<DOC>
[108th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:94772.wais]
ESPRIT DE CORPS: RECRUITING AND RETAINING AMERICA'S BEST FOR THE
FEDERAL CIVIL SERVICE, H.R. 1601, S. 129, AND H.R. 3737
=======================================================================
HEARING
before the
SUBCOMMITTEE ON CIVIL SERVICE
AND AGENCY ORGANIZATION
of the
COMMITTEE ON GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
SECOND SESSION
ON
H.R. 1601 AND S. 129
TO PROVIDE FOR REFORM RELATING TO FEDERAL EMPLOYMENT, AND FOR OTHER
PURPOSES
AND ON
H.R. 3737
TO INCREASE THE MINIMUM AND MAXIMUM RATES OF BASIC PAY PAYABLE TO
ADMINISTRATIVE LAW JUDGES, AND FOR OTHER PURPOSES
__________
FEBRUARY 11, 2004
__________
Serial No. 108-163
__________
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
______
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94-772 WASHINGTON : DC
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COMMITTEE ON GOVERNMENT REFORM
TOM DAVIS, Virginia, Chairman
DAN BURTON, Indiana HENRY A. WAXMAN, California
CHRISTOPHER SHAYS, Connecticut TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida PAUL E. KANJORSKI, Pennsylvania
MARK E. SOUDER, Indiana CAROLYN B. MALONEY, New York
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
DOUG OSE, California DENNIS J. KUCINICH, Ohio
RON LEWIS, Kentucky DANNY K. DAVIS, Illinois
JO ANN DAVIS, Virginia JOHN F. TIERNEY, Massachusetts
TODD RUSSELL PLATTS, Pennsylvania WM. LACY CLAY, Missouri
CHRIS CANNON, Utah DIANE E. WATSON, California
ADAM H. PUTNAM, Florida STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia CHRIS VAN HOLLEN, Maryland
JOHN J. DUNCAN, Jr., Tennessee LINDA T. SANCHEZ, California
NATHAN DEAL, Georgia C.A. ``DUTCH'' RUPPERSBERGER,
CANDICE S. MILLER, Michigan Maryland
TIM MURPHY, Pennsylvania ELEANOR HOLMES NORTON, District of
MICHAEL R. TURNER, Ohio Columbia
JOHN R. CARTER, Texas JIM COOPER, Tennessee
MARSHA BLACKBURN, Tennessee ------ ------
------ ------ ------
------ ------ BERNARD SANDERS, Vermont
(Independent)
Melissa Wojciak, Staff Director
David Marin, Deputy Staff Director/Communications Director
Rob Borden, Parliamentarian
Teresa Austin, Chief Clerk
Phil Barnett, Minority Chief of Staff/Chief Counsel
Subcommittee on Civil Service and Agency Organization
JO ANN DAVIS, Virginia, Chairwoman
TIM MURPHY, Pennsylvania DANNY K. DAVIS, Illinois
JOHN L. MICA, Florida MAJOR R. OWENS, New York
MARK E. SOUDER, Indiana CHRIS VAN HOLLEN, Maryland
ADAH H. PUTNAM, Florida ELEANOR HOLMES NORTON, District of
NATHAN DEAL, Georgia Columbia
MARSHA BLACKBURN, Tennessee JIM COOPER, Tennessee
Ex Officio
TOM DAVIS, Virginia HENRY A. WAXMAN, California
Ron Martinson, Staff Director
Chris Barkley, Professional Staff Member
Reid Voss, Clerk
Tania Shand, Minority Professional Staff Member
C O N T E N T S
----------
Page
Hearing held on February 11, 2004................................ 1
Texts of:
H.R. 1601................................................ 5
H.R. 3737................................................ 39
S. 129................................................... 42
Statement of:
Dugan, Kevin, vice president, Association for Administrative
Law Judges; John Gage, national president, American
Federation of Government Employees; Colleen M. Kelley,
national president, National Treasury Employees Union; and
Carl DeMaio, president, the Performance Institute.......... 117
Sanders, Ronald P., Associate Director for Strategic Human
Resources Policy, Office of Personnel Management........... 101
Letters, statements, etc., submitted for the record by:
Davis, Hon. Danny K., a Representative in Congress from the
State of Illinois, prepared statement of................... 98
Davis, Hon. Jo Ann, a Representative in Congress from the
State of Virginia, prepared statement of................... 3
DeMaio, Carl, president, the Performance Institute, prepared
statement of............................................... 182
Dugan, Kevin, vice president, Association for Administrative
Law Judges, prepared statement of.......................... 119
Gage, John, national president, American Federation of
Government Employees, prepared statement of................ 132
Kelley, Colleen M., national president, National Treasury
Employees Union, prepared statement of..................... 166
Sanders, Ronald P., Associate Director for Strategic Human
Resources Policy, Office of Personnel Management, prepared
statement of............................................... 104
ESPRIT DE CORPS: RECRUITING AND RETAINING AMERICA'S BEST FOR THE
FEDERAL CIVIL SERVICE, H.R. 1601, S. 129, AND H.R. 3737
----------
WEDNESDAY, FEBRUARY 11, 2004
House of Representatives,
Subcommittee on Civil Service and Agency
Organization,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 1:03 p.m., in
room 2154, Rayburn House Office Building, Hon. Jo Ann Davis of
Virginia (chairman of the subcommittee) presiding.
Present: Representatives Jo Ann Davis of Virginia, Norton,
Danny K. Davis of Illinois, and Van Hollen.
Staff present: Ron Martinson, staff director; B. Chad
Bungard, deputy staff director and chief counsel; Chris
Barkley, professional staff member; John Landers, detailee;
Reid Voss, clerk; Shannon Meade, legal intern; Michelle Ash,
minority senior legislative counsel; Tania Shand, minority
professional staff Member; and Teresa Coufal, minority
assistant clerk.
Ms. Davis of Virginia. The subcommittee on Civil Service
and Agency Organization will come to order.
Again I want to thank you all for joining us here today. We
began the second term of the 108th Congress in much the same
way that we did the first--with an exploration of what steps we
can take to attract, motivate, and train the best qualified
workers for the Federal Government. Last year this
subcommittee's hearing focused on the broad subject of
compensation reform. Today we will be looking at two specific
legislative proposals. These legislative proposals, if enacted
into law, would enhance management flexibilities to attract and
retain the best and the brightest across the government and
would alleviate the problem of pay compression for
administrative law judges.
Taken together, these two initiatives represent the major
point of our recruitment and retention strategy--to address the
very real pay, benefit, and personnel issues that keep
potential employees from joining the Civil Service and
sometimes drive our best employees and managers away.
The first piece of legislation is H.R. 1601, the Federal
Workforce Flexibility Act, which I introduced last year. This
bill would do many things to improve the effectiveness of the
Federal Government, including expanding agencies' abilities to
offer recruitment, retention, and relocation bonuses, allowing
agencies to offer enhanced annual leave benefits to new mid-
career hires, emphasizing training, streamlining, critical pay
authority, and making it easier for agencies to establish
personnel demonstration projects.
A companion bill, Senate bill 129, has made its way through
the Senate Governmental Affairs Committee with some changes.
The second bill is H.R. 3737, the Administrative Law Judges
Pay Reform Act, which I introduced earlier this year. This
legislation addresses the large problem of pay compression
among administrative law judges. The 1,400 ALJs across the
government are responsible for hearing disputes over their
agencies' decisions. Most of them work at the Social Security
Administration, where they make judgments on citizens' appeals.
They play a crucial role. Pay compression caused by a statutory
cap on ALJ salaries is especially worrisome in high-cost areas
such as Boston, Chicago, Los Angeles, New York, and San
Francisco. This problem threatens the ability to hire and
retain an appropriate number of administrative law judges.
Until recently, members of the Senior Executive Service were
subject to the same cap, but that problem was remedied for the
SES last year. That legislation, however, failed to address the
ALJ situation.
I want to again thank our witnesses for being here today,
and I look forward to hearing your thoughts on these pieces of
legislation.
I'm going to give my ranking minority member here a chance
to get his breath, and then I am going to recognize him to see
if he has any comments.
[The prepared statement of Hon. Jo Ann Davis, and the texts
of H.R. 1601, H.R. 3737, and S. 129 follow:]
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Mr. Davis of Illinois. Thank you very much, Madam
Chairwoman. I'm pleased to join with you in convening this
hearing and in welcoming our witnesses today.
Given the increased demand by Federal agencies and some
Members of Congress for human capital flexibilities in the
Civil Service system, I'm not surprised that the first hearing
of this session is to consider legislation that would give
Federal agencies flexibilities for recruitment and retention
bonuses, relocation allowances, personnel management
demonstration projects, training, and direct hire authority.
This hearing is timely. Last week we began to see the
results of granting Federal agencies human capital
flexibilities that do not address the problems the
flexibilities portend to correct. Federal Aviation
Administration received exemptions from Title 5 in 1995 so it
could establish its own personnel system. Though the 1995
legislation initially exempted FAA from Chapter 71 of Title 5,
which sets forth the rules for collective bargaining and labor/
management relations, in 1995 Congress restored FAA's coverage
under Chapter 71.
For reasons my staff is researching and trying to
comprehend, Congress has also created a separate bargaining
procedure whereby if the FAA labor and management reach an
impasse in their negotiations, matters being negotiated must be
transmitted to Congress for a final determination. Last month
the FAA transmitted their unresolved labor/management issues to
Congress. If Congress does not act within 60 days, management's
proposal for its personnel system is implemented. Members of
Congress and staff must get into the minutia of the labor/
management agreement and do so within 60 days or management
automatically gets what it wants. This process clearly creates
more problems than it solves.
Last year congressional Democrats and employee
organizations saw the wolf in sheep's clothing and fought the
human capital provisions in the Department of Defense
reauthorization bill, but to no avail. Last week DOD briefed
our staff on the draft proposal for its new personnel system.
It was an outrage. Under the draft proposal, DOD employees
could still join unions, but under a new fee-for-service
arrangement. Employees would pay a fee to contract with Union
representation. DOD argued it needed broad exemptions from
existing personnel laws for national security reasons. What
impact do union dues have on national security?
The proposal also calls for excluding additional groups of
employees from collective bargaining. No reasonable explanation
was given for the exclusions.
Granting Federal agencies flexibilities that do not address
well documented problems are not clear solutions to these
problems and a disservice to Federal employees and the
taxpayers. We can and should do better by Federal employees who
have devoted their lives to serving the American public.
Again, Madam Chairwoman, I thank you for holding this
hearing and look forward to the testimony of our witnesses.
[The prepared statement of Hon. Danny K. Davis follows:]
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Ms. Davis of Virginia. Thank you, Mr. Davis. It is always a
pleasure to have you here as our ranking minority member, and
you always bring so much to the table.
I would like to ask Ms. Norton if you have an opening
statement.
Ms. Norton. Thank you very much, Madam Chairwoman. I
appreciate the bipartisan way in which you have worked with us
on this committee. When I saw the name of this hearing, I am
sure we--and, indeed, I'm sure that it is your intent that we
deal with a major problem in the Federal work force. As it
says, ``Esprit de Corps: Recruiting and Retaining America's
Best Civil Service,`` yet when I came to the hearing and saw
people lined outside, Madam Chairwoman, I wondered if we were
giving away money the way you see people lined outside the
Appropriations Committee. No, we are not giving away money. It
looks like the administration is taking away rights. And the
walls are lined, as well they should be.
We had a very troublesome full committee set of events on
both DOD and the new Homeland Security Committee, and it looks
like we are in for another set of troublesome hearings. I don't
stoop to the pejorative very often, but the notion of saying to
a union that it has to receive the votes of ``X'' number--in
this case 50 percent--in order to qualify to represent workers
must be unprecedented in the history of labor/management
relations in the United States of America.
I recognize that this is only a proposal, but I think we
ought to send a shot across the bow back from where this
proposal came that it is high time to sit down with the people
who represent the people who work for the Federal Government
and try to get proposals that have some bipartisan content
before you make your way to the Congress. I haven't seen the
proposal, but it has already been leaked and aired in the paper
and the workers know about the proposal and are absolutely
outraged at the proposal, and I just hope that as we now are in
the beginning of a new hearing year that we can dispose of
matters like this by sending them home and telling them to try
again.
Thank you very much, Madam Chairwoman.
Ms. Davis of Virginia. Thank you, Ms. Norton.
I ask unanimous consent that all Members have 5 legislative
days to submit written statements and questions for the hearing
record, and that any answers to written questions provided by
the witnesses also be included in the record.
Without objection, it is so ordered.
I ask unanimous consent that all exhibits, documents, and
other materials referred to by Members and the witnesses may be
included in the hearing record, and that all Members be
permitted to revise and extend their remarks.
Without objection, it is so ordered.
On the first panel we are going to hear from Mr. Ronald
Sanders, Associate Director for Strategic Resources Policy at
the Office of Personnel Management.
It is standard practice for this committee to administer
the oath to all witnesses. If all the witnesses could please
stand, I will administer the oath. I'm going to go ahead and do
it for both panels so that we can just take care of it all at
one time.
Raise your right hands.
[Witnesses sworn.]
Ms. Davis of Virginia. Let the record reflect that the
witnesses have answered in the affirmative.
You may be seated.
Mr. Sanders, we have your written testimony in the record,
and I will ask you if you'd like to summarize it. We will
recognize you for 5 minutes.
STATEMENT OF RONALD P. SANDERS, ASSOCIATE DIRECTOR FOR
STRATEGIC HUMAN RESOURCES POLICY, OFFICE OF PERSONNEL
MANAGEMENT
Mr. Sanders. Yes, ma'am. Thank you. Madam Chairwoman, I
appreciate the opportunity to appear before you today to
address H.R. 1601, the Federal Workforce Flexibility Act of
2004. It has also been introduced in the Senate, with certain
differences that I will address, as S. 129. I will also speak
to H.R. 3737, the Administrative Law Judges Pay Reform Act.
I propose to discuss each of the specific provisions of
these bills, providing OPM's views on each. I'll begin with
those that are common to the House and Senate bills, address
those that are unique, and then treat H.R. 3737 last.
Both House and Senate versions of the bill provide Federal
agencies additional flexibility in offering financial
incentives to recruit, retain, and relocate top talent. We
strongly support these flexibilities. By allowing agencies to
pay larger incentives and to provide them in different ways--
for example, in lump sums or installments--the proposed
legislation would materially improve our ability to compete for
the best and brightest, one of Director James' top priorities.
In fact, she specifically mentioned the use of incentives in
this regard as part of her top 10 list of things agencies can
do to improve hiring issued just yesterday.
Except for its extension of these authorities to political
appointees, we would prefer the House version of the bill,
which simply replaces existing flexibilities with new ones
without adding any new reporting requirements. OPM strongly
supports most other provisions that are common to both House
and Senate versions of the bill. Both bills would provide OPM
with the responsibility for granting and reporting individual
agency requests for critical pay for their superstars. The
bills also establish a higher annual leave accrual rate for
senior executives and professionals, and allow agencies to
credit non-Federal work experience to establish a higher annual
leave accrual rate for new mid-career entrants.
Finally, both bills would eliminate potentially anomalous
annuity computations that disadvantage employees when part-time
service is involved.
However, we do not believe it necessary at this time for
the bill to require that agencies establish and appoint a
training officer, especially since the Chief Human Capital
Officers Act of 2002 is relatively new. According to that act,
training and development are among a Chief Human Capital
Officer's principal responsibilities, and on the merits we
believe that that is exactly right. That's the only way to
achieve an integrated approach to strategic management of an
agency's human capital, and CHCOs should be given time to
tackle this very important issue.
The House includes a number of very complicated technical
provisions that would correct anomalies that have resulted from
the implementation of locality pay under the Federal Employees
Pay Comparability Act. These anomalies have to do with complex
inter-relationships between locality pay and special rates--
that's an under-statement--and the impact on pay retention when
employees are covered by one or both. These provisions were in
the President's original Managerial Flexibility Act and we urge
their passage. We also thank you for your leadership in
continuing to champion them.
The House bill also includes streamlined personnel
demonstration project authority. Madam Chairwoman, that
authority is fine as far as it goes. It is based on a strategy
for making incremental improvements in our Civil Service system
that can be traced back to the late 1970's. While we always
appreciate more flexibility to deal with outmoded personnel
rules, a new model has also emerged. First embodied in the
Homeland Security Act and since continued in DOD's National
Security Personnel System, that model sets forth the principles
and process for modernizing our Civil Service system without
compromising any of the core rights and protections that make
it so great.
Madam Chairwoman, you have been one of the architects of
this new approach, and we thank you for your leadership in that
endeavor. We urge you to continue to work with us to explore
making our Civil Service system the best in the world.
The Senate version of the bill would provide Federal
employees with additional compensatory time off for each hour
spent in travel status away from their duty station. We do not
support this proposal. At present there are provisions in Title
5 U.S. Code and case law under the Fair Labor Standards Act to
require compensation for Federal employees in travel status
under certain circumstances, and there is no compelling
business case to provide additional compensatory time off in
this regard.
We do support the technical amendments to S. 129 that
confirm the longstanding practice of interpreting the term
``military service'' to include service as a cadet or
midshipman at the Air Force, Army, Coast Guard, and Naval
Academies. This practice has been brought into question by
appeals court decisions, and we believe this legislation is
necessary to leave no doubt.
Finally, let me address the stand-alone provisions of H.R.
3737, which would reform the pay system for administrative law
judges by increasing the minimum and maximum pay rates. The
statutory minimum and maximum rates of basic pay would be
linked to the rates for level III of the executive schedule
instead of level IV. More importantly, the maximum rate of
locality adjusted basic pay would be increased from the rate
for level III to the rate for level II of the executive
schedule, which is the rate payable to Federal district court
judges. We oppose this bill.
While the impetus behind this legislation is to provide
parity with the new Senior Executive Service pay for
performance system, comparisons with that new system are just
not appropriate. The new SES system is exclusively performance
based. There are no more automatic or across-the-board
increases, and in that light it would be unfair to do so for
ALJs.
Moreover, while there is compression, there is no
compelling evidence of a recruiting or retention problem
amongst ALJs sufficient to warrant such extraordinary
treatment.
We sincerely value the contributions of the ALJ corps, but
for the reasons set forth above and in my written statement we
must oppose H.R. 3737.
Madam Chairwoman, thank you for the opportunity to testify
on these important matters. I would be happy to answer any
questions.
Ms. Davis of Virginia. Thank you, Mr. Sanders. It is always
a pleasure to have you here as one of our witnesses.
[The prepared statement of Mr. Sanders follows:]
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Ms. Davis of Virginia. I'd like to now move to the question
and answer period, and I will yield first to our Civil Service
Subcommittee ranking member, Mr. Davis.
Mr. Davis of Illinois. Thank you very much, Madam
Chairwoman.
Mr. Sanders, based upon the briefing that DOD has given to
us, it has been pretty clear that there was no real
collaboration with OPM. I didn't get the impression that there
was. As Federal agencies receive more flexibilities from Title
5, how does OPM see itself maintaining or holding on to some
oversight authority or responsibility?
Mr. Sanders. I think the Congress, Mr. Davis, in both
cases--Homeland Security and DOD--has provided OPM a central
and pivotal role in that regard. I will only hearken back to
something that Mrs. Davis said. This process is just now
beginning, and OPM and DOD have begun their internal
collaborations, and then DOD and OPM will begin their
collaborations with labor unions and other employee
organizations, so while this was preliminary and was briefed as
such, I think there is a long way to go.
Mr. Davis of Illinois. I don't want to appear that I've got
more confidence in OPM than I do some of the agencies, but I
guess I really do. I'm wondering, do you think that maybe we
need to provide OPM with more authority as a part of its role
and mission--that is, if we are going to be able to
comprehensively develop approaches to dealing with the entire
Federal system, as opposed to some agencies operating perhaps
one way and other agencies operating another way, which means
that employees would not across the board have the same system
that they're working under.
Mr. Sanders. I know that Director James takes her
responsibility under both the Homeland Security Act and the
National Security Personnel System authorizing legislation very
seriously. That role is virtually identical. It provides in
both cases for the Cabinet Secretary and the OPM Director to
jointly prescribe the establishing regulations. That's a pretty
important and pretty powerful role and, as I said, I think
Director James understands the charge she has been given both
by the President and by the Congress to ensure that those
rights that are enumerated in both pieces of legislation are
protected and preserved, at the same time ensuring and
affording those agencies the flexibility they need to deal with
their particular missions. It is that balance that I think OPM
has been charged with striking, and I think the role that the
statute provides for the Director strikes that right balance.
Mr. Davis of Illinois. In his written testimony Mr. DeMaio,
president of the Performance Institute, suggests that Congress
should wait until the Department of Homeland Security and
Department of Defense implement their new systems before
granting Federal agencies additional pay flexibilities. Do you
agree or disagree with that? Or do you think that it might be
prudent for us to get a look at what happens? I've always been
told that seeing is believing, and that sometimes having
experience to base a decision upon--do you think it might be
helpful if we were to wait and see what happens there before
moving further ahead?
Mr. Sanders. That is certainly Congress' prerogative, but,
with all due respect, I think we have had lots of experience
with at least various models of, for example, pay reform, and
literally about a quarter century worth, and there has been
lots of fine tuning. You mentioned FAA. There are a number of
other agencies that have been experimenting with this, that
have been perfecting this, and to the extent that those two
efforts build on that experience--and I believe they have and
will--then I'm not sure that it is necessary to wait to simply
add more to what we already know. I think we have known now for
some time that the General Schedule needs to be reformed.
Mr. Davis of Illinois. Ms. Norton mentioned in her opening
statement the fact that there were so many people here, and
more than we are accustomed to seeing. What do you attribute
this to, or would you attribute anything about this particular
hearing and the numbers of people that have expressed an
interest?
Mr. Sanders. I know this is AFGE's annual legislative
conference, so I suspect they are in town and want to see our
congressional process at work.
Mr. Davis of Illinois. Thank you very much. [Laughter.]
Ms. Davis of Virginia. We will have order, please.
Mr. Davis of Illinois. Thank you very much, Madam
Chairwoman. Thank you, Mr. Sanders.
Ms. Davis of Virginia. Thank you, Mr. Davis.
I would like to remind the Members and the witnesses, that
this hearing is on H.R. 1601 and H.R. 3737, which actually has
nothing to do, as such, with pay for performance. It is looking
at ways to recruit and retain.
Mr. Sanders, in that regard, how many recruitment,
retention, and relocation bonuses are paid per year under
current law? Do you have any idea?
Mr. Sanders. I don't have that number off the top of my
head. We can provide it for the record.
I can tell you that it is not many. For a variety of
reasons--and I think generally good ones--they are used
sparingly. There are funding constraints, but I think that is
generally a good thing because when they are used they are used
for critical purposes. I've had experience in a couple of
agencies where we've used them, where we have managed to find
the money because the job or the individual was that important
to us, and I think the situation the way it exists today with
these added flexibilities would provide just the right tools we
need to compete.
Ms. Davis of Virginia. Do you believe that we will see
expanded use of recruitment, retention, and relocation bonuses
under the new authority that is in H.R. 1601 and if funding may
be a major obstacle? Do you think it would be used? And do you
think it is necessary to recruit and retain?
Mr. Sanders. I think it is necessary. I think it will be
used. Again, I don't think it is going to be used so much in
such a widespread way that someone would suggest abuse. Again,
where there is a will there is a way, and when the job is
important enough and the individual is talented enough to
recruit, retain, or relocate, these incentives have been used.
I think what this bill will do is provide a lot more room for
creativity in their use.
Let me underscore one thing. As the Congress has done in
the bill, there is a service payback commitment, so the
Government is going to get a return on that investment, either
through the individual's service, or if the individual leaves
prematurely under certain circumstances, through a payback
requirement. So I think that is the right balance there, as
well.
Ms. Davis of Virginia. How does OPM view the merits of the
payment of bonuses as opposed to increasing the pay grade?
Mr. Sanders. I think the two have to be looked at together,
because increases in grade or permanent promotions or pay
adjustments to base salary are permanent. I mean, the typical
strategy is to reward high performance with a bonus 1, 2, or 3
years until it is clear that the individual is going to sustain
that high level, and then award that individual a base pay
adjustment--I think that's the way it has worked for many
years--so that we can, in fact, recognize high performers for
one-time acts and over a sustained period. I think that
combination will work very well.
Ms. Davis of Virginia. So OPM prefers the bonuses as
opposed to raising the scale, pay grade?
Mr. Sanders. I think certainly the flexibilities here will
help complement base pay adjustments, as opposed to sort of
playing games with the classification process and raising
grades artificially. This certainly would be preferable.
Ms. Davis of Virginia. I think I've got another minute or
two. Let me go to--I heard you say in Senate bill S. 129 that
OPM opposes the amendment that they put in there with regard to
compensation for travel. I'm not so sure I'm in agreement with
OPM on this one. It sounds like a good proposal to me. It is my
understanding that if an employee were to be able to get
compensated for traveling early in the morning for that time
for travel, that maybe they would not then go the night before
and incur hotel costs, meals, etc. So why would it not be
better to give them time off for having to leave early in the
morning and go? I'm just trying to see why you oppose it.
Mr. Sanders. Madam Chairwoman, let me say this. This issue
has recently been raised with Director James. She's willing to
take a fresh look, and in so doing she is going to reach out to
all of the interested stakeholders, including this
subcommittee, so stay tuned.
Ms. Davis of Virginia. If you could ask her to take a close
look at it and just get back to me with exactly why you would
oppose it, because just at first glance it sounds like a
reasonable amendment to me and I tend to agree with it.
I am going to yield now to Ms. Norton.
Ms. Norton. Thank you, Madam Chairwoman.
I have a question on the ALJs. I'm really trying to
understand the role of OPM since the restructuring of Federal
agencies began, and that is the context in which I look at
everything now because increasingly it sounds to me as though
they may be downsizing agencies in their personnel, but it
looks like OPM is being downsized in its mission.
I would like to know the nature of the collaboration you
have had, very specifically what role you have played in the
proposed DOD proposal--``you'' meaning OPM.
Mr. Sanders. As I said, that process is just now beginning.
To be quite candid about it, our attentions have been focused
principally on bringing the Homeland Security system home,
which I believe is imminent. That has absorbed the attentions
of my staff and myself for many, many months, and we are just
now beginning to turn our attention to DOD.
I can tell you that in this bill OPM's role is pretty clear
and pretty firm. In every case, the Congress has authorized the
Director to issue implementing regulations, and in many cases
that authority is very, very broad, and we appreciate that
because some of the problems addressed here are so complex that
legislation would be problematic. So I see nothing in the
Workforce Flexibility Act that diminishes OPM's role in any way
whatsoever.
Ms. Norton. I appreciate your answer on the Workforce
Flexibility Act, but my question was about the DOD proposal,
and your answer was that you have been so busy with Homeland
Security that you have had zero role in that proposal. Let me
tell you why that--you know, if you want to revise that
answer--you changed the subject from the question I asked. If
you want to revise that answer, I'm pleased to hear it.
Mr. Sanders. As I said, we----
Ms. Norton. Did you play any role--were you in any meetings
with the DOD when they prepared the proposal that has been
leaked to the press and that is now in the newspapers?
Mr. Sanders. We have seen the proposal, yes, ma'am.
Ms. Norton. You know, I saw it, too, but that was not my
question.
Mr. Sanders. As I indicated----
Ms. Norton. Let me tell you why I----
Mr. Sanders [continuing]. We have just now begun----
Ms. Norton [continuing]. Am asking the question. I'm not
trying to embarrass you. I'm sorry you weren't in it, frankly.
But when we are restructuring huge parts of the Federal
Government, when we are changing the 100-year-old Civil Service
system, I think the very least the public and the Congress has
a right to expect is that somebody who has been in touch with
that system be in on the ground floor when you change that
system. I don't know how--I mean, when the Homeland Security
Department was set up, they were given the authority to go out
and look for their own buildings. You know what they did? They
quickly came back to the GSA because they said, ``You know, we
don't know anything about finding space and GSA does,`` and
even though we have our own authority they asked the GSA to
help them. Now, the DOD doesn't know squat about Civil Service,
about what protects Federal workers, about what the Federal
Government is entitled to, and yet without any experts from the
OPM in the room they sit down and they write a proposal and
they say, ``Look, you take a look at this.`` It seems to me it
might have been the other way around. You write the proposal
and you say, ``You take a look at this and adjust this to your
needs.`` If we don't go on record saying that now, we are going
to have another whole year where agencies write their
proposals, strip workers of their rights, come in with asinine
proposals even relating to their own efficiencies, and we're
not going to stand for it. You know, you've done it twice.
We're not going to stand for it.
[Applause.]
Ms. Davis of Virginia. I will say once again this is a
hearing and it will be conducted that way. There will be no
outbreaks of applause. Thank you.
Ms. Norton. Let me ask something about the ALJs. I just
think you ought to carry back to OPM that I am not speaking
just for myself. Let me ask a word about ALJs. I chaired the
EOC. I have the greatest respect for ALJs and what they do. I
take it--let me ask you, do you agree that the ALJ is a judge?
Mr. Sanders. I think the title is appropriate. It is an
administrative law judge. They are different from judges in the
judicial branch of our Government.
Ms. Norton. Do you care to elaborate on that?
Mr. Sanders. Administrative law judges do exactly what
their title says they do--they interpret administrative rules
and statutes as part of----
Ms. Norton. No. I mean the difference is that one
interprets administrative rules and statutes and the other
interprets law. OK. But the reason we have a system, a special
system for them--and we do have a special system. Civil
servants, of course, can be disciplined in an entirely
different way from an ALJ. Everything has to be on the record.
Because, after all, these people handle administrative law
decisions in the same way that a district court judge handles
legal decisions. One thing that we're trying to let everybody--
and they're bringing it all around the world--know is we have
an independent judiciary. One of the ways in which we make them
independent is we do not mess with their pay. I'll tell you
something. There are some judges whose pay I would like to
compress and mess with. But we have an independent system, and
so do we in the administrative system have an independent
system.
I want to know how you would reconcile the pay compression
which you concede does exist with ALJs with the notion of an
independent judiciary within the administrative process.
Mr. Sanders. All you're doing, Ms. Norton, is changing the
point of compression, and in so doing you have created a
fundamental unfairness with the SES pay for performance system
and members of the Senior Executive Service, that system now
just being implemented, because what will happen with the ALJ
reform bill is that, with the capping raised to executive level
III plus locality pay, the vast majority of judges will go to
the base pay limit of level III, they'll get locality pay on
top of that, and most of them will move to level II. They'll
move to level II automatically without any regard to
performance or quality or anything else.
Contrast that with the SES pay for performance system.
There are two very difficult steps for members of the Senior
Executive Service to get anywhere near level II. First,
agencies have to be certified as having performance appraisal
systems that make meaningful distinctions. Those are Congress'
words. We are about to issue the certification criteria. Not
every agency is going to be certified. That is a high bar. And
even when agencies pass that bar it doesn't mean that every SES
member is going to go from level III to level II. It is only
for the few that earn it. It is performance based, no more
automatic, no more across the board. And it is that fundamental
unfairness that I think is the principal opposition to the ALJ
bill, that ALJs will suddenly move to that level without any
regard to performance, and we're telling Senior Executive
Service members, ``You can't, you won't, you have to earn it.''
Ms. Norton. And are you saying you believe that the ALJ
system should be performance based in that sense?
Mr. Sanders. I think there has to be a way to find an
analog.
Ms. Norton. And so what is the--given the independence that
an ALJ needs, what is the appropriate analog? I mean, I'd like
to find a way into the Federal judiciary, as well, but I don't
think I deserve a way into that through the pay system.
Mr. Sanders. I don't know what the analog is at this time.
I do know that independence and performance are not mutually
exclusive.
Ms. Norton. But pay and judicial independence have been
exclusive in our independent system.
Let me just--I'm very worried that we will not be able to
recruit ALJs of the quality we have been able to recruit in the
past. For example, in this new bill you assert that you've had
no problems recruiting ALJs. In the new Medicare prescription
bill that has just been passed by the Congress, we are informed
we will need 350 ALJs simply to adjudicate Medicare benefit
appeals. I can tell you, given this bill, you are going to need
a whole lot more ALJs, because you are going to get all kinds
of difficulties from this bill.
Are you wiling to sit there this afternoon and tell me you
think that there will be no recruitment problems whatsoever
given the unhappiness of the present roster of ALJs and given
the recruitment and retention problems we already have in the
Federal Government where you can take that skill and go to the
private sector today and earn often a great deal more money?
Are you willing to say that you are going to have no trouble
getting 350 ALJs for the Medicare prescription drug bill and
that the status of ALJs would have no effect upon retention and
maintenance? And let me add, 91 percent of your ALJs are
already at retirement age. With that context, I'd like your
answer.
Mr. Sanders. I am willing to say that, as far as the data
has shown to date, there are no recruiting or retention
difficulties.
Ms. Norton. But, of course, the role of the OPM is to
prepare for recruitment. Recruitment, by definition, means you
are looking into the future in order to be able to draw people
in. Let me ask you then very specifically, you know about the
new Medicare prescription drug bill. Have you looked into the
question of whether or not you will be able to recruit ALJs to
administer that bill?
Mr. Sanders. I can tell you that my testimony was
circulated to all agencies, including those that employ ALJs,
and they concurred with the testimony.
Ms. Norton. With the testimony that what? Answer my
question, sir.
Mr. Sanders. That we oppose the ALJ pay reform bill as it
is currently structured.
Ms. Norton. You know, I just want to say this. You're not
going to get away with not answering my questions by answering
some other question. My question again is: has the OPM, whose
job is recruitment and maintenance, looked to see whether or
not it will be able to recruit ALJs knowing that a whole new
body of ALJs is necessary for the prescription drug bill? Have
you looked at that yet? And I'd like you to answer that
question, not some other question that you have decided to
answer.
Mr. Sanders. That is our job, and we have, and we base the
conclusion on two pieces of data. One, historically there are
no recruiting or retention problems. They, in fact, are less
than for the Senior Executive Service. Two, we have to ask the
agencies that actually employ ALJs. They are in a far better
position than we are to make those judgments. They, too, have
concurred that the way as it is currently written, the ALJ pay
reform bill is not something that we can support.
Ms. Norton. That bill was written--I understand my time is
up, Madam Chairwoman--that bill was written before the
prescription drug bill was passed, and I am going to ask you to
go back to the OPM and ask them to do a specific planning and
recruitment study to make sure that, in fact, there are enough
ALJs at the HHS to administer this new bill. Could I get that
promise from you?
Mr. Sanders. If you require us to do that, we will
certainly comply.
Ms. Norton. I'm requiring you to do it, sir.
Ms. Davis of Virginia. If you would take that back to
Director James and ask her to get it back to us, we will make
sure that the members of the committee have the answer to it.
Let me just clarify one thing. You were comparing ALJs to
SESers. The SESers do have performance based but ALJs do not,
correct?
Mr. Sanders. Yes, ma'am.
Ms. Davis of Virginia. I just wanted to clarify that.
And let me just say one thing, because we tend to keep
going to something other than what is the issue of this hearing
today. You know, any of you who were here when we had--most of
you probably were--when we had the hearings on the DOD
personnel transformation, many of us, including the Chair, were
not happy with the way the bill came down, and I cannot
honestly say I am 100 percent happy with the bill as it passed;
however, we will--and I will tell you, Ms. Norton, that we will
do everything in our power before any other changes are made
with our Federal workers, that we will continue to fight to
make sure that it comes to the jurisdiction of this committee
and that we have fair and open hearings so that we know both
sides of the issue, and we will do our best to fight and make
sure it is done in a fair manner.
Ms. Norton. Thank you, Madam Chairwoman.
Ms. Davis of Virginia. Again, I thank you, Mr. Sanders, and
I appreciate your being here today.
With that, we will go to the second panel.
Mr. Sanders. Thank you.
Ms. Davis of Virginia. I would like to point out, to those
of you who are interested in the DOD personnel transformation,
which I think is probably 99.9 percent of you in the room here,
I have spoken to the Secretary of the Navy, Secretary Gordon
England, and he has been charged with working with the unions
to make sure that this transition, this transformation, is done
in a way that is fair and open to the unions, so if he has not
been in touch with you yet, be assured that he will be. He has
been appointed as the point man by the Secretary of Defense.
His name is Gordon England, by the way.
If the second panel will come forward--I'd like to thank
our second panel of witnesses. The record will show that I have
sworn you in previously, so we will first hear today an opening
statement from Judge Kevin Dugan, vice president of the
Association for Administrative Law Judges.
Judge Dugan, thank you for being here. Again, for all of
you we have your written statements in the record, so I would
ask you to summarize your statements in 5 minutes.
STATEMENTS OF KEVIN DUGAN, VICE PRESIDENT, ASSOCIATION FOR
ADMINISTRATIVE LAW JUDGES; JOHN GAGE, NATIONAL PRESIDENT,
AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES; COLLEEN M. KELLEY,
NATIONAL PRESIDENT, NATIONAL TREASURY EMPLOYEES UNION; AND CARL
DE MAIO, PRESIDENT, THE PERFORMANCE INSTITUTE
Mr. Dugan. Thank you. Good morning, Chairwoman Davis and
members of the subcommittee. I am Kevin Dugan, Association of
Administrative Law Judges vice president. I currently am an
administrative law judge in the Office of Hearing Appeals in
Charlotte, NC, with the Social Security Administration.
The Association of Administrative Law Judges represents the
professional interests and concerns of approximately 1,000
administrative law judges in the Social Security Administration
and the Department of Health and Human Services. On behalf of
the administrative law judge community and the ALJ-related
associations that join in support of my testimony, let me
extend our appreciation, Chairwoman Davis, for today's hearing
and this opportunity to testify.
My association and all other Federal ALJ groups strongly
supports your legislation, H.R. 3737, which would address ALJ
pay compression problems that diminish the capacity of the
Federal Government to recruit and retain the finest candidates
and incumbents in the administrative law judiciary. There are
approximately 1,300 administrative law judges in 28 Federal
agencies and departments. They conduct trial-type hearings for
cases brought under Federal statutes. In fact, the Supreme
Court has declared that Federal administrative law judges are
functionally similar to Federal trial judges.
The impact of ALJ decisions is considerable. Their
jurisdiction includes a wide range of significant and diverse
regulatory matters, including areas from anti-trust to banking
practices to environmental matters, food and drug safety, and
so on. These cases may involve millions or even billions of
dollars and have considerable impact on the national economy.
Equally important, ALJs also adjudicate hundreds of
thousands of individual cases each year that determine personal
entitlement to recompense or benefits. These cases, more
personal in nature, are of considerable and equal importance to
the millions of Americans involved. For many, this is the first
and only contact they will have with the adjudicatory authority
of the Federal Government.
I think it important to realize that the SSA disability
adjudication system is the largest legal system in America--
over half a million cases a year. Despite the importance of the
administrative legal system to the American public, a
significant problem exists with ALJ pay. The ALJ pay system was
changed in 1991 when the basic pay levels were tied to specific
percentages of executive schedule level IV. Because of the
linkage, administrative law judges failed to receive annual
cost of living adjustments for four straight years, and ALJ pay
fell considerably behind that of other Federal employees.
Further, we must also recognize that ALJ locality pay is
capped at the pay level for executive level III, impacting many
current ALJs.
A very telling point is that in 1991 entry level pay for an
ALJ was equal to a GS-15, step 5/6. Today that is at a GS-14
step 7/8 level, a virtual--almost a full grade pay cut. And
this does not even take into account bonuses and awards
available to GS employees which properly are not authorized for
ALJs.
As a result of these pay compression problems, the Federal
Government is at a distinct competitive recruiting
disadvantage. It is well recognized that the pay for Federal
administrative law judges has not kept pace with salaries in
the private sector. Now we see that they have not even kept
pace with the Government's own GS pay schedule.
The problem has become so extreme that Federal Energy
regulatory chairman Pat Wood wrote to President Bush that we
are having difficulty attracting and retaining the high quality
of administrative law judges that we need to handle our
challenging case load. That is why we are so pleased to speak
on behalf of this bill. H.R. 3737 would respond to these pay
problems by revising the minimum and maximum levels of pay. You
may wish to refer to Chart B. The availability of locality pay
adjustments would also be assured.
In view of the benefits and reasonableness of this
approach, we urge the subcommittee to approve H.R. 3737.
This concludes my statement. Once again, Madam Chairwoman,
on behalf of the ALJ community we thank you for your continued
interest and support.
Ms. Davis of Virginia. Thank you, Judge. You have my vote.
You did it in less than your 5 minutes.
[The prepared statement of Mr. Dugan follows:]
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Ms. Davis of Virginia. Next we will hear from two of our
very popular today, I believe, employee groups, Mr. John Gage,
the national president of the American Federation of Government
Employees, and after him will be Ms. Colleen Kelley, national
president of the National Treasury Employees Union. As always,
it is a pleasure to have both of you back before this
subcommittee.
Mr. Gage, we have your written testimony in the record, so
if you could summarize your testimony in 5 minutes it would be
appreciated.
Mr. Gage. Thank you, Madam Chairwoman. On behalf of the
600,000 Federal employees represented by AFGE, I thank you for
the opportunity to testify today.
In my written statement I have explained our union's views
of the bills under consideration today. AFGE strongly prefers
Senate bill 129 as marked up because the broad demonstration
project authorities that remain in the House bill have been
eliminated. I urge the committee to take similar action with
regard to the House bill. At a minimum, we consider expansions
in demonstration project authority unnecessary in light of the
enormous and radical experiments being undertaken at the
Department of Homeland Security and Department of Defense.
Last Friday the DOD put forth its plans for the so-called
``National Security Personnel System.'' It is a deceitful
document from top to bottom, starting with its name, since it
has nothing whatsoever to do with national security. As you
know, AFGE strongly opposed the legislation that gave the
Secretary of Defense the authority to rewrite the pay and labor
relations system in the agency. And, Madam Chairwoman, you no
doubt recall that when Dr. David Chu testified before your
committees to argue his case, he insisted that Secretary
Rumsfeld had no intention of eliminating collective bargaining
and replacing it with something inferior. He promised that all
we wanted to do, all we needed was efficiency, national
bargaining instead of local bargaining over 1,300 contracts
when the issue was one that affected the entire agency.
It is my understanding, Madam Chairwoman, that you
specifically intended for collective bargaining to be protected
under the statute. While we disagreed over the exact
legislative language, I believe that your goals and our goals
with regard to protecting collective bargaining were the same.
During the debate over the legislation, AFGE repeatedly
warned that if Congress gave Secretary Rumsfeld the authority
sought that he would abuse that power, and indeed he has. His
proposal states that bargaining will be accomplished through a
form of consultation both at the local and national level, but
bargaining cannot be accomplished through consultation. It can
only be replaced by it. Consultation merely allows employees to
present comments to the agency and presumes the agency's right
to ignore them. They'll talk to us, and then they'll implement.
Bargaining, on the other hand, requires the change of good
faith proposals that may differ, and when agreement or
compromise is not achieved the impasse is resolved through a
neutral third party.
In his bill or in his proposal he puts a thing out there
that he calls ``We'll talk with you when it is a significant
change to the bargaining unit.'' I have been down this road
before. So when a working condition change applies to a smaller
group within a large bargaining unit--and some of our bases
have very large bargaining units, but when it affects maybe 100
electricians or whatever he'll say, ``No, we're not going to
talk about that because it doesn't significantly affect the
whole bargaining unit.'' I've seen it before, and that's
exactly what is contained in this proposal.
Mr. Rumsfeld would replace collective bargaining and
collective bargaining agreements with regulations that he
issues unilaterally. In his blueprint, he decrees that
management issuances, whatever that is, will supersede
contracts, as well as past practice. That is, there will be no
contracts. He further decrees, ``The new labor relations system
will not employ any provisions of 5 U.S.C. Chapter 71,'' which
is the section of the law that grants union rights, collective
bargaining rights, and the right to have grievances heard by a
neutral third party.
This proposal treats the men and women who serve this
Nation as civilian employees of the Defense Department as
errant children who don't deserve anything more than, ``Because
I said so'' as justification for decisions made by management.
This management is not infallible. The pillars of this system
outlined by DOD will be management by fear, intimidation, and
coercion, and the resulting loss to the public's interest will
be discrimination, crony-ism, favoritism, and patronage.
I have been talking to a lot of DOD employees recently, and
this is already--the horse is out of the barn. Jobs that they
have been working for and trying to compete for, promotions are
already being filled by people who are brought in, and as you
investigate it you see a little connection here on the crony-
ism type of basis. I think that's something that has to be
stopped immediately.
We submit that there is no national security rationale for
eliminating collective bargaining and neutral third party
oversight, but Mr. Rumsfeld has thrown up an additional set of
proposals for which no conceivable connection to national
security could ever be asserted. He wants to dictate the number
of people who have to vote in union elections before he will
declare them valid. He wants to immunize DOD from any
responsibility for failure to process union dues payments. He
has ruled out restitution as a remedy for employees if DOD
should ever find itself in violation of its own regulations. To
top it off, he has decided to exclude whole categories of
employees from the benefits of union representation, including
anyone whose job requires certification, such as fire fighters,
electricians, contracting officers, and attorneys, all of whom
would be eligible for union membership if they worked for any
other employer in the United States, public or private.
The very human impact of a negotiated contract achieved
through collective bargaining is that employees will be able to
have their benefits, their working conditions, their
opportunities for promotions, flexible working conditions, and
the standards for discipline encapsulated in a written document
that has been agreed to by the employee representatives, as
well as management. This document, precisely because it is in
writing, is transparent to the workers, but most of all it is
enforceable.
Ms. Davis of Virginia. Mr. Gage, I don't mean to interrupt
you, but you are about 1 minute over your 5 minutes already,
and I've heard you speak on the bills. Did you have anything
else that you wanted to say on the two bills that are the
subject of this hearing?
Mr. Gage. Well, I think if we are talking about retaining
and recruiting employees, I think we really have to look at the
road we are going down, Madam Chairwoman. Something has to be
done about this. You can't let a personnel system be based on
this type of union busting, and that is what is happening here.
None of these provisions result in any type of safeguard to
national security. But I appreciate the time and I appreciate
the opportunity to testify.
Ms. Davis of Virginia. And I don't mean to interrupt you,
but we do have your full statement in the record, and I would
assume all the Members have read it, but we do have other
witnesses that we want to testify, and we wanted to be able to
get to the questions, because I'm sure many of the Members want
to ask questions.
[The prepared statement of Mr. Gage follows:]
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Ms. Davis of Virginia. The one thing I would urge you to do
is to make sure that you talk to Secretary England, the
Secretary of the Navy. I spoke to him on the phone not too long
ago, maybe 1\1/2\ hours or 2 hours ago, and he is very
interested in working with the unions. The only thing I would
ask you to do is to talk to him, work with him, and if you have
problems report back to me and we'll try to take it from there.
Mr. Gage. Well, we have been trying. We have been calling
and trying to talk to anyone in the Department of Defense and
we have been shut out.
Ms. Davis of Virginia. Now you have a name. Secretary of
the Navy is the point man, and he, with his own words, said to
me on the phone that he is willing to work with the members of
the unions. So if you would just make sure that you get with
him and get back to us on how it goes, I'd certainly appreciate
it.
Mr. Gage. Thank you, Madam Chairwoman.
Ms. Davis of Virginia. Ms. Kelley, as always it is a
pleasure to have you back before this committee. We have your
written testimony in the record, so if you would summarize your
testimony we'll recognize you for 5 minutes.
Ms. Kelley. Thank you. On behalf of the 150,000 employees
represented by NTEU, I appreciate the invitation and the
opportunity to be here today. I must, however, begin by saying
how disappointed NTEU is at the proposed new National Security
Personnel System that was unveiled by the Department for this
reason that is focused on this hearing: if implemented as
written, this will have a negative impact on the ability to
recruit and retain employees in the Department of Defense based
on the environment that it would create for those employees.
When the legislation was debated, NTEU questioned the need
for such broad discretion and we raised concerns as to whether
it would be exercised fairly. It is now clear that our fears
were well founded. The proposal severely limits collective
bargaining, but it also sets up a fox guarding the hen house
approach to due process for employees. Probably most
interestingly, it establishes a system for union elections
that, if it were applied to current elected Federal officials
today, most could not meet the test.
It was never clear what the problem was that the
legislation sought to address, but what is clear is that this
committee needs to revisit this matter. I appreciate your
interest in the issue and your commitment to ensure the unions'
involvement in the process.
Let me say on another note how much we appreciate, Madam
Chairwoman, your commitment to agencies having the proper tools
to allow them to hire and to inspire the best work force. An
honest process for setting Federal pay is a key first step, and
we thank you for your support of pay parity and for all of the
members in attendance at this hearing on this important issue.
Unfortunately, because the President did not act in accordance
with the bipartisan will of Congress, just as they did in 2003,
Federal civilian employees must again wait for the full amount
of their 2004 pay raise, the raise that their uniformed
counterparts have already received.
Health insurance is another consideration for prospective
employees. Premiums for FEHB plans have risen 45 percent since
2001, alone. The Government pays 72 percent of the premium.
Most employers pay 80 percent. NTEU supports bipartisan
legislation to increase the Government's share of the premium
to 80 percent. I understand that you, Madam Chairwoman, are
planning to hold hearings later this year on the FEHB plan, and
NTEU looks forward to working with you on this.
A disincentive to Federal employment today is the
administration's march to contract out as much work as
possible. Family friendly programs and new rewards and
incentives will do little to attract employees if we cannot
convince them that we are interested in their commitment to a
career in public service. NTEU members tell me that contracting
out has eroded morale, disrupted agency operations, and
discouraged prospective employees from applying. Employees are
appalled at the lack of oversight and accountability in
contracting out. Congressman Van Hollen's amendment to the 2004
Treasury appropriations bill tried to bring order to the
Government's contracting process. I want to personally thank
you, Chairwoman Davis, and all Members who are here today for
your support of that amendment.
NTEU worked closely with Senators Voinovich and Akaka on S.
129, the Federal Workforce Flexibility Act. We are pleased that
you plan to move H.R. 1601, as well. Federal employees are
increasingly required to conduct business travel on their own
time and can only be compensated in limited circumstances, so I
was very pleased to hear your question of OPM and their
commitment to take a re-look at this.
Let me give you two examples. An IRS employee is assigned a
case over 150 miles away. The taxpayer would like to meet at
1:30 p.m., and the employee is unable to complete their work by
the end of the business day. However, they stay an extra hour
or two to complete the assignment. As you noted, they would be
paid hotel expenses and per diem if they stayed, but instead
most employees would choose to travel home, in effect donating
several hours of work and travel time to the Federal
Government. These employees cannot be compensated for travel
under current law. They cannot be. However, had the employee
elected to stay, the Government would have paid these other
expenses.
Here's another example. An employee in Missouri reports his
work often goes beyond a normal working day, and his
alternative is to leave early and have to come back the next
day and risk leaving an undesirable impression on the taxpayer
and the taxpayer's attorney and to make the IRS appear
unprofessional, something he has too much pride in his work to
allow to happen.
So in these cases, the employees cannot keep the best
interest of the Government in mind, present a professional
appearance, and avoid lodging and per diem costs for the
Government. The provision added to S. 129 authorizes
compensatory time for travel to perform work assignments. It
does not apply to normal commuting travel or any time that
would be for commuting, and it could not be converted to money.
It would purely be compensatory time for time spent on the job.
NTEU is very pleased that the legislation discussed today
draws attention to the Government's need to train employees,
also. NTEU hopes that you will work to ensure that agency
training budgets are properly funded. The bills also propose
additional flexibilities in the use of recruitment, relocation,
and retention bonuses. Limited funding is what hampers most
agencies' ability to put these bonuses to better use, and NTEU
hopes that a dedicated stream of funding can be found for this
purpose.
I thank you again for the opportunity to appear today and
would welcome any questions you might have.
Ms. Davis of Virginia. Thank you, Ms. Kelley.
[The prepared statement of Ms. Kelley follows:]
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Ms. Davis of Virginia. I'll just use this moment to say
that in our manager's amendment we already plan to take the
demo project out of H.R. 1601, and we plan on adding in the
compensatory time that the Senate has added in, so that will be
in our manager's amendment before it ever goes before the floor
for a vote.
Ms. Kelley. I thank the Chair.
Mr. Van Hollen. Madam Chairwoman, if I may----
Ms. Davis of Virginia. Yes.
Mr. Van Hollen. Unfortunately, I've got to run to another
hearing, but I wanted to commend you on your initiative in the
legislation before us and also lend myself to some of the
remarks that have been made. It is important to move forward
without, at the same time, taking two steps back. Your
legislation is a step forward. I think some of the other things
we are seeing going on with respect to the implementation of
the Defense Department of the legislation we passed, which,
while there were differences, I think that the way it has been
implemented is really contrary to how either side would have
interpreted. So I hope we'll have ongoing oversight with
respect to that in this committee.
I thank you, and I apologize for having to leave.
Ms. Davis of Virginia. That's OK, Mr. Van Hollen. We
certainly appreciate your input.
Let me just clarify one thing, and I did check with staff
to make sure. It hasn't been implemented yet. As I understand
it, when DOD met with the staff, they met with them with
strictly concepts. It is not a done deal. It is strictly
concepts. It is what they're thinking. So now is the time to
speak up to them and get them to correct or work with you.
That's why I said please talk to the Secretary of the Navy,
because he has been appointed as the point man, if you will,
and is willing to work with you, so let him know your
frustrations and what you are unhappy with.
Again, it is just a concept is what I have been told. It's
just concepts, it isn't in stone yet, so now is the time to fix
it before it gets in stone.
Thank you, Mr. Van Hollen.
Mr. Van Hollen. Thank you, Madam Chairwoman.
Ms. Davis of Virginia. Sorry to keep you waiting, Mr.
DeMaio.
We have the pleasure to hear from Mr. Carl DeMaio,
president of patient, and last but not least.
You have been recognized for 5 minutes. Again, we have your
written testimony in the record, so if you would summarize your
testimony in 5 minutes.
Mr. DeMaio. Madam Chairwoman, members of the subcommittee,
I appreciate the opportunity to be here this morning. I am
president of the Performance Institute, a private think tank
that focuses on reforming government through the principles of
performance, accountability, transparency, and competition. We
have extensive expertise in the area of Federal human resources
management and recent reforms.
Last year the Institute surveyed all major Federal agencies
to catalog best practices in recruitment and retention. We
compiled those best practices in a report entitled, ``Strategic
Recruitment for Government: Ten Innovative Practices for
Designing, Implementing, and Measuring Recruitment Initiatives
in Government.'' As noted in our report and has been shown to
the leadership of this subcommittee, the Federal Government has
a major human capital crisis on its hands, and it is not just
an issue of recruitment and retention, it is a crisis of
getting the right people with the right skills in the right
position at the right time to perform the right function with
the right compensation, all to be reviewed by the right
employee performance evaluation.
Now, that's a lot of rights to get right, and many agencies
are still struggling in getting those rights right. But no
matter how it is spun, the reality is that more than half of
all Federal employees are now or in the next 5 years will be
eligible to retire. Something to note is that we have been
talking about the human capital crisis for many years, and GAO
Comptroller General David Walker has shown amazing leadership
in this regard. We have not yet seen the crisis materialize
because of the downturn in the labor market. As the economy
recovers, the Federal Government will be facing a monumental
challenge in recruitment and retention.
This subcommittee has shown exemplary leadership on these
issues. I do hope that the focus on retention, recruitment, and
relocation bonuses, the subject of the legislation, will not
get overwhelmed by other H.R. issues facing the Federal
Government. These issues are very important for this committee
to act on and to deliberate over.
The subcommittee is considering legislation, H.R. 1601 and
S. 129, to provide Federal agencies more flexibility in setting
pay rates for employees, providing bonuses for recruitment and
retention and relocation, and improving the management of
Federal training. Proposed legislation has noble and worthy
objectives; however, it addresses only 2 of the 10 innovative
practices for recruitment or retention.
Now, no legislation has to touch on all issues, but we do
want to propose several refinements to the legislation that we
do support.
First, emphasize performance, not across-the-board pay
increases. We are very supportive of the flexibilities for
recruitment, retention, and relocation bonuses for this very
reason, but this subcommittee really should set as one of its
objectives that through its work Federal employees will start
talking about my pay increase rather than the pay increase.
Across-the-board increases in Federal salaries does nothing to
recognize individual contributions to agency success. And if we
are going to recruit and retain, we are going to do it one
individual at a time by valuing each individual's contribution
to agency mission.
For this very reason, I encourage this subcommittee to
explore other legislative vehicles to improve pay for
performance. The committee could also look to the human capital
performance fund as an example. The President proposed a $300
million human capital performance fund in his fiscal year 2005
budget, and we encourage members of the committee to work to
ensure that this funding survives the appropriations process
intact.
We would urge the committee to consider alternatives to the
General Schedule system. Proposed legislation only provides
flexibility within the existing GS system of pay grades. Many,
including our organization, argue that a one-size-fits-all pay
system with rigid pay grades is not conducive to winning the
war for talent. For example, the Department of Defense wants to
abandon the GS schedule in favor of universal pay banding, the
proposal that we've talked about several times this morning,
and it wants to give managers the ability to hire candidates on
the spot for hard-to-fill positions.
We consider this proposal a first step in moving toward
customized pay systems for each Federal agency reflective of
their agency's mission, reflective of the labor market each
individually face.
Also, the subcommittee should consider market-based pay
formulas. Again, currently in the Federal Government we ask OPM
to look at pay and look at locality adjustments and they apply
a one-size-fits-all schedule. Merely raising the pay grades can
increase the government's overall cost without a clear return
on investment. It is worth pointing out here that employee
recruitment and retention battles we are going to face aren't
really going to be with the private sector for most positions
in most agencies. What we are going to have to do is be ready
to battle with the nonprofit center and academics for our
talent.
There is a different type of individual who comes into
government--people who want to serve their community. They want
to help with social problems and have a sense of accomplishment
or purpose, whereas in the private sector there really is a
profit or bottom line basis. The only other area that these
candidates or these individuals can go to are the nonprofit
world and academics, so we have encouraged benchmarking pay
against those two sectors of society.
Finally--and this is very important to consider for this
legislation--we need to link all HR initiatives to a
fundamental strategic human capital plan for each agency. We
need accountability, and we also need a set number of
strategies that agencies need to pursue for winning the war for
talent, and so we encourage you to adopt language in the bill
that would require each agency, when providing a recruitment,
retention, or relocation bonus, to measure the effectiveness
and the impact of those bonuses on recruitment and retention
and to tie that to skills gaps identified in the human capital
plan.
If the committee can act on these issues, you can
strengthen this bill which is already addressing very important
issues.
Ms. Davis of Virginia. Thank you, Mr. DeMaio.
[The prepared statement of Mr. DeMaio follows:]
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Ms. Davis of Virginia. I just want to make sure that I
understood you correctly when you said that these people would
not--people who work for the Federal Government would not go to
private organizations, they would go to nonprofits. Are you
comparing pay grades there or what?
Mr. DeMaio. We're looking at the types of individuals who
consider government service, and we have seen some polling done
by the Partnership for Public Service, Merit Systems Protection
Board has done some survey of Federal workers, as has OPM, and
to basically suggest that we need to compete directly for every
single position with the private sector pay is not an
appropriate comparison. There are some areas where certainly--
for example, an accountant at the Department of Treasury very
well could go into the private sector and get an accountancy
job, but in other areas like Health and Human Services their
alternatives usually are going to be nonprofit organizations or
academic organizations and institutions. So one-size-fits-all
pay comparisons is not what we are suggesting. We would like to
see, on each position that the agency is trying to recruit for,
what is the competition offering, and sometimes that is going
to be a set of nonprofit organizations.
Ms. Davis of Virginia. I guess I will, No. 1, thank all
four of you for your testimony, and I guess I will just yield
to myself for questions.
Judge Dugan, can I ask you what percentage of ALJs now are
eligible for retirement and how many will be eligible in 5
years? Do you have that?
Mr. Dugan. Well, the figure we got--and we got it from
OPM--is that 91 percent are eligible. Now, I don't--that's
figures we got from OPM. I can't speak for them.
Ms. Davis of Virginia. Eligible now?
Mr. Dugan. That's what we were told. Yes, that's correct.
Ms. Davis of Virginia. OK. I guess that answers my next
question then.
Mr. Dugan. And then I looked around my office, and there
were a bunch of old people there. [Laughter.]
Ms. Davis of Virginia. You were the youngest guy in the
room, right?
Mr. Dugan. Just about.
Ms. Davis of Virginia. Have you heard from any other
agencies or organizations? Have you heard any companies that
ALJs decisions has declined because of recruiting and retention
problems occasioned by the pay compression?
Mr. Dugan. Well, I cited the FERC letter, but I don't think
we have any particular studies that can quantify that. The
problem is that the register, OPM register, has been closed for
over 5 years, so when they talk about their views on
recruitment it is a bunch--it is guesswork, because right now
the register is still closed and they are right now creating a
new test, so there really is no way to know the quality that
we're going to get ultimately. The Commissioner of Social
Security testified to Congress that she was light about 200
ALJs because she hasn't been able to hire. OPM, at the urging
of Congress----
Ms. Davis of Virginia. She's short 200?
Mr. Dugan. Right, short 200.
Ms. Davis of Virginia. Which agency was that?
Mr. Dugan. This was Commissioner Barnhart who testified
before the Social Security Subcommittee in September, and they
were asking about addressing the backlog, of course. But what
been done now is OPM, through pressure from Congress, reopened
the old register that they have been holding and said they
would give her some names; however, she has expressed concerns
about the quality of the remaining candidates and is only going
to fill about 10 positions right now to fill that out.
In addition to that, we also have some major hiring that's
going to have to be done because of the Medicare Act that has
been passed by Congress, so we're looking somewhere between 400
to 500 ALJs we're going to be needing as soon as possible. I
think the Medicare Act comes into effect in October 2005, the
transfer to CPMS.
Ms. Davis of Virginia. Do you know why the register was
closed for 5 years?
Mr. Dugan. Well, it started off because of litigation, the
Azdel litigation, and there was a stay put on it by the Merit
Systems Protection Board, but that ultimately was resolved and
then OPM did not reopen it. I don't know why, but they said
they were redoing the test and they were going to put out a
whole new type of test for administrative law judges. So why
they did not reopen it under the old test I don't know.
Ms. Davis of Virginia. What do you hear from amongst your
colleagues? Is pay a reason for them to leave and retire?
Mr. Dugan. Well, the reason for the pay problem is more in
the cities that you were announcing. I'm in Charlotte, so the
compression is not hitting us there, but the entry level, the
new ones that come in, we're having a problem because if you
are a GS-15 attorney you're going to have to--you're not coming
in at the level. It's a 14 step 7 or 8 now. It's almost a whole
grade pay cut, so it has to hurt. Even though we don't have
figures and OPM's was guess work, it just obviously has to hurt
with recruitment.
Ms. Davis of Virginia. Thank you, Judge Dugan. We'll do
everything we can to work this bill through, but, as you heard,
the administration is against this so it is an uphill battle.
Mr. Gage, you mentioned the demo project that you didn't
like. Besides that, are there any other provisions of the bill,
because we want to be open with you and we want to know what
you like and what you don't like.
Mr. Gage. Well, in everything that I think we are going to
be looking at--and I'm sorry to harp on this again, but we hear
a lot of good-sounding cliches that end up in workers rights
being abrogated, so we are going to go through everything that
we hear with new personnel changes, new ideas, pay for
performance, and we're going to be looking at things very hard
with the idea that these can't be excuses or high-sounding
names for taking away employee rights.
Ms. Davis of Virginia. Well, if you'll take a good look at
H.R. 1601 and compare it to S. 129 and let us know what you
think before it is too late, I'd appreciate it.
Ms. Kelley, have you received a lot of complaints about the
problems now experienced by the Federal employees who must
travel for work yet receive no compensation other than the two
that you mentioned to me?
Ms. Kelley. This is very far-reaching, particularly in the
IRS. It has been a longstanding problem, and as the IRS has
reorganized into business units so the taxpayers are served by
specific business units, it has required even more travel by
employees than ever before, so these instances are multiplying
every day. They are not decreasing. And, as I said, I know OPM
has said there are circumstances where they can be compensated.
There are, but not these employees. There is no way under the
current law that the employees who are doing this travel can be
compensated for doing the work of the IRS, and that is what we
were hoping to have made fair.
Ms. Davis of Virginia. From the examples you gave me--I
mean, I haven't studied it that closely, but just from hearing
it it seems to me like we'd be saving taxpayer dollars if we
reimbursed them for their time.
In your written testimony, as I read it, you didn't say
anything about objecting to the demo project in H.R. 1601. I've
already told you I plan on taking it out of the manager's
amendment because I'm not sure about it. Do I take it that you
support it?
Ms. Kelley. No. I wouldn't necessarily take that. We have
been working with Senators Voinovich and Akaka on the many
pieces that are in this bill, because there are a lot of moving
parts in it, and there were, you know, things that we should
have preferred not, but as part of the package we were trying
to work together as we did with your office as you move toward
the H.R. version, so it is fine with us if you make the manager
amendment.
Ms. Davis of Virginia. I'm going to charge you with the
same thing I charged Mr. Gage with. I would ask you to go
through the bill with a fine-toothed comb word by word, line by
line, and if there is any provision that is objectionable to
you and your employees, let us know before it is too late.
Ms. Kelley. I will do that. Thank you.
Ms. Davis of Virginia. Mr. DeMaio, in your view are there
any flexibilities in H.R. 1601 that you believe that we
shouldn't--I've heard that you believe there is more we should
be enacting, but are there any provisions in there now that you
think we should not be enacting?
Mr. DeMaio. Well, we are for more flexibilities, but the
flexibilities that you are offering in the bill need to be
accountable. We have to show results with these recruitment,
retention, relocation bonuses, and so we do suggest not only
the basis for all the bonuses to be tied back to the strategic
human capital plan, but tied to performance measures and
evaluation, so if the agency is providing recruitment bonuses
over a period of time for a specific position class in their
agency and it is not working, then they need to look at other
alternatives.
We also suggest longer-term contracts for employees who get
bonuses. In one respect for the recruitment bonus you do
require a time of service contract, but for the retention bonus
there is no time of service. We would like to see some of those
accountability provisions woven into the flexibilities. It is
OK to be flexible, but you have to show results, and that's
what we are advocating.
In terms of the demonstration projects, that really is the
context that we place our recommendation that the committee may
want to see the DOD and the Department of Homeland Security
progress. We think what is going on at DOD and Department of
Homeland Security is innovative, will provide substantial
flexibility and substantial incentives for recruitment,
retention, and employee management. That's why we are, as of
right now, supportive of the proposals that we have seen. We
think that they probably will offer a template to take
governmentwide and to have an overall change in the Civil
Service system based upon our experiences in those two
agencies.
Ms. Davis of Virginia. And, in my opinion, they may well do
that. Had I had my way, I would rather have waited to see if it
worked for DHS before we expanded it to the largest agency for
Civil Service employees, but I didn't have my way.
Mr. DeMaio. I think that's our--our position here today is
consistent with that. Let's get these two massive
restructurings under our belt, let's learn from them, and then
let's see where they would apply elsewhere in the Federal
Government. It may be that you would want to take those two
systems governmentwide or it may be that you want to continue
with the demonstration project route of allowing individual
agencies to customize their own system. I in the past testified
on our discomfort with having a choose-your-own adventure Civil
Service system where each agency comes up with their own rules
of the road.
Ms. Davis of Virginia. You're not the only one
uncomfortable with that. That's why I said that we will try to
make sure that any agency that's wanting to make a change, that
it's looked at very closely by this subcommittee, and I think
I've said it in the past, and I know I've probably said it to
you, Ms. Kelley, that I would like to see a model that we use
agency-wide before we go willy-nilly here and there and do
something where folks don't know what's hitting them tomorrow.
But, again, I would hope that we don't do anything too quick.
And I appreciate the comments that you've made.
I will tell you that I don't think we can go any broader in
scope with the bill that we have than what we have right now.
We were biting off a little bit at a time, but trying not to do
anything that damages or harms our----
Mr. DeMaio. And I think that's a role of good government
groups like ours. Our role is to try to present provocative
ideas, knowing that Congress will probably have to moderate a
number of interests and probably do something that moves us
forward and gives us progress.
Ms. Davis of Virginia. I'll give you a for instance. I
didn't see anything wrong with the ALJ bill, but I've met with
resistance within our Congress in great amounts, which
surprised me.
Mr. DeMaio. If I could point something out, also in
response to the testimony on the administration's competitive
sourcing initiative and contracting out, we have studied that
initiative and----
Ms. Davis of Virginia. You might not want to talk about
that in this room right now.
Mr. DeMaio. We have concluded that competitive sourcing
actually is a tool for the human capital process, and if done
properly can be used to redeploy agency workers to areas where
we have a recruitment challenge, and so that's the way we look
at competitive sourcing. Rather than looking at arbitrary
targets for out-sourcing or privatization, which we do not
support, we want to see competition as re-deploying agency
work, human capital, to the area where it is needed.
Ms. Kelley. Madam Chairwoman, if I could just comment, I'm
glad you identified your suggestions as provocative. I don't
want to start----
Ms. Davis of Virginia. I don't think anybody is going to
disagree with that.
Ms. Kelley. This is try--my point, the suggestions that
have come forth from Mr. DeMaio have to do with measuring,
monitoring, ensuring that progress is made, that there are
measures in place. There is not a strong track record of that
within agencies on anything, whether it is on contracting out,
and the list can go on and on. And so if the agencies proceed
with these various implementations, assistance from other such
as your group on insisting on the measuring, the monitoring,
the moving slowly before implementing would be very much
appreciated, because I know of no agency that has a good track
record with doing this, and they just don't know how, and we
all have to help to make sure that happens.
Ms. Davis of Virginia. I totally agree with you, Ms.
Kelley.
Mr. DeMaio, one last question for you. Are there any
weaknesses in the President's management agenda in the
Government Performance and Results Act which call for strategic
human capital planning that we should correct by legislation?
Mr. DeMaio. Well, we believe that legislation exists, the
entire management agenda exists in legislation, and that
agencies have the statutory tools they need for effective
management. The question now becomes: are we applying
consequences for agencies that are not engaging in performance-
based management? I think the President's management agenda's
big impact is in that area. The initiatives are not new. They
have been in the Government for many, many years, competitive
sourcing since the Eisenhower administration. But what is
needed is accountability. What is needed is that results
demonstration through performance evaluation, and so that is
where we are focusing, is on the implementation of the
President's management agenda within agencies.
The Congress could formalize the development of strategic
human capital plans in legislation. That has not happened. The
creation of a human capital officer is certainly a very
important step. What it does is it brings HR to the management
table in a way that the chief financial officer and the chief
information officer have been brought to the table, but, just
like with the Clinger-Cohen Act, which does the IT plan, and
the GPRA, which does the performance plan, the strategic plan,
maybe that human capital officer should be responsible for
developing in legislation, not just an administration
initiative, a strategic human capital plan with specific goals
based on a comprehensive work force assessment of how many
employees do we have today, what are their skill sets like
today, and what is our mission going to require we have in 5
years, so it would encompass recruitment, retention, training,
succession planning, developing the next generation of
government leaders. All of these issues have to be spoken to in
a formal way and in an accountable way through human capital
plan. I think this committee could enact that in this bill and
require that recruitment and retention, relocation
flexibilities be tied to an analysis and a set of goals and
strategies articulated in a comprehensive plan.
We don't know whether the next administration will require
human capital plans. We would like to see that formalized
through congressional action.
Ms. Davis of Virginia. Just so you know, we are having a
hearing in May to address these issues and to see if we're
doing right and what we need to do.
There's a lot going on right now that affects all of our
Federal employees, and if we're going to make the changes that
apparently seems to be the will of many around here to do--not
necessarily in this room--maybe this is the time to do it as we
are having so many people retire, so we don't lose any of the
current work force that we have. Rather than going in and doing
away with everybody or anybody, just let people go by attrition
and make our changes at that point. But in doing so I want to
work with all of you to make sure that we do it right and that
we don't harm the quality of life of our Federal employees,
because you are a valuable asset to us and not one that we want
to lose.
I thank you all for being here today. Again, Judge Dugan,
if you have any comments about the legislation for the ALJs,
anything you want us to look at more closely?
Mr. Dugan. I just wanted to add that the whole performance
issue and the SES issue, that was all mixing apples and
oranges.
Ms. Davis of Virginia. That's why I tried to point it out.
Mr. Dugan. It really, really wasn't getting to what we are
dealing with, APA hearings and--I think you understand that.
Ms. Davis of Virginia. That's why I tried to clarify with
Mr. Sanders that SESers are performance based. ALJs are not
even allowed to be.
Mr. DeMaio. Madam Chairwoman, if I could indulge, we did
not include our report in the committee record, but we include
our Web site address, www.performanceweb.org, where agencies
can download the report, suggestions on how to win the talent
war. Ms. Tara Short is our director of human capital strategy
at the Institute and is available for questions just by going
to the Web site.
Ms. Davis of Virginia. Thank you, Mr. DeMaio. Again, thank
you all for being here.
The hearing is adjourned.
[Whereupon, at 1:03 p.m., the subcommittee was adjourned,
to reconvene at the call of the Chair.]
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