know that can be frustrating. I actually
had an officer that handed me several times a Dear Colleague
from Congressman Traficant telling me to take it to the
appropriate authorities, and I just smiled and kept my mouth
shut and kept walking.
Congressman Traficant, why don't you address that?
Mr. Traficant. Let me talk about the waiver business and
about a term that is involved with the art of elective
politics, take elected out and talk politics. The one waiver
that was granted was to a driver of one of the congressional
leaders. A couple of other officers that sought it couldn't get
through the front door.
My bill is straightforward, and let me tell you something.
It opens up a cost analysis factor that Mr. Filner is now
facing, that Mrs. Mink is now facing, but we can evaluate the
impact of cost through a demonstration of something very
significant where we need Capitol Police here. That is why my
bill has been straightforward on the Capitol Police. It takes
politics out of it. You don't have to know anybody or kiss
anybody's ring, and everybody is treated the same.
Like old Vince Lombardi said, ``Treat everybody like dogs,
by everybody alike.'' That is what we need to do, Mr. Chairman.
I am very concerned about the loss of Capitol Police personnel.
We are out trying to hire them. I think Mr. Filner and Mrs.
Mink's comment about training is justifiable because you have
to look at the double training: the one that you train that
leaves, and the one that you train to take their place. And
then you put them in that situation where they are still prime
targets for leaving. Then you take a look at the overtime you
are paying and the impact on morale which no one has yet talked
about. You begin to tear into the morale and fabric of a police
force. This is Capitol Police. It is no longer the country club
program.
Let me just say this. The Metro area is here. Many of them
have no retirement age limit at all and they pay more money. So
I think these are justifiable concerns on a macro basis and
also the micro initiatives which we face because our personnel
are being recruited very heavily.
Mr. Scarborough. Mr. Cummings.
Mr. Cummings. I have just a few questions.
I take it that when this 57 age limit was set, I imagine it
was done for more than one reason. They thought that the people
would not be fit to do the job at that age, and maybe it has
something to do with economics, I am not sure. In Maryland a
few years ago we increased the retirement age for judges. One
of the things that was required, if I recall correctly, was
that they had to go through a physical examination and mental
examination to try to make sure that they were fit to do the
job.
I am just trying to look at this whole picture. There is no
doubt about it, when you look at a fellow like John Glenn going
up in space and coming back and being in what appears to be
great shape, and the fact that people are living longer and
healthier lives and the fact that I am pushing 50 and not
anxious to retire from anywhere.
I am just wondering in the legislation or in the rules are
there provisions for that kind of thing? I am just trying to
make sure that those concerns are covered. I have no doubt that
there are people at 57 and 59 and 60 who can do a great job.
Mr. Traficant. My bill calls for certain standards. They
must be able to meet those standards and be tested relative to
performance, both mental and physical. But keep in mind that
the current policy that we are talking of expanding was
initiated in 1948 when the average life span and the impact on
health and performance was nowhere near the times. So we have
gone now 50-plus years, 50-plus years with a system that we
continued to maintain for a lot of reasons that I believe
cannot simply be justified.
Our bill calls for these officers must be able to meet the
standards of the younger and other employees of the division,
and must be able to perform on the level consistent with that.
Mrs. Mink. I totally agree with that. I am told by those
that I have talked to in this category that they are constantly
taking medical and physical exams to stay qualified, so I don't
tamper with that requirement at all. And for most of the ones
that I have talked to, they have joined the law enforcement
community well before age 37. They were probably 28, 30 years
of age when they started, and can take advantage of early
retirement at age 50. So if there is any problem, mental,
physical or otherwise, they are able to get out at age 50 with
20 years of service, and so that opportunity is left available
for these workers who are having difficulty maintaining
themselves. And there are all sorts of medical disability
considerations as well.
Mandatory retirement at age 65 even in many jurisdictions
for a wide variety of occupations has been discarded as
unconstitutional by the courts. Only for this community we
maintain this very strict requirement that mandates retirement
at age 57, even though you are fully qualified mentally,
physically and otherwise. I think that is unfair for those who
are able to continue to contribute. I have a long list of those
who work in my jurisdiction and the number of long distance
marathon runs they have won and all of the physical prowess
awards they have received because of their incredible physical
ability, yet they are all at that age where they are going to
be forced to retire. I think that is a dreadful loss and comes
from an archaic provision that was inserted in the law many
years ago, and should be modified.
Mr. Traficant. Fifty-seven years 1 day and not competent
and mentally unstable; well, 57 years and 1 day, where are we
at 56, 364 days? Overnight did we develop incompetent officers?
If we have an unstable officer, man or woman who is physically
or mentally impaired before age 57, they should be removed.
An officer that attains the age of 57 that 1 day, certainly
those are grounds and conditions that must be expected, but we
have gone from 1948, we now have a whole different society and
a whole different work force and I think that changes the
dynamics of the whole situation very much.
Mr. Cummings. I think Mr. Filner said it best. A lot of
things make sense. The question is whether we have the will to
do them. I want to thank all of you for what you have said, and
we are going to do our best to come up with a reasonable
solution to this problem. Thank you.
Mr. Scarborough. Thank you, Mr. Cummings. Just quickly, one
last issue. Representative Traficant said that he had fitness
standards.
Do you have fitness standards in your bill?
Mrs. Mink. No. I can make a change.
Mr. Traficant. I simply make a change on that day. I don't
know if we asked for qualifications of firearms, and I might be
mistaken. That would be additional language that the committee
could insert, more of an oversight.
Mr. Scarborough. I certainly appreciate all of your
interest in this. Obviously I see the Capitol Police officers
day to day and the great job that they do.
I understand, Mr. Filner, living out in San Diego you
certainly see day in and day out the great men and women who do
such a great job. We certainly want to do everything that we
can. We have to make sure that we move forward in a way that we
can afford, and also a way that does not discriminate against
other people that are already there. We do not want to force
one class of people out to help another class. It is going to
take us all getting together and walking through it, but I do
think that it can be done. We appreciate your taking time out
of your busy schedules.
Let us call up the second panel. Hopefully we can get some
testimony from our second panel before we have to go vote.
Our next panel includes Mr. William E. Flynn, Associate
Director, Retirement and Insurance Services, Office of
Personnel Management. OPM has primary responsibility for
management of the Federal retirement systems, and the agency
harbors the government's institutional knowledge about the
coverage of this enhanced retirement benefit.
Ms. Kay Frances Dolan, Deputy Assistant Secretary for Human
Resources, Department of the Treasury. Treasury would face the
major effects of these proposals, since more than 16,000 of its
employees would gain extended coverage if these bills were
enacted.
Our third witness is Mr. John Vail, Deputy Assistant
Attorney General for Management, Department of Justice. DOJ
would also face major work force changes if law enforcement
retirement coverage were extended to assistant U.S. attorneys,
Immigration Inspectors and DEA Diversion Inspection
Investigators.
Welcome all three of you here and thank you for coming to
testify.
[Witnesses sworn.]
Mr. Scarborough. Mr. Flynn, welcome back. I have the
feeling that you are going to say something that somebody
agrees with on our staff because I don't know if you noticed
your introduction, it says that OPM has primary responsibility
and the agency harbors the government's institutional knowledge
about the coverage of this enhanced retirement benefits.
Mr. Flynn. Thank you, Mr. Chairman.
Mr. Scarborough. I think that is the kindest introduction
that you have ever received. Certainly much kinder than any
introduction John Mica ever gave to you.
STATEMENTS OF WILLIAM E. FLYNN, ASSOCIATE DIRECTOR, RETIREMENT
AND INSURANCE SERVICES, OFFICE OF PERSONNEL MANAGEMENT; KAY
FRANCES DOLAN, DEPUTY ASSISTANT SECRETARY FOR HUMAN RESOURCES,
DEPARTMENT OF THE TREASURY; AND JOHN VAIL, DEPUTY ASSISTANT
ATTORNEY GENERAL FOR MANAGEMENT, DEPARTMENT OF JUSTICE
Mr. Flynn. Thank you very much. Speaking of harboring
institutional knowledge, I was listening to the earlier panel,
and of course have read the prepared testimony of others, and
was thinking to myself that knowing what I know today, I sure
wish I was around in 1947 when this thing got started; we might
have gotten off on a different path.
I appreciate the opportunity to be here today to talk about
special retirement provisions for law enforcement officers,
firefighters and other special groups. As you know, Federal
employees who perform these functions, like Federal employees
everywhere, make many contributions to the Nation's welfare. As
we discuss the desire by some groups to come under the special
retirement provisions or otherwise modify them, I think it is
important to emphasize that our views on that topic are not
intended in any way to diminish the worth and importance of the
contributions made by those who are seeking an enhanced
retirement benefit.
Now, as has been said this morning, Mr. Chairman, special
requirement provisions were first enacted in 1947 for special
agents of the FBI, and over the years the provisions have been
modified on a number of occasions. Groups have been added,
including criminal investigators, prison guards, Capitol
Police, air traffic controllers and, more recently, nuclear
couriers at the DOE. These provisions exist to make it possible
for the government to maintain the young and vigorous work
force in occupations requiring such employees. Special
provisions have never been intended to reward or compensate
employees for performing a certain type of work.
In most situations, the most effective way to recognize
special factors associated with work is in the pay setting
process itself. In this regard, it is noteworthy that prior to
1974 the benefit computation for these special groups was only
marginally more generous than the regular retirement formula.
The more liberal current formula was only added to the law in
order to enable the affected individuals who were subject to
mandatory retirement to retire without experiencing economic
hardship.
Now, for a variety of reasons, the evolution of decisions
granting special retirement coverage has created some
situations that appear to have departed from the fundamental
human resource management concerns that I have just mentioned.
As a result, some coverage decisions are not always consistent
and are regarded in some cases as inequitable. While attempts
have been made to create consistency, even these efforts can in
some cases create anomalous results. All of this has
contributed to some confusion regarding eligibility, and that
in turn naturally tends to create a situation where the primary
reasons for establishing the provisions in the first place
become further clouded.
Mr. Chairman recognizes this, and you have raised a number
of questions related to those fundamental human resource
issues. We agree that greater attention to these issues is
needed. Without fully analyzing the underlying rationale for
granting coverage or otherwise changing the provisions
themselves, we run the risk of creating a situation where the
government unnecessarily assumes added benefit costs.
Matters to be considered have already been mentioned:
recruitment, retention, physical and mental demands of
employment, and many other factors. While your letter asks a
number of questions in these areas, we do believe that more
study and analysis is needed to provide useful answers,
particularly in the context of the specific changes you have
under consideration.
One more point that I think is important to make, and that
is that once those decisions have been made, we believe that it
is essential that funding accompany any of them. It is
important that prospective costs be financed as they are
incurred and that provisions be established for the additional
costs of benefits resulting from a change in the treatment of
prior service. To create an expense without providing a funding
mechanism fails to place responsibility for those costs where
they belong and requires them to be addressed in the future.
The current dynamic normal cost of requirement is 11\1/2\
percent for regular employees under the Federal Retirement
System, and 24.6 percent for law enforcement officers,
firefighters and others covered under the special retirement
provisions. In the Civil Service Retirement System, the
comparable figures are 24.2 percent and 40 percent.
Now, obviously the rates are higher because of the enhanced
benefit structure and earlier eligibility for retirement.
Moreover, it is important to understand that the rates fund
only the cost of the service to which they apply and do not
fund credit for prior service.
Now, Mr. Chairman, you requested an estimate of what it
would cost to cover all of the groups seeking inclusion today.
A few months ago, our actuary's office prepared such an
estimate. While some of the underlying assumptions are not
quite current, I think the analysis will satisfy our purposes
today. The groups that we looked at included police, guards,
other than those who are currently covered, Inspectors at the
Immigration and Naturalization Service, Customs Inspectors,
park rangers, Alcohol, Tobacco and Firearm Inspectors and a few
other groups.
To include such groups with credit for past service would
add about $1\1/2\ billion to the underfunded liabilities of the
retirement fund. Now that estimate already takes into account
the additional cost to employing agencies of retirement
deductions at the higher contribution rates. In other words, to
bring all of these groups in would cost $1\1/2\ billion plus
the future additional employing agency employee contributions
at the higher rates.
I think that pretty well concludes my opening statement,
Mr. Chairman. I would be happy to answer any questions you may
have.
Mr. Scarborough. Thank you, Mr. Flynn.
[The prepared statement of Mr. Flynn follows:]
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Mr. Scarborough. Ms. Dolan.
Ms. Dolan. Mr. Chairman and members of the subcommittee, I
am pleased to speak concerning H.R. 1228, a bill to extend law
enforcement retirement benefits to certain occupations within
the Treasury Department. As you know, the Department is
comprised of 14 bureaus whose missions range from drug
interdiction to international finance. The Department is
committed to supporting every occupation in carrying out its
mission while managing resources in a responsible manner. In my
position as Chief Human Resources Executive for the Department,
let me assure you that Treasury management takes a great
interest in the welfare of our employees, and we strive to
ensure that employees receive the maximum value from the
available benefits package.
Both the Civil Service Retirement System and the Federal
Employees Retirement System provide enhanced retirement
benefits for certain classes of employees, including Federal
law enforcement officers. These special retirement provisions,
often known as 6(c) coverage, allow these classes of employees
to retire earlier than other employees and were created because
of a belief that the strenuous physical requirements of these
positions mandate a young and vigorous work force.
The law also provides for a mandatory retirement age and
the authority of agency heads to set a maximum entry age for
appointment. Treasury has a maximum entry age and reentry age
of age 37. Law enforcement officers are also granted other
benefits such as higher entry level pay and higher rates of pay
in some localities. The current statute does not specify the
positions eligible for this enhanced retirement benefit.
Rather, it defines a law enforcement officer as someone who
primarily investigates, apprehends, or detains individuals
suspected or convicted of criminal offenses. For the most part,
this has been defined as positions falling within the criminal
investigator or GS-1811 series.
Of the 127,000 full-time Treasury employees, more than
11,000 are GS-1811s or others covered under the special law
enforcement retirement provisions. H.R. 1228 proposes extending
law enforcement retirement benefits to nine specific
occupational categories with Treasury: Customs Inspectors,
Customs Canine Enforcement Officers, Customs Operations
Enforcement Officers, Customs Detection System Specialists
Airborne, Customs Flight Engineers, Police Officers from the
Bureau of Engraving and Printing, Secret Service Special
Officers and IRS Revenue Officers.
There are approximately 16,000 employees in these nine
occupations. Under current statute, these occupations are not
covered.
H.R. 1228 would change this by expanding these enhanced
retirement benefits to a larger number of employees. The
administration is in the process of reviewing the complex
nature of compensation for law enforcement and, in particular,
port of entry inspectors. This review is not yet complete, and
therefore we cannot support extending law enforcement coverage
at this time.
In addition, extending this coverage has significant
budgetary impact which must be considered in making any
determination to extend these special benefits. Enhanced law
enforcement benefits cost employing agencies and the retirement
fund more than regular employee benefits. In March 1998, the
Treasury Office of Inspector General published an analysis of
the costs associated with granting law enforcement retirement
benefits to 8,000 Customs Inspectors and Canine Enforcement
Officers. This detailed analysis has been submitted to the
committee for its review.
The annual increased cost for such coverage would be
approximately $75 million per year. If retroactive retirement
service credit is granted, that would create an unfunded
liability of $538 million. Again these figures are based on an
analysis of approximately 8,000 employees. And since H.R. 1228
covers about 16,000 Treasury employees, we could expect the
cost to be roughly double, or $150 million per year, which will
increase over time and create, if retroactive retirement
service credit is granted, an unfunded liability of $1 billion.
We haven't had time between the notice of the hearing and
today's hearing to do a detailed analysis using the IG model,
but we would be happy to do so and report the cost to the
committee within 45 days.
Simply stated, we don't have the budgetary resources
necessary to cover these costs. Because of the current
statutory spending caps that were outlined in the 1997 budget
agreement, the resources to pay for extending this coverage
would have to be taken from other areas, and the resulting
consequences need to be carefully thought through. Let me
reiterate that the Department fully supports its work force and
I believe this is evident in the caliber of the work we do and
the people we employ.
The current statute established a standard for determining
which positions are eligible. Changes to the statute by
including a broader and more diverse range of occupations will
have significant budgetary impact, with possible related but
unintended consequences, requiring careful consideration.
Thank you for the opportunity to appear before you today. I
would be happy to answer any questions you may have.
Mr. Scarborough. Thank you very much for your testimony.
[The prepared statement of Ms. Dolan follows:]
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Mr. Scarborough. Mr. Vail.
Mr. Vail. Mr. Chairman, thank you for the opportunity to
testify about the Department of Justice's views on law
enforcement retirement coverage for several classes of
Department employees. With respect to H.R. 1228 and Immigration
Inspectors, the Department views this legislation as part of an
overall effort to ensure that Federal employees in border
control positions with similar duties receive equivalent pay
and other benefits. While we understand that this is an area of
significant interest to Immigration Inspectors and the
Immigration and Naturalization Service, it is also a complex
issue that requires detailed planning and coordination among
Federal agencies. As a result, the administration is studying
the issue of parity in pay and benefits, and further work will
be required before all of the policy questions raised by this
matter can be resolved. Until that time, the Department cannot
endorse amending title 5 to provide law enforcement retirement
coverage to Immigration Inspectors.
The DEA Diversion Investigators play a vital role in the
Nation's antidrug efforts by conducting regulatory
investigations to detect the diversion of legal, controlled
substances into the illicit drug markets. However, it is our
view that they do not perform front line law enforcement
duties, and the Department cannot support extending law
enforcement retirement coverage to Diversion Investigators.
They do not carry weapons or have the authority to execute
arrest search warrants. They do not conduct surveillance or
undercover work of any kind and they are not required to
maintain a high level of physical fitness.
Like my colleagues, I am also concerned about the fiscal
impacts of extending law enforcement coverage to this class of
employees. We estimate that it would cost the Department about
$2.8 million in fiscal year 2000 to prospectively implement law
enforcement coverage, while retroactive law enforcement
coverage would cost more than $30 million. We have not
requested and do not anticipate funding for these potential
obligations in the Department's fiscal year 2000 budget, and
for these reasons we cannot endorse law enforcement retirement
coverage for Diversion Investigators.
With respect to H.R. 583, the Department recognizes that
assistant U.S. attorneys are hardworking, dedicated employees
whose jobs are increasingly demanding and sometimes dangerous.
Indeed, some assistant U.S. attorneys have received threats
against their lives and against their families. We appreciate
that some assistant U.S. attorneys confront greater risk in
their jobs than other lawyers in the Department or elsewhere in
the government.
However, we do not believe that law enforcement retirement
coverage is appropriate for assistant U.S. attorneys. As
counsel for the United States, they do not perform the kind of
front line law enforcement duties anticipated by the statute.
Assistant U.S. attorneys do not carry weapons as part of their
duties. They do not have the authority to execute arrest or
search warrants or conduct surveillance work and they are not
required to maintain any level of physical fitness.
Furthermore, the law enforcement coverage for assistant U.S.
attorneys could significantly alter our work force. Current law
enforcement retirement provisions would require the immediate
mandatory retirement of more than 80 seasoned assistant U.S.
attorneys, and would give more than 400 the opportunity to
retire on an immediate annuity, resulting in the potential loss
of more than 500 highly skilled assistants. Applying physical
standards could deprive the Department and the United States of
the outstanding services of assistant U.S. attorneys and
applicants with physical disabilities.
Finally, law enforcement coverage for assistant U.S.
attorneys would be costly. The proposal in H.R. 583 would cost
the U.S. attorneys' appropriation more than one-half billion in
the first year, $300 million to pay retroactive employer and
employee contributions to the requirement system as required by
section 3(e)(2) of the bill, $220 million in interest, and $60
million for the first annual agency contribution; the last, a
cost which would recur every year. For these reasons, we cannot
endorse law enforcement coverage for assistant U.S. attorneys.
In conclusion, I thank the subcommittee for giving the
Department of Justice the opportunity to testify on this
matter, and I will be happy to answer any questions you may
have.
Mr. Scarborough. Thank you for your testimony.
[The prepared statement of Mr. Vail follows:]
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Mr. Scarborough. Let me start with some questions regarding
some data that OPM has given us. They have given us
considerable data on the occupations that are covered by these
proposals before us.
The data that they have given us show few difficulties in
hiring of these categories, lower than average rate of
attrition, and minor movement from occupations not covered by
the enhanced retirement benefit to the jobs that are covered.
So I guess my question is: In your studies do you find that
your agencies have difficulty recruiting and retaining
employees in the employment classifications that are being
proposed for enhanced retirement benefits? Do you see that
there is a serious problem that needs to be addressed?
Mr. Vail. I will be happy to answer, Mr. Chairman.
In the Department of Justice, as a general rule we have
very little difficulty in recruiting for assistant U.S.
attorneys, and I don't believe that there is any difficulty in
recruiting for Diversion Investigators within the Drug
Enforcement Administration.
There were certain data, or allusions were made in earlier
testimony to the loss of Immigration Inspectors to other
occupations, and indeed that is a fact. I think we are
fortunate that most of those losses are within the Department
and within the Immigration and Naturalization Service, but it
certainly is true that there are some Immigration Inspectors
who want to leave that occupation because of the absence of
this benefit.
But at this point, as I say, while Department leadership
has been supportive of law enforcement coverage for Immigration
Inspectors, we recognize the need to deal with Treasury and
other agencies which have border enforcement personnel and we
simply cannot set the cost factors aside.
Ms. Dolan. From the standpoint of Treasury, there might be
one or two exceptions among the 9 occupations, but in general
these occupations would not be characterized as ones that are
particularly difficult to recruit for, nor that have unusual
retention problems.
Mr. Scarborough. Mr. Flynn.
Mr. Flynn. I think, Mr. Chairman, we have provided the
aggregate information, and the testimony of the two witnesses,
I think, breaks that down a little bit and makes it more
understandable.
Mr. Scarborough. You have testified that granting law
enforcement retirement to various groups would be very costly.
Mr. Flynn and Ms. Dolan have estimated that it would exceed $1
billion. Ms. Dolan, the subcommittee accepts your offer to
provide a more detailed estimate. It will be helpful to have
that, and so we will leave the record open 45 days for you to
forward that to us.
What kind of impact would the costs have on Federal
personnel generally, and in the Treasury and Justice
Departments in particular?
Mr. Vail. I would like to address the issue of coverage for
assistant U.S. attorneys. We have indicated the one time cost
of providing the retroactive benefit that this bill would
provide is I think in the neighborhood of $600 million. That is
approximately half of the appropriation for the U.S. attorneys
in any given year.
The additional benefit would also require ongoing costs.
Our first-year estimate for additional contributions of
approximately $60 million, which would have a significant
effect on the ability of the U.S. attorneys to carry out their
operations.
The Diversion Investigator impact, because Diversion
Investigators represent a much smaller portion of the Drug
Enforcement Administration, would be a less dramatic cost but
certainly a concern. And as I have indicated, we are in the
process of studying, along with the Department of Treasury and
OMB, the impact of the cost of extending retirement coverage to
Immigration Inspectors.
Ms. Dolan. From Treasury's perspective, as Mr. Vail said,
we are engaged in a study right now to look at the compensation
package particularly for the Inspectors. The largest cost
clearly is in the unfunded liability. We have not had
discussions about how that cost might be met. The annual cost
is also large and we have not identified the necessary offsets,
as I testified, for that. So the costs are considerable and
that is part of the review that we are engaged in.
Mr. Scarborough. Mr. Vail, did you say that the $600
million that this would cost is half of what your annual
appropriation is?
Mr. Vail. For the U.S. attorneys, that is correct.
Mr. Scarborough. That is quite a mountain to climb.
Mr. Vail. That is the one-time cost for providing
retroactive coverage as the bill requires.
Mr. Scarborough. Right. All right. A few months ago at a
legislative hearing that we had for a bill to improve
participation in the Thrift Savings Plan--we had to include
provisions to offset some mandatory cost effects--and the cost
of that bill over 5 years was only a total of $35 million
governmentwide. That is $35 million spread out over 5 years
covering all agencies. At the time, employees unions argued
that it would cause RIFs. If you want to use that sort of
logic, let me ask you by their logic how many RIFs would be
caused by the proposals that we have discussed today?
Mr. Vail. I don't know that we can provide an answer, Mr.
Chairman. There are any number of tools, if an agency had to
absorb a cost like this, that the agency would look at in terms
of absorbing $60 million or $2 million or whatever the effect
on the individual appropriation was.
Personnel reductions would be one of those. There would be
other areas that the agencies would have to look at as well.
Mr. Scarborough. Ms. Dolan.
Ms. Dolan. A reduction in force would certainly not be a
route that Treasury would want to embark on. The costs of a
reduction in force I know have been studied by GAO very
recently and they say you can actually end up spending more
than you save. So a reduction in force is very, very
disruptive, and you have to lose more people than you need to
in the short run in order to make long-term savings.
Mr. Scarborough. If the employees unions stood up and
screamed about $35 million spread over 5 years over all
agencies, and that was something that they opposed, I find it
interesting that they are supporting these proposals that will,
if fully implemented, cost over $1 billion and will be
devastating. And don't tell me that it is not going to cause a
lot of RIFs because it is if it happens. There will be winners
in these proposals, but there will definitely be losers unless
we decide to spend an awful lot more money over the coming
years.
Let me ask one final question and then turn it over to Mr.
Cummings.
Each of you have said that the question who should be
covered by law enforcement coverage is a complex one that is
being reviewed right now by the administration. When did the
administration begin the review, and when will it be completed?
What is your agency's role in that review and what factors are
you analyzing in the study?
Ms. Dolan. We were just looking at each other trying to
remember when it started.
Mr. Scarborough. 1947.
Ms. Dolan. The current one. About a year ago?
Mr. Vail. Yes. We have been involved, to the best of my
recollection, since the last appropriation cycle, Mr. Chairman,
and have been working particularly with respect to the issue of
Immigration Inspectors. Our review has not included Diversion
Investigators or assistant U.S. attorneys. Those are not
classes of employees that we have considered as potentially
subject to the retirement coverage.
In terms of the potential timing of the outcome, I don't
think that I can answer the question, I am sorry.
Ms. Dolan. Yes, I think we would need to defer to OMB as to
when it will be completed.
Mr. Scarborough. OPM, when will it be completed?
Mr. Flynn. I think Ms. Dolan's reference is to OMB, an
organization I cannot speak for. I would simply add, Mr.
Chairman, that in addition to the occupations that are under
consideration at both Treasury and the Department of Justice, a
number of other agencies employ individuals who have sought
this or similar kinds of treatment for groups of their
employees that we are engaged in discussions with as well.
These are important issues. It is interesting. Each
occupation presents its own set of considerations and concerns.
Likewise, I can't tell you when we will complete that, but we
are working with the individual agencies with an eye toward
reaching some resolution of this matter that works.
Mr. Scarborough. Thank you. Mr. Cummings.
Mr. Cummings. Mr. Flynn, give me your opinion on this 57
age increase with regard to mandatory retirement.
Mr. Flynn. Thank you, Mr. Cummings, for asking. It was
stated by the early panel that mandatory retirement age at 57
came about in 1947 or 1948. It was actually in 1974, if I have
this correctly. So that mandatory retirement age, while it is
now 20 some years ago, is not 50-some years as you may have
come to the conclusion from listening to the earlier testimony.
This is one of these very complex areas. If you think about
the fundamental underpinning for the basis for this type of
enhanced retirement coverage, young, vigorous, relatively
healthy, mentally and physically agile work force, and the fact
that the higher retirement accrual rates are there precisely
for the purpose of making sure that people have income security
in their retirement years, albeit they retire sooner than
others, to then come back and today look at the mandatory
retirement age and suggest that it should be limited
altogether, raised, what have you, a lot of different
proposals, begins to question that very foundation that
underlies the retirement credit in the first place. That is
what makes this issue so complicated and complex.
I think that is just one of the factors that we are going
to have to take into consideration, but the raising of the
minimum retirement age, with the single exception perhaps of
aligning the mandatory retirement age for firefighters with the
general retirement age of 57 for others, is something that is
quite complicated and will take more study.
Mr. Cummings. If you can change one aspect of the current
retirement benefit, what would that be?
Mr. Flynn. Well, I think, Mr. Cummings, one of the things
that has proved especially difficult in the evolution of
retirement coverage with this particular type of situation is
the fact that over the years, unlike position classification
decisions that are made in terms of grade levels that also
control compensation, there has been a tendency to regard
retirement coverage as a matter of entitlement that is subject
to external appeal and even review under the Federal courts.
If you think of this for a moment, that what we were trying
to do in 1947 and throughout has been to make the right human
resource decision with respect to a group of individuals
aligned with what an agency is trying to do strategically in
terms of the work of the Nation, I think you begin to regard
this as first a human resource decision that can and should be
made administratively.
Part of the difficulty that I think we have seen over the
years has been the evolution of this into an issue of
entitlement rather than an issue of how organizations get their
jobs done well and compensate their people fairly. So that is
probably the area of change, if I were back in 1947, I might
offer a few suggestions on.
Mr. Cummings. Back in 1993 when the Post Office and Civil
Service Committee held a hearing on OPM's recommendations for
new pay and job evaluation for Federal law enforcement folks,
were any of those recommendations implemented?
Mr. Flynn. If you don't mind, Mr. Cummings, I will have to
go back and respond to that for the record. This predates my
arrival in this area and I am sure that we have a good answer
for that, but if you don't mind I would like to check on that.
Mr. Cummings. No problem. Thank you.
Mr. Scarborough. Thank you, Mr. Cummings. We certainly
appreciate you three testifying, and you certainly have given
us some insight regarding the difficulties we face. Thank you,
and we will be in recess until after the vote.
[Recess.]
Mr. Scarborough. We will begin the third panel now, and on
the third panel we have Ms. Colleen Kelley who is newly elected
national president of the National Treasury Employees Union,
her organization represents many of the employees who are
seeking the enhanced retirement coverage. She will be followed
by Mr. Gilbert Gallegos, national president of the Fraternal
Order of Police, and Mr. Peter J. Ferrara, chief economist,
Americans for Tax Reform, an organization concerned about
public expenditures at all levels.
As with all of our hearings, the record will remain open
for 2 weeks to provide the submission of additional comments.
Let me ask if our panelists will rise and take the oath.
[Witnesses sworn.]
Mr. Scarborough. Ms. Kelley, we will begin with you.
STATEMENTS OF COLLEEN M. KELLEY, NATIONAL PRESIDENT, NATIONAL
TREASURY EMPLOYEES UNION; PETER J. FERRARA, CHIEF ECONOMIST,
AMERICANS FOR TAX REFORM; AND GILBERT G. GALLEGOS, NATIONAL
PRESIDENT, FRATERNAL ORDER OF POLICE
Ms. Kelley. Thank you. Chairman Scarborough, my name is
Colleen Kelley, and as you mentioned I am the newly elected
national president of the National Treasury Employees Union. I
was elected in August and I am very pleased that my first
appearance in Congress is before your subcommittee to offer
NTEU's strong support for 20-year retirement for U.S. Customs
Inspectors and Canine Enforcement Officers as well as Revenue
Officers of the IRS. These men and women put themselves in
harm's way every day to uphold the laws passed by Congress.
They are subject to the same perils, meet the same rigorous job
standards and rely on the same investigative skills and
techniques as other law enforcement officers who enjoy the
significant benefits of law enforcement retirement, yet they do
not receive these benefits. Common sense and simple justice
demand an end to this inequity.
I know that Congressman Filner already introduced Customs
Inspector Robert Labrada, but I would like to again recognize
him and his fellow Inspector, Nicholas Lira, who were victims
of a violent gun attack in April 1997. The horrifying scene of
their attack was captured on the surveillance cameras at the
Calexico port that day.
I have provided each subcommittee member with a video copy
of the tape from that day. I urge each of you to watch the
videotape and to ask yourself whether you think that Inspectors
Labrada and Lira should be denied the benefits that other law
enforcement officers enjoy. I ask the committee to ask what
Congressman Filner already did. The irony, if Inspector Labrada
had been killed that day in April 1997, his name would have
been added to the wall at the National Law Enforcement Memorial
here in Washington, DC. He would have been added as a Federal
law enforcement officer who was slain in the line of duty. But
in life he is denied the title and the benefits that befit that
job.
Customs Inspectors and CEOs, Canine Enforcement Officers,
make up our Nation's first line of defense on the war on drugs.
The Customs Service continues to seize more illegal narcotics
than any other Federal agencies combined, and Inspectors and
CEOs seize more than any Customs employees. They are required
to undergo training at the Federal Law Enforcement Training
Center, where they must learn criminal law, arrest authority
and techniques, self-defense tactics, frisk and pat down
procedures, handcuffing and takedown techniques, antiterrorism
and firearms use.
Inspectors carry guns and are required to qualify on the
firing range three times a year. In the course of fighting the
war on drugs, these men and women have been shot at, beaten,
kicked and dragged behind cars. Sadly, 23 Customs Inspectors
have been killed in the line of duty. Customs Commissioner
Raymond Kelly recognizes the dedication of Customs Inspectors
and CEOs, and he told me just yesterday that he personally
supports law enforcement status for these dedicated men and
women.
The job of the IRS Revenue Officer is also one of the most
hazardous in the Federal Government. Revenue Officers are
required to call on delinquent taxpayers from crime-ridden city
neighborhoods to remote and isolated rural areas. They have
been held hostage, attacked by dogs, hit by cars, threatened
with guns and knives, tire irons and bombs. Delinquent
taxpayers are sometimes in very desperate financial or legal
trouble. The neighbors and families of delinquent taxpayers
have also threatened to shoot Revenue Officers if they don't
leave the premises.
Revenue Officers must collect from drug dealers, organized
crime figures and tax protesters. Many of these groups advocate
violence against the IRS. One RO told me about the time he
visited a taxpayer's home and saw a sign in the window that
read ``IRS personnel shot on sight.''
All revenue officers can tell you about the times that they
feared for their lives. In 1997 we asked ROs to describe these
experiences. I would like the subcommittee's permission to have
some of these responses included in the record. I have a
package of these here, if I can do that.
Mr. Scarborough. Without objection, that is fine.
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Ms. Kelley. Thank you. They are truly indicative of he
magnitude of physical danger that Revenue Officers are exposed
to every day on the job. The adversarial nature of the Revenue
Officer/delinquent taxpayer relationship means that danger and
confrontation are part of their daily routine. These stresses
can be exacerbated with age and lead to physical problems
including high blood pressure, insomnia, depression and even
suicide. The nature and hazards of these jobs clearly support a
20-year retirement benefit for revenue officers.
When law enforcement officers from different agencies join
forces on a drug raid or search a boat for armed smugglers,
Customs Inspectors and CEOs are often the only officers on the
scene who are not eligible for law enforcement retirement. They
are haunted by the same risk of death or injury, but when it
comes to inferior benefits, the Customs Inspectors and CEOs
stand-alone.
Revenue Officers of the IRS are subjected to the same gross
inequities when they join with law officers from other Federal
agencies and their State and local counterparts on dangerous
and risky operations. These dedicated men and women are united
by the violence and the threats that they bravely endure. But
when it comes to retirement benefits, the revenue officers go
to the back of the line.
I ask this subcommittee to consider the sacrifices that
Inspector Labrada and thousands of others like him have made to
enforce the laws of our country and to provide them with the
benefits that they deserve by passing H.R. 1228. Thank you very
much.
Mr. Scarborough. Thank you Ms. Kelley.
[The prepared statement of Ms. Kelley follows:]
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Mr. Scarborough. Mr. Gallegos.
Mr. Gallegos. Thank you, Mr. Chairman. My name is Gilbert
Gallegos and I am the national president of the Fraternal Order
of Police; and with more than 283,000 members, we are the
largest organization of law enforcement professionals in the
Nation. I am here to bring to your attention the concerns of
the more than 25,000 Federal officers who are members of our
organization regarding the issue of law enforcement retirement.
The issue of who is and who is not a law enforcement
officer for retirement purposes is a source of great confusion
for the tens of thousands of police officers employed by the
Federal Government. For them, law enforcement status is not
about bigger paychecks or enhanced benefits but about achieving
parity with their fellow officers. And it was interesting to be
here earlier when I heard the administration bureaucrats talk
about further study, and I urge what we need is not further
study but action on H.R. 1228. That is what we really need.
I also serve as a commissioner on the Commission for the
Advancement of Federal Law Enforcement. I am not speaking today
on behalf of the Commission, but in the last 2 years of the
study that we have been doing that will be reported at the end
of the month to Congress, I have never in my life seen such a
mishmash of how police agencies operate as in the Federal
Government. I come from the local agency, and if we operated in
this way, we would be out of business. And I think it is all
about parity.
In a local law enforcement agency like Pensacola or
Tallahassee, the backbone of those departments are the
uniformed police officers. If you have any chief of police with
any integrity, they will tell you that the backbone of their
Department is the front line uniformed officer. That is the way
that I was taught, and I have always thought that way. In the
Federal system we treat them differently. And I think it is the
reverse.
I think we have to do something, and H.R. 1228 is the first
step to deal with that and ensure that these uniformed officers
are treated fairly. We know that the problems exist. We know
that there is an increase in both domestic and international
terrorism and that there are definite threats to the employees
of the Federal Government and its facilities. We also know that
the uniformed officer is the first line of defense to protect
employees in the facilities of the Federal Government.
I am not here to argue that security guards should be
entitled to 20-year retirement, but they are not viewed as law
enforcement and they don't meet the definition of a law
enforcement officer. That means the people who make arrests,
have the authority to make arrests, conduct investigations,
wear a uniform and can take action. That is the difference
between a law enforcement officer and a security guard.
The majority of the officers who do not receive law
enforcement officer status are GS-083's in the executive branch
of the Federal Officer System.
The way that I look at it is if you look at a Pensacola
police officer, whether he is a uniformed officer or a school
resource officer or an investigator, each position has the same
retirement. They are not treated any differently. You go to any
State or local agency and it is the same way. I think that is
really the problem with the system that we have within the
Federal Government.
The duties that we have talked about--the right to make an
arrest, carry firearms, advise suspects of the Miranda rights,
conduct criminal investigations--does not take into account the
full scope of what the uniformed officers' job is all about.
Customs Inspectors and Immigration Inspectors have also
consistently been denied the additional retirement benefit. It
is time that this changes, because the duties that a Federal
uniformed officer performs, is the same as what 99 percent of
the law enforcement officers do at the local level all across
the country; but yet, Federal officers are treated differently.
The OPM bureaucrats talked about a study completed in 1993,
and a subsequent plan to establish a new pay and job evaluation
system for Federal law enforcement officers. That is why I say
it is not time to study, it is time to act. And that is what we
would try to encourage you, Mr. Chairman, to do.
The Merit Systems Protection Board has been extremely
active in deciding on a case-by-case basis as to what qualifies
an employee for enforcement officer and retirement status. If
the present situation stays in place, as some people have
advocated, you are going to see more and more cases going to
the Merit Systems Protection Board. Already in California and
in Virginia, the Board has ruled against the different agencies
and said you have to give these officers 20-year retirement. If
Congressman Filner's legislation does not become law, you are
going to see more and more such appeals.
We also heard about cost this morning, and I challenge the
Congress to really set aside this issue and consider the
importance of public safety. I think that is the fundamental
question: Do we want qualified officers, officers who are
physically fit, officers who can at age 60 perform the same job
as when they were age 30? And, believe me, I have been a cop
since 1964. I am 55 years old, and I cannot do the same things
I could as a 25-, 30-year-old police officer, and I challenge
any Federal officer to say otherwise.
What they can say is ``extend the mandatory retirement age
and we can still do the job,'' and I challenge that because I
don't believe it. I know in my own case I cannot do the same
job as I did as a young patrol officer. It is a young person's
profession. It has to be kept that way, and everyone has to be
treated the same. And unfortunately under this system, we don't
treat everyone the same.
I agree with what was said earlier when Congressman
Traficant said certain people apply for exceptions to the rule
at age 57 retirement. Some get it and some don't. I think that
something has to be done to make it equitable, and I think that
is the challenge for this subcommittee, to make sure that
everyone is treated equitably and that is what I would implore
you to do.
In the end, I think it comes down to the tradeoff of do we
want a professional law enforcement group of uniformed officers
or do we want security guards. And I think the American people
and you in the Congress, and in the administration, want
professional law enforcement officers, so we have to set aside
the cost. And if agencies are unable to fill their staffing
levels, I say that is poor planning, because if State and local
agencies can do it, I am sure that the Federal system can.
The Department that I came from, we knew 2 to 3 years ahead
of time how many people we had to plan for in retirement and
how many we had to hire to replace those officers. State and
local agencies do it all the time. Why can't the Federal
Government? I don't think that the will has been there. Now we
have to pass H.R. 1228, and I think that will be a big step in
providing equity to the uniformed officers who are really the
backbone of the Federal law enforcement system. Thank you.
Mr. Scarborough. Thank you, Mr. Gallegos, for your
persuasive testimony.
[The prepared statement of Mr. Gallegos follows:]
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Mr. Scarborough. We will now see if Mr. Ferrara is so
persuaded to set aside the cost issue.
Mr. Ferrara. Thank you, Mr. Chairman. Let me focus on a
couple of points. Ms. Kelley focused on the point that the
people she would like to expand the benefits to are, ``subject
to the same perils as other law enforcement officers.''
Well, in panel 2, the agencies themselves testified that is
not the case. They said that in each case the people they
wanted to expand the benefits to do not have the same front
line law enforcement responsibilities that these benefits were
designed for. They don't carry weapons and don't apprehend
criminals, et cetera. The agency said they are not subject to
the same perils as other law enforcement officers. And that
completely displaces the parity issue. It is not the same job
and therefore it is not the same--the same benefits should not
apply.
Despite all of the issues raised by Ms. Kelley, the
agencies also testified there is not an employment problem.
They don't have problems filling the positions or retaining
workers. And if there is not an employment problem, then from
the perspective of taxpayers, it would be totally illegitimate
to expand the pay and benefits further. We should not pay more
than necessary to recruit the qualified personnel to fulfill
these positions, and the agencies say with the current pay and
benefits, they are achieving that goal and therefore it would
be a waste of taxpayer funds to throw additional benefits on
top of what is already being spent.
So it is not an issue, as Mr. Gallegos says, do we want
professional law enforcement agents or not. We already have a
professional law enforcement force that is performing the job
quite well at the current pay and benefits. He argued that we
should set aside cost and focus on public safety. We are
already achieving the public safety goals with the current pay
and benefits. So it would be a waste of hard-earned taxpayer
dollars to throw additional pay and benefits on top of what we
are already paying that are achieving the goal.
Another point I would like to raise is let's add into this
discussion the fact that there is life after government
employment. People who retire after 20 years, they go to work
in the private sector. A perfect example is an assistant U.S.
attorney. A U.S. attorney works for 20 years and retires from
his Federal employment. He would be getting Federal employee
retirement, and he goes to work for a private law firm based on
all of the experience he had for 20 years as assistant U.S.
attorney, making much more than he ever did as assistant U.S.
attorney, and then he is getting taxpayer-funded retirement
benefits on top of that pay? I would submit that falls into the
category of waste, fraud and abuse that we have talked about as
the kind of spending that should be eliminated.
The same is true of other Federal employees. They gain
expertise as Customs Inspectors and Revenue Officers and they
go out in the private sector and utilize that expertise to earn
even more. And the idea that the taxpayer should be paying
benefits to these people who are still working and still
earning good pay in the private sector is completely
unjustifiable.
So we would argue that--we strongly oppose this legislation
and we strongly oppose expanding these benefits further. In
fact, we suggest that in any study being conducted, we need to
study the issue of what people do after they leave Federal
employment in these occupations. Do they leave Federal
employment after 20 years and find that they cannot work? Or do
they leave Federal employment after 20 years and then find that
they are gaining better jobs in the private sector? I would
submit that study would show again that this kind of pay is
unnecessary.
I also want to bring up and focus on the point that these
workers already have generous benefits in retirement. It is not
like these workers have demanding jobs and are left bereft in
retirement. We already have a more than adequate retirement
system for these workers.
My final point is that the Federal Treasury Employees Union
in their written testimony suggested that we should forego the
tax cut that the Congress recently passed and instead use the
money for higher pay and benefits for the employees they
represent.
I would submit that this proposed legislation is in fact a
good argument for a tax cut. It shows if we don't cut taxes, a
long line of special interests will come before Congress with
plenty of plans to spend the money. It shows the urgency to get
this money out of Washington and get it back to the taxpayers
where it belongs before it is spent on wasteful special
interest spending. Thank you very much.
Mr. Scarborough. Thank you for your subtle remarks, Mr.
Ferrara.
Mr. Ferrara. That is my job.
Mr. Scarborough. That is your job, and you are doing it
well.
[The prepared statement of Mr. Ferrara follows:]
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Mr. Scarborough. Ms. Kelley, let me ask you to touch on a
couple of points, and that is the testimony of the agencies of
the employees that you represent so well.
What do you say to those agencies whose main argument is
that they are not having problems in recruitment, they are not
having any problems retaining employees that you represent.
What is your counter to that?
Ms. Kelley. One, as far as the U.S. Customs Service goes,
they currently have a work group looking at recruitment and
retention, I believe, because they recognize that there is a
problem. Perhaps it is not as large a problem today as it may
be tomorrow, but one of the reasons that they are looking at
this is because in the last 5 years there have been over 3,000
Customs Inspectors hired. And what we are hearing anecdotally
is that the new Customs Inspectors that are being hired at the
younger ages are not staying with the Customs Service. They are
going to State and local law enforcement agencies where the 20-
year retirement is available.
While there is no study, I would encourage that the Customs
Service start tracking this issue very closely.
I would just make another comment. I unfortunately missed
the testimony of the second panel, but I would be shocked to
hear that the Customs Service said that the Customs Inspectors
and CEOs do not carry weapons. Every one of them does.
Mr. Scarborough. I want to underline a point that you made
earlier about IRS agents. I have heard from many, many IRS
agents that even work in offices, that don't go out in the
field, that they certainly do fear for their lives at times. It
is obviously something that again we need to address and some
issue. I guess the main problem today--and I certainly
understand, Mr. Gallegos, your statement about let's worry
about security first and cost later, but regrettably this year
as we move toward adjournment, we are obviously up against some
tremendous pressures regarding costs.
If the costs associated with these benefits were imposed on
the agencies--they have testified that other functions would
have to be cut back and perhaps fewer people would be hired in
the favored employment categories or the measures could result
in RIFs from the current work force levels--what effects do you
anticipate for the increase in benefits that you have supported
in your testimony today regarding RIFs or what other areas of
the agencies that you represent would have to be slashed, Mr.
Gallegos?
Mr. Gallegos. What I have seen in my experience in my own
agency in New Mexico when we had a similar situation, they red-
circled different employees so that they were not put into RIF
status--and that could easily be done with this type of
legislation--the people on the cusp, so to speak, who are in
the position of having to leave or whatever status they are in,
that there could be special provisions to account for those
until through attrition and normal retirements they can catch
up.
I think it is a challenge, and quite frankly my personal
opinion on the position of Congress and with the moneys is that
you have painted yourself into a corner by the ceiling levels
that you have set. I don't think that they are realistic, but I
understand your position on that and the position of Congress,
and I think that is a separate issue. But I do think that it is
going to cause a ripple effect on down the line.
The last point I want to make is what was testified
regarding attrition and the ability to hire people. It all
depends who you talk to. I talk to the officers, front line
supervisors, commanders, I talk to SACs of different agencies.
You talk to them and you talk to the head of Customs or the
head of DEA or the Bureau of Engraving Police, you get a
totally different picture. And they are in fact--what they tell
me is that they are having a hard time hiring people and
maintaining the manpower levels that are required. It all
depends on who you talk to. If you talk to the bureaucrats,
they will tell you one thing, and if you talk to the front line
people, they will tell you the real story.
Ms. Kelley. We realize, Mr. Chairman, there is a cost
attached to this. We do have some questions about the
methodologies used by OPM to date and by those who testified in
the second panel. We would join with Congressman Filner and
offer to work with the subcommittee on what the appropriate
costs would be and how they could be funded, because I would
like to clarify that my testimony does not suggest that all of
the tax cuts be foregone and used for this issue.
What we did suggest was that a very small piece of it would
be a wise investment for the country and what we would hope is
that while these issues are surely connected, that first the
decision would be made based on the merits of whether these men
and women should have law enforcement status, and then to
jointly work together to find the means within the budget and
without causing RIFs to make that happen. So we see that as two
pieces, but we worry that the decision is being made solely on
money and that the merit issue is not being fully discussed and
decided and that is what we would ask.
Mr. Scarborough. Mr. Ferrara, any comments on this issue?
Mr. Ferrara. Well, the bottom line is that there is a
market test here for government employment: Can you attract the
workers or not? And if--as an advocate of taxpayers, I don't
want to see the government pay any more in pay and benefits
than necessary to fill the jobs. I don't want to see any sort
of employment crisis be manufactured to justify these
additional benefits. Once it is clear that you can attract
these workers, there is no justification for higher spending.
A point that I would like to add is that the best way to
address the problem that officers face is tax reform, and maybe
Congress ought to get on with that, different types of tax
codes which would not require the same level of enforcement
burden that this one does.
Mr. Scarborough. God bless you, man. A lot more people
talked like you in 1994. He is a blast from the past, ain't he?
Mr. Ferrara. And the future.
Mr. Scarborough. I had a lot of friends who spoke like you
a few years ago. I don't know where they went.
Mr. Ferrara. They work for us now.
Mr. Scarborough. After they got defeated in 1996 and 1998.
Mr. Ferrara. Let me write that down.
Mr. Scarborough. A couple of months ago, we tried to do
some things regarding Thrift Savings Accounts, and the total
cost was something like $35 million spread out over 5 years,
very small compared to the one-time cost of possibly $600
million or over $1 billion.
The argument then by the unions was that could not be
allowed because it would cause massive RIFs in the system.
What I would like you to help square up for me today is how
employees unions could take that stance a couple of months ago,
saying if we cut $35 million, it is going to cause all of these
RIFs. And yet we have costs that may run over $1 billion, and
the argument now is that possibly no RIFs will be caused. Is it
possible to square those two arguments up?
Ms. Kelley. Mr. Chairman, I think that with work and with
time, that it is possible. I was not here a few months ago to
address the specific issue that you are referring to, but I
think there are options available. There are surely ways to
look at if it were to be determined that less employees were
needed, not just from a cost standpoint, attrition, a long-term
plan rather than an immediate reaction is one way to accomplish
that.
Another is to look at a proposal that law enforcement
status and the costs associated with it--because as we all know
you can do numbers a variety of ways and come up with a variety
of conclusions. There are ways to phase in the cost. The
current bill does suggest retroactivity and it raises the whole
question of the unfunded liability. We would like to work with
OPM on the numbers, and the subcommittee, and determine if
there is a 5- or 10-year plan to look at this.
Mr. Scarborough. Let me tell you, just like I told the
first panel and like I said earlier, we will be glad to sit
down and talk about what options are possible and look forward
to working with all of you as we move forward.
Let's talk about the question, the issue that Mr. Ferrara
brought up in his last statement regarding whether this crisis
regarding hiring and retaining and retention is actual or
manufactured. Again your agencies have said that it is not an
actual crisis, and we talked about this before. You talked
about people on the front line telling you that there were
problems with retention. Do you have any evidence, any studies
that you can bring to the committee in the next 2 to 3 weeks
that we can make as part of the record that would show that you
are having problems recruiting or retaining people in any of
these areas?
Mr. Gallegos. We can provide you that information from the
FOP.
Again, the real question comes up as to how you set up a
sensible level of staffing, and how you are going to keep that
up and how you plan for the future. That is really what any law
enforcement agency does. Through proper planning, which I don't
think that they have done at the Federal level, I think you can
address that.
The other thing, and I agree, I think you can hire anybody.
I think you can go out on the street and hire a bunch of
people, and if you just want to fill the slots, you get one
quality of people. However, if you want to have highly
professional people like we have in the Capitol Police, you
have to go after the best people available to fill those
positions.
State and local agencies are having the same problem. A lot
of local agencies are now requiring college degrees. I know
that in my agency, that is required. We are having a hard time.
We are having to compete with industry to bring in qualified
people, and I think that is what really the Federal Government
has to do. They have got to come into focus on how are they
going to attract the best people, and you do it just like the
private sector does. They have attractive packages.
You are providing a quality service now. I think the
uniformed officers do that now. The FBI, DEA, everybody else
does. I think that we can continue that. But we have got to
look at really what is facing us ahead.
Mr. Scarborough. So is your view today, as you testify
before this committee, that based on the current facts that we
have, that we do have qualified law enforcement officers across
the broad spectrum of the government, or are you concerned that
the quality is slipping now because you don't think that the
benefits package is attractive enough?
Mr. Gallegos. I have talked to high-ranking officials in
various agencies who believe that; that it is starting to slip.
I think when you are competing against the IBMs and the Intels
and everybody else, I think we have to focus on how are you
going to keep the people you have and attract new people. It is
not a matter of just filling the slots with people who are
security guards and can stand at a post and let people in or
out or whatever. These are qualified law enforcement officers
and they have to be viewed as such. When we view them seriously
like that, I think it takes on a different tone.
And it was interesting to hear Mr. Ferrara talk about
``they are here'' and ``they can stay.'' We don't have to worry
about retirements. The Emancipation Proclamation took care of
that. We don't have slave labor in the Federal work force
either, and you do have to compensate them and they do have a
life after the Federal system and they should have those
privileges to go on to other things like anybody does.
Ms. Kelley. Mr. Chairman, you had asked if there were any
studies that the agencies have. The U.S. Customs Service is
currently in the process of putting a request together that
would request special hiring authority for just this reason,
because they believe that they are running up against a lot of
problems of identifying--not identifying, but recruiting the
best and the brightest into the inspector and the CEO ranks.
Once that report is finished and available, we will be glad to
provide it to the subcommittee.
Mr. Scarborough. Let me say I have some people suggest that
another option be put on the table. Part of the concern
underlying this is what some people call the golden handcuffs.
That is, people stay in their positions long after they have
stopped advancing in their careers because they are attached to
the retirement benefits. These benefits are not portable, and
they hate to lose out on benefits earned because they didn't
invest or they are just a few years away from eligibility.
Rather than continuing to expand the golden handcuffs, these
people suggest that we begin to migrate retirement toward a
defined contribution framework. That is, move the Federal
retirement benefit into an investment account that people could
take with them wherever they went, and change careers according
to their interests rather than according to the constraints of
their retirement plans. Have you heard this suggestion and how
would you react to such a proposal?
Mr. Ferrara. Yes, I think that is a good alternative.
Instead of saying we will give you retirement benefits so you
can leave after 20 years, and we will give you this taxpayer
subsidy, what you could do is make the retirement benefits more
portable so that someone who wanted to leave after 20 years,
instead of feeling that they were locked into Federal
employment, would have a defined contribution account. In other
words, instead of the Federal Government over years would make
contributions to an account that would be invested and the
worker--whenever the worker left, he or she would take that
account with them. So after 20 years, people would be free to
take that account with them, and they would not be locked into
Federal employment when they might have better private
opportunities. The taxpayers would not have to pay any more,
but the workers could take that account and have those
attractive benefits.
I think that is a more appealing alternative. We have been
advocates of this for some time. We want to see people have
more control over their retirement resources. We have studies
which show that people can get at least as good benefits, if
not better, in terms of the final retirement benefit through
these types of plans, and they are often more fair because you
don't have this redistribution from some workers to others.
Each worker gets the money and they have the chance to
reinvest. They can get good returns in the private market. We
think that is a better way of approaching this issue. Instead
of saying after 20 years we will give you this benefit and you
can get out, say at any point you can take the money and go to
the best employment opportunity, best employment opportunity
you have.
I also want to state for the record in response to Mr.
Gallegos, I think it is clear that Federal employees are
compensated and they therefore are not slave labor and they do
have attractive retirement benefits already.
Mr. Scarborough. What do you think about the portability
concept?
Mr. Gallegos. Mr. Chairman, when you have portability, you
have to stay basically within the same class. My experience has
been if you have--let's say in the State of New Mexico, if you
are a police officer in the city of Albuquerque for 10 years
and move to Las Cruces, you carry that time and service and
those contributions with you over to the other agency. Even if
you become a public employee as a city planner or whatever
other entity that you enter in the public sector, you carry
those benefits and those contributions with you and you can
apply that toward it. So there is some portability.
I guess the question is if you are working for the Federal
Government, then you decide to go to work at Intel doing
something else, I think that is what Mr. Ferrara is speaking
to. I think you would have a lot of demands on the funding
issue and the ability for retirement funds to be solvent over
the long term. I think you would have a tremendous drain on
that. If they stay within the same class, I would argue that is
probably true.
If you are a Customs Inspector and you go to be an FBI
officer, that should be portable and counted toward that, and I
think in most cases it is.
Ms. Kelley. I was a Federal employee for 15 years with the
IRS under the CRS system. As I understand it, FERS addressed
this golden handcuffs issue when it was created and the Thrift
Savings Plan makes the Federal retirement system quite
portable. So the retirement system does not need change, that
is not the question that surrounds this law enforcement status
in our opinion.
Mr. Ferrara. Can I address those two questions briefly?
Mr. Scarborough. Sure.
Mr. Ferrara. Some other State and local jurisdictions are
starting to move toward these types of plans. In the private
sector you have had a vast switch away from defined benefit
plans to defined contribution plans so you can design this, it
has been shown, so that you do not endanger the solvency of
current retirement funds, as Mr. Gallegos suggests.
Moreover, unions that represent public employees, the
notion of portability to go to nonpublic employment is
anathema. So as long as you have portability within government
employment, there is no problem. But for the worker, there is a
problem because they may want to work in the private sector,
outside the government, and there the portability issue has not
been addressed. Particularly workers who work less than 20
years lose out on the retirement benefits and, again, a lot of
studies show that. They are greatly disadvantaged by the
traditional type of defined benefit plans like you have at the
Federal level and at most State and local governments.
So if you go to a defined contribution plan, those workers
have the same opportunity to benefit as longer-term workers,
and so it is more fair and in many cases you can expect the
benefits to be better over the long run for the longer-term
worker with standard investment performance.
Mr. Gallegos. But in most public sector retirement
programs, you pull your contribution out if you leave after 10
years and invest it into another program.
Mr. Ferrara. But not the employer's contribution. That is
the problem. That is where you lose.
Mr. Scarborough. To be continued. Well, I appreciate your
testimony. It certainly has been helpful and again I pledge
that this subcommittee and the committee overall will be glad
to work with you all, and the Members who put these bills
forward, to see what we can do.
We will keep the record open for the next 45 days so any
additional comments that you all may wish to add or any
proposals for true income tax reform that you may want to put
in that you think may make an IRS agent's life easier, feel
free to put that in the record. Thank you again, and we are
adjourned.
[Whereupon, at 12:55 p.m., the subcommittee was adjourned.]
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