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FEDERAL EMPLOYEE COMPENSATION: AN UPDATE 

HEARING 

BEFORE THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

MAY 18, 2017 

Serial No. 115–25 

Printed for the use of the Committee on Oversight and Government Reform 

( 

Available via the World Wide Web: http://www.fdsys.gov 

http://oversight.house.gov 


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COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

Jason Chaffetz, Utah, Chairman 

John J. Duncan, Jr., Tennessee 

Darrell E. Issa, California 

Jim Jordan, Ohio 

Mark Sanford, South Carolina 

Justin Amash, Michigan 

Paul A. Gosar, Arizona 

Scott DesJarlais, Tennessee 

Trey Gowdy, South Carolina 

Blake Farenthold, Texas 

Virginia Foxx, North Carolina 

Thomas Massie, Kentucky 

Mark Meadows, North Carolina 

Ron DeSantis, Florida 

Dennis A. Ross, Florida 

Mark Walker, North Carolina 

Rod Blum, Iowa 

Jody B. Hice, Georgia 

Steve Russell, Oklahoma 

Glenn Grothman, Wisconsin 

Will Hurd, Texas 

Gary J. Palmer, Alabama 

James Comer, Kentucky 

Paul Mitchell, Michigan 

Elijah E. Cummings, Maryland, Ranking 

Minority Member 

Carolyn B. Maloney, New York 

Eleanor Holmes Norton, District of Columbia 

Wm. Lacy Clay, Missouri 

Stephen F. Lynch, Massachusetts 

Jim Cooper, Tennessee 

Gerald E. Connolly, Virginia 

Robin L. Kelly, Illinois 

Brenda L. Lawrence, Michigan 

Bonnie Watson Coleman, New Jersey 

Stacey E. Plaskett, Virgin Islands 

Val Butler Demings, Florida 

Raja Krishnamoorthi, Illinois 

Jamie Raskin, Maryland 

Peter Welch, Vermont 

Matthew Cartwright, Pennsylvania 

Mark DeSaulnier, California 

John Sarbanes, Maryland 

JONATHAN SKLADANY, Majority Staff Director 

WILLIAM MCKENNA General Counsel 

KEVIN ORTIZ, Professional Staff Member 

SHARON CASEY, Deputy Chief Clerk 

DAVID RAPALLO, Minority Staff Director 


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C O N T E N T S 

Page 

Hearing held on May 18, 2017 ............................................................................... 1 

WITNESSES 

Mr. Joseph Kile, Assistant Director for Microeconomic Studies, Congressional 

Budget Office 

Oral Statement ................................................................................................. 7 

Written Statement ............................................................................................ 9 

Mr. Andrew Biggs, Resident Scholar, American Enterprise Institute 

Oral Statement ................................................................................................. 32 

Written Statement ............................................................................................ 34 

Ms. Rachel Greszler, Research Fellow in Economics, Budget and Entitlements, The Heritage Foundation 

Oral Statement ................................................................................................. 40 

Written Statement ............................................................................................ 42 

Mr. Robert Goldenkoff, Director of Strategic Issues, U.S. Government Accountability Office 

Oral Statement ................................................................................................. 52 

Written Statement ............................................................................................ 54 

Ms. Jacqueline Simon, Public Policy Director, American Federation of Government Employees 

Oral Statement ................................................................................................. 72 

Written Statement ............................................................................................ 74 

APPENDIX 

Senior Executives Association Statement submitted by Mr. Connolly ............... 132 

The National Treasury Employees Union Statement submitted by Mr. 

Connolly ................................................................................................................ 134 

National Association of Active and Retired Federal Employees Statement 

submitted by Mr. Connolly .................................................................................. 141 

Center on Budget and Policy Priorities Report submitted by Mr. Sarbanes ...... 146 

Response from Mr. Kile, CBO, to Questions for the Record ................................ 151 

Response from Mr. Biggs, AEI, to Questions for the Record ............................... 154 

Response from Ms. Greszler, Heritage Foundation, to Questions for the 

Record ................................................................................................................... 160 

Response from Mr. Goldenkoff, GAO, to Questions for the Record ..................... 166 


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FEDERAL EMPLOYEE COMPENSATION: AN 

UPDATE 

Thursday, May 18, 2017 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, 

Washington, D.C. 

The committee met, pursuant to call, at 9:00 a.m., in Room 2154, 

Rayburn House Office Building, Hon. Mark Meadows presiding. 

Present: Representatives Meadows, Duncan, Issa, Jordan, 

Amash, Gosar, Farenthold, DeSantis, Ross, Walker, Blum, Hice, 

Russell, Grothman, Hurd, Palmer, Mitchell, Cummings, Maloney, 

Norton, Clay, Lynch, Connolly, Kelly, Lawrence, Watson Coleman, 

Plaskett, Demings, Krishnamoorthi, Raskin, Welch, Cartwright, 

DeSaulnier, and Sarbanes. 

Mr. MEADOWS. The Committee on Oversight and Government 

Reform will come to order. And without objection, the chair is authorized to declare a recess at any time. 

The United States Federal Government plays an important role 

in the lives of its citizens, and it needs a world-class workforce for 

maximum effectiveness. The government must acquire and retain 

top talent, especially in mission-critical occupations such as 

cybersecurity experts and economists. 

However, the current Federal pay and benefits structure is really 

not conducive in my opinion to this goal. The general schedule, the 

pay schedule for the white-collar workers rewards tenure rather 

than performance, and the problem with this system is that it creates a two-fold problem: One, taxpayers are stuck paying for overly 

generous compensation packages in comparison to private sector 

salaries for a comparable job; and two, the Federal Government is 

unable to adequately recruit and compensate top talent in other 

fields. 

Additionally, we need a Federal retirement system that is responsive to the needs of a transient millennial workforce. And in 

an era when employees are highly mobile and can frequently 

change jobs, it makes no sense to have an archaic pension system 

that is designed for a workforce that stays in place for decades. 

Simply put, the current system is expensive and does not 

incentivize the best and brightest to join and stay in the Federal 

workforce. According to the Office of Management and Budget, in 

fiscal year 2015 more than two million full-time-equivalent nonpostal individuals were employed in the executive branch, and the 

cost to the Federal Government for these employees was nearly 

$256 billion in direct compensation and benefits. 


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According to the Congressional Budget Office’s recently updated 

Private Sector Compensation Comparison Report, Federal employees earn 17 percent more in total compensation than a comparable 

private sector employee. The CBO analysis might not tell the entire 

story either. Other analyses conducted by the Heritage Foundation, 

which we will hear from today; the American Enterprise Institute 

additionally who we will hear from found that Federal employees 

are compensated at even greater rates than private sector workers. 

Interestingly, the CBO report found that compensation differs higher among higher workforce than with lower levels of education and 

lesser among those workers with advanced degrees. 

So we need to have a fiscally sustainable pay and benefits system 

that allows the Federal Government to reward performance and 

compensate others based on the importance of their position and 

not simply on tenure. 

And I will want to make one other further comment. These hearings can many times be construed as taking one direction or another, and I have committed not only to my colleagues to my right 

to make sure that we get it right for the Federal workforce. One 

of the most illuminating aspects that I have had is I have gone 

from workforce place to workforce place, some very large and some 

very small that I was the first Member of Congress to ever visit 

them. I have found that we have an incredibly dedicated Federal 

workforce. 

So today, I would like to use this hearing to not only get at the 

facts but also get an action plan where we can work in a bipartisan 

way to make sure that people are fairly compensated, but also to 

make sure that there is an incentive there to not only attract new 

Federal workers but also to make sure that the very thing that we 

are working for does not become a disincentive. What I have heard 

over and over and over again is that you have people who work 

very hard and you have those who don’t, and yet the compensation 

doesn’t seem to be commensurate with that. And it has a chilling 

effect on those hard workers that I know Mr. Connolly and I and 

certainly Mr. Cummings both agree that we need to recognize great 

performance because we have some great Federal workers. 

Mr. MEADOWS. And with that, I would now like to recognize the 

distinguished ranking member and my good friend, Mr. Cummings, 

for his opening remarks. 

Mr. CUMMINGS. Thank you very much, Mr. Chairman. 

As I listen to you, I cannot help but think about the many Federal employees who work so hard and have been committed, many 

of them since they were children, to make things better for a wide 

range of people. I have often said that the people that I meet, the 

ones, many of them we see in the halls, the guard when we came 

in the garage; the researchers at NIH; the people that have given 

their blood, sweat, and tears at EPA to keep our water and our air 

clean, and I could go on and on and on, the ones that do the dirty 

jobs that nobody else will do. And at every instant that I have to 

speak to our employees, I tell them thank you. 

Today’s hearing, we will review the compensation of Federal 

workers compared to the compensations of workers in the private 

sector. The Congressional Budget Office recently issued a report on 

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ingly, the CBO report shows that some Federal workers make more 

than their private sector colleagues while others make less. Unfortunately, I fear that my Republican colleagues will try to use this 

report to argue that we are paying Federal employees too much. 

Please. And then they may try to use this hearing as a basis to 

continue attacking the pay and benefits of Federal workers. 

Since I have been in the Congress, one of the things that hurt 

me more than anything else is when the Congress was trying to 

deal with unemployment benefits, they said they had to be taken 

out of the purses of Federal employees. I will never forget that. 

Hello? Unemployment benefits taken out of the purse of the Federal employee. 

And this is exactly the wrong lesson to draw from this report. 

The real lesson for today’s hearing is not that middle class Federal 

workers are making too much. It is that private sector workers, especially those with the lowest incomes and educations are making 

too little. 

Over the past several decades, the productivity of American 

workers has grown higher than ever before. At the same time, corporations, shareholders, CEOs have been exploiting these workers 

and hoarding more and more of the wealth that these workers 

produce. And they do produce. From 1979 to 2013, the total income 

for the top 1 percent of households grew by an astonishing 188 percent. But over the exact same time frame, total income for the bottom 80 percent of households grew by a paltry 18 percent. Let’s 

stick that in the DNA of every cell of our brains. 

It is not just wages that are stagnating. The Bureau of Labor 

Statistics reports that inequality in total compensation is worsening even more rapidly than wages alone. In other words, inequality is getting even worse when we take into account health insurance, retirement and savings plans, paid leave, and disability and 

life insurance. 

The other day I had breakfast with one of my constituents, and 

one of the things she said that whenever you all are talking about 

health care, remember this. She said when you are sick, you can’t 

work. And if you can’t work, you can’t earn. And if you can’t earn, 

you can’t pay a policy. A lady suffering from stage 4 colon cancer, 

26 years old, just married, wanted to have a baby, young lawyer, 

just passed the bar. 

So when we examine the lowest-quarter wage earners, nearly 60 

percent had no access to sick leave. Nearly 70 percent had no access to employer-provided medical care as of March 2016. Yet our 

friends on the other side of the aisle refuse to help these workers. 

And you are right, Mr. Chairman; we ought to applaud those 

who give their blood, their sweat, their tears, but no matter what 

office we go in, no matter where we go, there are going to be people 

that work real, real, real, real hard, and then there are going to 

be some that are going to work maybe just to get by. For years, 

they have refused to allow Congress to vote on democratic legislation to raise the minimum wage. The minimum wage is only $7.25 

per hour, and it has not been raised in eight years. Try it. Try living on $7.25 an hour. At the same time, our Republican friends 

keep attacking Federal workers. 


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And I am so glad that you, Mr. Meadows, Mr. Chairman, have 

been a constant—you kept a balance with regard to this trying to 

look at both sides of it. And it is so important. It is so important 

because when I talk to Federal workers, they watch these hearings 

and they say, well, why are we so demonized? We are just trying 

to do our job. And so they force new Federal employees to pay more 

for their retirement benefits in 2012 and 2013, and now, they are 

threatening to take away their pensions. 

They want to follow the lead of private sector corporations in 

eliminating traditional defined benefit plans in exchange for less 

generous 401(k)-style plans. And they cloak these cuts in the language of, quote, ‘‘reform,’’ unquote. The truth is that this will hurt 

their own constituents. This will hurt nearly 8,000 Federal workers 

with only high school diplomas who live in Kentucky, 18,000 Federal workers with high school diplomas in Georgia, and 31,000 Federal workers with high school diplomas in Texas. 

We should be trying to lift up all workers, including both middle 

class Federal workers and low-income private sector workers. I 

hope that our witnesses today will shed some light on this. 

As I close with that, I would like to offer a special thanks to Jacqueline Simon, the public policy director of the American Federation of Government Employees, and all of our witnesses. She 

agreed to testify at our request under extremely short notice, and 

we thank her tremendously for being here. 

Related to that, Mr. Chairman, I want to note my very strong objection to this committee’s refusal to allow Senator Bernie Sanders 

to testify here today. I submitted my request for Senator Sanders 

to testify last week, and my request was denied for no reason other 

than certain Republicans on our committee claiming that Senator 

Sanders is not qualified to testify about challenges facing workers 

in our nation. Of course, that is ridiculous. Senator Sanders is a 

champion of workers’ rights, and he is a nationally renowned expert on these matters. 

This is not the first time the committee has refused to invite a 

witness we requested. Chairman Issa refused a request when we 

wanted to invite Sandra Fluke because he claimed she was not 

qualified to speak about the issues affecting women such as birth 

control. 

However, this is the first time I can remember in being on this 

committee 21 years that the committee tried to silence a United 

States Senator, who is also a former member of this esteemed committee. As a matter of fact, he used to sit right beside me. He certainly deserved more respect than he was given, and I extended my 

apologies to him. He had made arrangements to try to be here, and 

he said perhaps he will have another invitation at another time. 

With that, I yield back. 

Mr. MEADOWS. I thank the good morning. 

Mr. ISSA. Mr. Chairman, point of personal privilege. 

Mr. MEADOWS. Well, hold on just a minute. 

The ranking member knows very well my personal feelings towards him. The ranking member also knows very well my personal 

feelings towards the Federal workforce. And I expressed in no uncertain terms that this hearing would not be political. And Senator 

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ers in his State, was not the best person to address this in a nonpolitical way. And I shared that with you personally. 

I also wanted to, for the record, make it known that I offered 

other potential avenues for you to have people here. You were 

given 17 days’ notice about this, and Senator Sanders brings a different element to a very important topic that we must fix on behalf 

of the Federal workers. I don’t believe you nor I want to sacrifice 

that for a political statement that potentially could be made based 

on a Senator who represents less than 1 percent—in fact not even 

that, .15 of a percent of the Federal workforce in his State. 

And so my good friend needs to understand that when it comes 

to this, if we want to make a political statement, we can do that. 

And I am doing my very best to make sure that what we do is we 

protect the Federal workers. I know you and I agree on that. 

Mr. CUMMINGS. Yes, Chairman. 

Mr. MEADOWS. I know Gerry Connolly and I agree on that. So 

let’s make sure that we keep it where it is. And you know that I 

offered to have Steny Hoyer to come in because he represents a 

whole lot of other Federal workers. And Gerry Connolly comes to 

me each and every day on behalf of the Federal workers. This is 

a Republican complimenting a Democrat on his advocacy for the 

Federal workforce. You do the same. And here is what I want to 

say. Let’s not make this political. And the denial for Bernie Sanders to come in here was one that was done in private between you 

and I, and so let’s make sure that we keep the main thing the main 

thing. 

Mr. CUMMINGS. Chairman, I just need one minute. 

Mr. MEADOWS. Sure. 

Mr. CUMMINGS. You know, all of this is political. We are in a political climate. And —— 

Mr. MEADOWS. But it doesn’t have to be. 

Mr. CUMMINGS. No, I am not finished. 

Mr. MEADOWS. It doesn’t have to be. 

Mr. CUMMINGS. Thank you. Thank you for yielding. 

No, it does not have to be, but I think we set a dangerous precedent when we say to a United States Senator for the first time 

since I have been here, 21 years, that what he has to say he can’t 

say in this forum. Normally, I mean, we have had Senators come 

and speak from both sides of the aisle. They come, they speak, we 

don’t ask them questions, and they move on. But I understand, and 

I appreciate—I want to make it clear, and I tried to say it, that 

you have been fair. And I tried to say it. Now, maybe I didn’t say 

it as clear as you wanted me to say it, but all I was saying is I 

think sometimes we can set a precedent that is dangerous. And I 

don’t know if I will ever get on the other side to get over to the 

Senate, but I would hope you all will welcome me back to talk 

about anything I want to talk about. 

I yield back. 

Mr. MEADOWS. We will welcome you back. I don’t know about 

talking on anything that you would like to talk about. How about 

that? 

Mr. ISSA. Mr. Chairman? 

Mr. MEADOWS. Yes. 


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Mr. ISSA. Point of privilege simply to correct what I think was 

an omission of some of the characteristics of a previous hearing because I, too, like you, Chairman, could not always allow every possible witness but did make an effort to make sure that we never 

had a panel that was inappropriate to the balance. 

In the case of the particular hearing that the ranking member 

is referring to, they offered two witnesses. We had two panels. I 

had no problem with one witness, and I selected between the two 

they offered, an ordained minister to be on a panel with other ordained ministers, priests, and rabbis. The ranking member refused 

that and demanded that a college student not in any way a religious leader testify on the first panel. I offered that she could testify on the second panel, which included other if you will laypeople 

who were specialists. He refused. 

So it was always about who was appropriate for panel one, which 

was priests, ministers, and rabbis, versus panel two, which were 

other people knowledgeable on the area. And I think that it is important, just as you are doing here today, that each panel represent 

a common thread of knowledge, experience, and testimony. And so 

I applaud you for appropriately balancing your panel. 

It is interesting that when the shoe was on the other foot and 

I was in the minority, I was often denied even one witness, and I 

never made quite the claim that is being made here today. But I 

was unhappy but I never denied an appropriate panel to the ranking member, and I hope in the full discussion he appreciates that. 

Mr. MEADOWS. Well, I thank the gentleman. I also want to say 

this. We are going to keep the main thing the main thing, and this 

is about the Federal workforce and proper compensation. There are 

good and valuable inputs that can come from both sides of the 

aisle, and I hope the ranking member realizes that there is no one 

willing to listen more intently than me on this particular issue. It 

is important. As a businessperson, the best and most valuable 

asset you have is not a building, it is not a vehicle, it is not even 

a computer. It is the asset of your workforce and their contribution. 

And certainly our Federal workforce, if you hear nothing else if 

you are watching this, the asset of our Federal workforce is one 

that should be applauded, rewarded appropriately based on merits 

and performance, and certainly hopefully this hearing will get here. 

So with that, I will hold the record open for five legislative days 

for any members who would like to submit a written statement. We 

will now —— 

Mr. CONNOLLY. Mr. Chairman? 

Mr. MEADOWS. We will now recognize —— 

Mr. CONNOLLY. A unanimous consent request simply before you 

swear them in. 

Mr. MEADOWS. Go ahead. 

Mr. CONNOLLY. Yes, I ask unanimous consent that the statements from the Senior Executive Association, National Treasury 

Employees Union, and the National Association of Active and Retired Federal Employees be entered into the record. 

Mr. MEADOWS. Without objection. 

Mr. CONNOLLY. I thank the chairman. 


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Mr. MEADOWS. We will now recognize our panel of witnesses. I 

am pleased to welcome Mr. Joseph Kile, assistant director of microeconomic studies of the Congressional Budget Office. Welcome. 

Mr. Andrew Biggs, resident scholar of the American Enterprise 

Institute, welcome. 

Ms. Rachel Greszler, research fellow in economics and budget 

and entitlements at the Heritage Foundation, welcome. 

Mr. Robert Goldenkoff, director of strategic issues at the Government Accountability Office, welcome. 

And Ms. Jacqueline Simon, policy director of the American Federation of Government Employees of the AFL–CIO, welcome. 

Welcome to you all. And pursuant to committee rules, all witnesses will be sworn in before they testify, so if you will please rise 

and raise your right hand. And I apologize; it is Ms. Simon. 

[Witnesses sworn.] 

Mr. MEADOWS. Thank you. Please be seated. Let the record reflect that all witnesses answered in the affirmative. 

In order to allow time for discussion, we would ask that you limit 

your oral testimony to five minutes, but your entire written statement will be made part of the record. 

So, Mr. Kile, you are recognized for five minutes. 

WITNESS STATEMENTS 

STATEMENT OF JOSEPH KILE 

Mr. KILE. Thank you. And good morning, Chairman Meadows, 

Ranking Member Cummings, and members of the committee. 

Thank you for inviting me to testify about CBO’s recent report that 

compares the compensation with Federal employees with those in 

the private sector. 

To provide some context for that comparison, my testimony focuses on the 2.2 million civilians who work for the Federal Government. Last year, the Federal Government spent $215 billion to 

compensate those people. 

CBO analyzed how the Federal Government’s compensation costs 

would change if the average cost of employing Federal workers was 

the same as that of the private sector. That’s important because 

the government competes with the private sector for people who 

possess the mix of attributes needed to do its work. But a complete 

evaluation of the Federal Government’s compensation system 

would require more information on recruitment and retention. 

Comparing compensation between the sectors is complicated because the workforces differ in characteristics that affect compensation, for instance, experience, education, and occupation. On the 

whole, Federal workers tend to be older, more educated, and more 

concentrated in professional occupations than workers in the private sector. For instance, about 60 percent of Federal employees 

have a bachelor’s degree or more. By contrast, about 35 percent of 

private sectors worker—private sector workers have that much 

education. 

CBO’s analysis accounts for those differences and for other factors that we could observe, but compensation for individuals in 

both sectors also depends on factors that we could not observe. For 

instance, other traits such as motivation or effort are not easy to 


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measure, but they can matter a great deal for compensation at an 

individual level. So our results are best interpreted as average differences between the sectors rather than an assessment of whether 

any individual would be paid more or less in the other sector. 

Turning to the results of our work, I want to focus on total compensation. That is the sum of wages and benefits. Between 2011 

and 2015, the differences in total compensation of Federal civilian 

employees with those of similar workers in the private sector vary 

widely depending on employees’ educational attainment. Among 

workers with a high school diploma or less, total compensation 

costs were 53 percent more on average for Federal employees than 

for their private sector counterparts. 

Among workers whose education culminated in a bachelor’s degree, which is the most common level of education in the Federal 

workforce, total compensation costs were 21 percent more for the 

Federal workers than for workers in the private sector. By contrast, total compensation costs among workers with a professional 

degree or a doctorate were 18 percent less for Federal employees 

than for workers in the private sector. 

Let me make a brief observation on both components of compensation. Focusing for a minute on wages, the ranges of wages between high- and low-paid employees was narrower in the Federal 

Government than in the private sector. That narrower range of 

wages among Federal employees might reflect constraints of the 

Federal pay systems, which make it harder for managers to reward 

the best performers or to limit the pay of poor performers. 

Turning briefly to benefits, the most important factor in contributing to the difference between the two sectors is the defined benefit plan that is available to most Federal employees. Such plans 

have become less common in the private sector. 

I’d like to close by touching briefly on the effects of two significant policy changes in recent years. First, lawmakers eliminated 

across-the-board salary increases for Federal employees in—from 

2011 to 2013. That limited the total increase during the period of 

our analysis to 2 percent. Because salaries in the private sector increased by more during that period, that change reduced the average wage of Federal employees relative to the private sector. However, at the same time, the Federal Government also reduce hiring 

and there was a temporary reduction in the number of hours 

worked by Federal employees. Both of those factors had the effect 

of increasing the average compensation of Federal workers relative 

to the private sector. 

The second policy change involved increasing the share of wages 

that Federal employees who were hired after 2012 must contribute 

to Federal defined benefit retirement plans. That change will 

gradually reduce the cost to the Federal Government of the program beginning this year. 

Thank you again for your time, and I’d be happy to answer any 

questions that you might have. 

[The statement of Mr. Kile follows:] 


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Mr. MEADOWS. Thank you, Mr. Kile. 

Mr. Biggs, you are recognized for five minutes. 

STATEMENT OF ANDREW BIGGS 

Mr. BIGGS. Chairman Meadows, Ranking Member Cummings, 

members of the committee, thank you for the opportunity today to 

discuss how Federal pay and benefits compare with what similar 

workers will be likely to receive in the private sector. 

The Congressional Budget Office has conducted a highly professional state-of-the-art analysis which produces the headline figure 

that on average Federal salaries and benefits are 17 percent above 

private sector levels. And that is the figure that deserves headlines. 

Total compensation for full-time equivalent Federal employee in 

2015 was about $123,000. A 17 percent Federal pay premium implies that similar private sector workers would receive total pay 

and benefits of around $105,000, an annual difference of about 

$18,000. 

When averaged over 2.2 million Federal employees, the Federal 

compensation premium adds up to about $38 billion per year, equal 

to what the Federal Government spends on energy and the environment and substantially exceeding Federal spending on transportation. 

One could have technical quibbles with the CBO’s approach. My 

own view again for technical reasons is that the CBO somewhat 

underestimates the salary premium paid to Federal employees, as 

well as underestimating the compensation paid to Federal employees through their defined benefit pensions. My written testimony 

provides details on these technical disagreements. But to be clear, 

I doubt that any analyst would find the CBO’s methods or results 

to be unreasonable. 

At this point we should consider the technical debate over Federal pay to be basically settled. Some Federal workers may be underpaid relative to the private sector, but the vast majority are not. 

Some Federal employees, particularly those with less education, receive far more in Federal employment than they would likely receive outside of government. 

My own view is that across-the-board changes like wage freezes 

aren’t the best approach. Instead, Congress and the administration 

should work to make Federal agency pay-setting more flexible to 

the needs of the labor market. If an agency finds that it cannot 

hire, it should be able to increase salaries. But the fact that the 

Federal Government receives so many applicants for each job opening that it has to cap the number of applicants it even considers 

is evidence that most Federal jobs are considered attractive relative 

to opportunities outside of government. 

The Federal Government should look to move away from the onesize-fits-all general schedule which tries to equate dramatically different jobs onto a single pay scale. Other developed countries use 

more decentralized pay-setting approaches in which individual 

agencies are given more discretion to set pay for different jobs. 

Given the diverse range of occupations in the Federal Government, 

that seems an appropriate next step in ensuring that Federal employees are paid fairly and efficiently. 


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Thank you for your time and attention, and I’m happy to answer 

any questions. 

[The statement of Mr. Biggs follows:] 


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Mr. MEADOWS. Thank you, Mr. Biggs. And you have got a good 

namesake here in Congress from Arizona that shares your name. 

So, Ms. Greszler, you are recognized for five minutes. 

STATEMENT OF RACHEL GRESZLER 

Ms. GRESZLER. Thank you for the opportunity—sorry. Thank you 

for the opportunity to be here today. I’d like to focus my testimony 

on three different points. The first is differences in compensation 

that are not included in the CBO study or either of our studies 

here. The second is the government’s faulty business model. And 

the third is some recommendations I have to bring Federal compensation more in line with the private sector. 

So, first, there are a lot of benefits that cannot be measured very 

easily or for which there’s not significant data available or that 

might not be available to all workers equally across the board. So 

some of those benefits that are available to Federal employees include significant student loan repayments, up to $10,000 per year, 

or $60,000 in total, as well as student loan forgiveness after 10 

years of on-time payments. Then, there’s up to $3,000 per year in Federal transportation subsidies, as well as another $3,500 per year value of employees’ 

retirement health benefits. Federal employees also have greater access to things like on-site childcare, and some can receive as much 

as $35,000 per year in childcare subsidies. And lastly, Federal 

workers enjoy preferable work schedules and significantly greater 

job security. 

My second point is that the Federal Government’s bad business 

structure hurts productivity and it unnecessarily drives up taxpayer costs. The government provides a big compensation premium. That should help the government function like a well-oiled 

machine. Instead, it’s rusty and sluggish. One reason is that the 

government has a skewed compensation structure. It provides the 

biggest premium to the workers that it faces the least competition 

to attract, and it provides the smallest premium to those that it 

needs to entice the most. Compared to the private sector, the Federal Government employs almost three times as many workers 

with a master’s degree or more but only about a third as many 

with a high school diploma or less. 

Another one of the government’s bad business practices is that 

it over-weights an undervalued benefit. Federal employees receive 

about three times as much in retirement benefits. Most of that 

comes from the government’s defined benefit contribution plan. But 

workers don’t fully value this pension plan because they don’t know 

how much it will ultimately provide them in retirement, and oftentimes, they need money in their paycheck more than they need a 

future promise for benefit. A study of Illinois public teachers found 

that they valued additional pension benefits at only 19 cents on the 

dollar. It makes no sense for the Federal Government to provide a 

benefit that is worth only a fraction of the cost to its employees. 

And lastly, the government stifles productivity by failing to reward high performers and also failing to penalize low performers. 

Federal workers receive two effectively automatic pay increases. 

The first is an annual cost-of-living adjustment, and then second, 

99.9 percent of all Federal employees receive a so-called performVerDate Nov 24 2008 10:28 Sep 12, 2017 Jkt 000000 PO 00000 Frm 00044 Fmt 6633 Sfmt 6633 H:\26558.TXT APRIL

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ance-based pay increase. While virtually all Federal employees receive these performance-based pay increases, almost none are penalized or fired. 

According to a study by the OPM, 80 percent of all Federal managers have managed a poorly performing employee, yet fewer than 

15 percent have rated those poor performing employees anything 

less than fully successful, and fewer than 8 percent of them attempted to do anything about it. Among those who did attempt to 

take action, 78 percent that their efforts—said that their efforts 

had no effect. This is a recipe for driving out the most productive 

employees and retaining the least productive ones. That is the opposite of what business schools teach and what private and successful businesses practice. 

So finally, I’d like to propose a few changes to bring Federal employee compensation more in line with that of the private sector. 

This should help improve productivity, accountability, and efficiency. First, Congress should make dismissing Federal employees 

less difficult by extending the probationary period from one year to 

three years, by limiting dismissal appeals, by lowering the burden 

of proof necessary to fire Federal workers, and by expediting the 

dismissal process for certain employees. 

Next, Congress should reduce the level of within-grade pay increases that cause Federal employees to climb the pay scale more 

quickly than those in the private sector. Some of those savings 

should go towards truly performance-based pay increases. Employees who don’t receive performance-based pay increases should have 

limited options for appeal, and Federal managers should not have 

to institute a performance improvement plan for employees that it 

rates anything less than fully successful. 

Finally, the biggest change that can be made is in the defined 

benefit contributions for the pensions. This could actually be a winwin for taxpayers and for Federal employees. As I propose it, workers would have options as to the type of plan. They would not be 

kicked out of their defined benefit pensions. They wouldn’t lose 

anything that they’ve already accrued, and less of their total compensation could be tied up in future benefits. This would give workers actual dollar contributions that they own and control, and it 

would force the Federal Government to recognize the costs that it 

promises immediately instead of passing them on to future taxpayers. 

Other changes would include reducing the amount of paid leave 

from roughly 43 days to 35, as well as limiting the retiree health 

benefit to current employees. 

Thank you. 

[The statement of Ms. Greszler follows:] 


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Mr. MEADOWS. Thank you so much for your testimony. 

Mr. Goldenkoff, you’re recognized for five minutes. 

STATEMENT OF ROBERT GOLDENKOFF 

Mr. GOLDENKOFF. Chairman Meadows, Ranking Member 

Cummings, and members of the committee, I am pleased to be here 

today to discuss the Federal employee compensation system and 

ways to modernize it. 

Currently, Federal employees are compensated through an outmoded system that, one, rewards length of service rather than individual performance and contributions; and two, automatically provides across-the-board annual pay increases even to poor performers. At the same time, skills gaps in mission-critical occupations across government are putting agencies and programs at risk 

while high levels of employees eligible for retirement create both 

challenges and opportunities for agencies to transform their organizations to better meet mission requirements and also address budgetary pressures. 

These trends point to the fact that a careful consideration of Federal pay is necessary for both sound fiscal stewardship, as well as 

to support the cost-effective recruitment and retention of a highperforming and agile Federal workforce. 

In my remarks today, I will discuss key lessons learned in creating a more market-driven results-oriented approach to Federal 

pay and opportunities in addition to Federal pay that OPM and 

agencies could leverage to be more competitive in the labor market. 

The bottom line is that, while the Federal compensation may need 

to be re-examined, agencies must also make better use of the tools 

and flexibilities already available to them. 

Congressional policy calls for Federal workers’ pay under the 

general schedule to be aligned with comparable non-Federal workers’ pay, but while implementing a more market-based and performance-oriented pay system is both doable and desirable, it certainly won’t be easy. The experiences of public, private, and nonprofit organizations in rolling out their own results-oriented pay 

systems provide useful lessons learned for the Federal Government. 

Among other things, they told us that it was important to examine the value of employees’ total compensation to remain competitive in the labor market; provide training on leadership, management, coaching, and feedback to facilitate effective communication 

and to link individual performance to organizational results; and 

third, build meaningful stakeholder consensus to gain ownership 

and acceptance for any pay reforms. 

In addition to competitive compensation, high-performing organizations have found that the full lifecycle of personnel management 

activities, including workforce planning, recruitment, onboarding, 

engagement, and training need to be fully aligned and focused on 

the cost-effective achievement of an organization’s mission. In 

many instances, improvements in these areas are within the control of Federal agencies. 

Among other things, our work has shown that the tone starts 

from the top. Agency leaders and managers should set an example 

that human capital management is directly linked to performance, 


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and it is not simply a transactional function. Moreover, time and 

again, our work has shown how a breakdown in one or more personnel functions can erode the performance of Federal agencies and 

threaten their ability to cost-effectively carry out their missions. 

Going forward, key focus areas for OPM and agencies include improving the hiring process by, among other actions, refining, consolidating, or eliminating less-effective hiring authorities; modernizing the classification system so that it keeps pace with the government’s evolving requirements; and strengthening performance 

management and agencies’ ability to deal with poor performers 

through such steps as lengthening the probationary period. Opportunities also exist to improve the capacity of agency human resource offices to better support an agency’s requirements. 

In conclusion, Federal compensation should enable agencies to 

cost-effectively attract, motivate, and retain a high-performing and 

agile workforce necessary to meet their missions. At the same time, 

our work has also shown that agencies already have a number of 

tools and flexibilities available to them that can significantly improve executive branch personnel management. Going forward, it 

will be important to hold agencies accountable for fully leveraging 

those resources. 

Chairman Meadows, Ranking Member Cummings, this completes 

my prepared statement, and I’ll be pleased to respond to any questions that you may have. 

[The statement of Mr. Goldenkoff follows:] 


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Mr. MEADOWS. Thank you. 

Ms. Simon, you are recognized for five minutes. 

STATEMENT OF JACQUELINE SIMON 

Ms. SIMON. Thank you for the opportunity to testify today. 

The CBO’s study answers a very peculiar question: How much 

could the government save if it paid its workforce the average of 

what private employers pay broken down by demographic criteria? 

It’s a strange question. It’s more the kind of thing that might be 

asked on a graduate school midterm in labor economics but only to 

find out whether the students get the idea behind human capital 

theory. 

The human capital approach CBO takes is basically a capital 

asset pricing model that applies the logic of finance to human 

beings. Wages, salaries, and benefits are the price, and workers are 

the asset. The asset’s attributes are the race, sex, education, industry, and whatever else might be a source of value. 

When you compare the compensation the government provides to 

averages in the private sector measured through a human capital 

lens, you find the government both overpays and underpays depending on demographics, not surprising because the government 

employs people to work in an enormous range of jobs. 

The human capital approach has been used successfully to show 

how jobs that mainly employ women and racial minorities pay less 

than jobs that mainly employ white men even though the jobs require similar levels of education. But here we are using the human 

capital approach to complain about pay and benefit systems that 

do not discriminate. 

When CBO assessed the accuracy of the capital asset pricing of 

the conglomeration of human capital known as the Federal workforce, it was clear they’d find the price too high. This is because 

on average the private sector pays men more than women, whites 

more than blacks, old more than young. The Federal Government 

does not reproduce all these inequities because in its pay systems 

demographic traits are irrelevant. Federal pay is an attribute of 

the job, not the traits of the individual holding the job. As a result, 

men and women with the same Federal job are paid roughly the 

same amount. 

The demographic traits that comprise a human capital model’s 

independent variables are completely irrelevant to the salary and 

benefit package the Federal Government applies to any given Federal job. Had CBO used the proper method for making the comparison, the one used by the Federal Salary Council, its conclusions 

would have lined up with the Council’s findings: that Federal employees are underpaid, whether they’re top professionals like doctors and lawyers, technical experts like engineers and scientists, 

healthcare providers like VA nursing assistants and dietitians, or 

administrative workers who handle claims for Social Security or 

veterans’ benefits. 

My written statement describes the inappropriateness of the 

human capital approach for comparison of non-cash compensation. 

Here, I will focus on the failures of the CBO study with regard to 

retirement costs. 


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The Federal Government finances its employees’ retirement benefits by setting aside funds in the Civil Service Retirement and 

Disability Fund, CSRDF. All agency and employee contributions 

are assigned to this trust fund, and its assets are invested exclusively in U.S. Treasury bonds. These bonds are budget authority 

and thus can be redeemed to pay earned annuities to Federal retirees. The rate of return on these assets—on the assets of the fund 

is just like the Social Security trust fund, a combination of all the 

interest rates of the treasury bonds held by the fund. 

Historically, the rate of return on treasury bonds has been lower 

than the rate of return on private equities. Private sector and some 

state and local governments are free to invest the assets of their 

pension plans in a mix of public and private equities. Because the 

law prohibits the government from investing the trust fund’s assets 

in any form of equity other than treasuries, it costs more to 

produce each dollar of Federal retirement benefit. The Federal Government must spend more for each employee’s benefit regardless of 

the employee’s salary, education, race, age, or occupation. 

CBO’s updated report makes no useful contribution to the discussion on Federal pay and benefits. Frankly, it’s implications are horrid. If the government were to compensate its employees so that its 

cost reflected average private sector costs by demographics, it 

would reproduce all the inequities we deplore in the private sector. 

Compensation for women and racial minorities would decline immensely. 

Regardless of the relative complexity, difficulty, and responsibilities of different jobs, what would matter would simply be the educational attainment of the person doing the job. A bachelor’s degree 

from Trump University would merit the same rate of return as a 

bachelor’s degree from Duke or Chapel Hill. The salary of a Border 

Patrol agent whose job requires only a high school diploma would 

have to match the abysmal pay of retail workers whose jobs also 

only require a high school diploma. 

The Federal Government should be proud of its pay system. Few 

in the private sector can match its fairness and internal equity. Its 

principle of market comparability and its authority for managers to 

reward high performers and punish poor performance are more 

than adequate. All that’s missing is funding. The government 

should never adopt any kind of pay system that allows discrimination on the basis of demographics. Market comparability, adherence 

to the merit system principles for—of equal pay for substantially 

equal work and fairness must continue to be the principles on 

which Federal pay is based. 

Thank you. 

[The statement of Ms. Simon follows:] 


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Mr. MEADOWS. I thank you for your testimony. 

The chair recognizes the gentleman from Ohio for five minutes. 

Mr. JORDAN. Thank you, Mr. Chairman. 

Mr. Goldenkoff, I am looking at a chart, and I have some graphs 

from your 2016 Federal Employees Performance Rating Report, 

and it is a pie chart, pie graph I should say. It says 38.8 percent 

of Federal employees were fully successful, 27.4 percent exceeded 

fully successful, and 33.1 percent were outstanding. It said only .1 

percent of all Federal employees were unacceptable performance. 

Are you familiar with this chart, this pie chart? 

Mr. GOLDENKOFF. Sure. The—so the Lake Wobegon approach to 

performance management where everybody is strong and above average —— 

Mr. JORDAN. Not everybody—well, yes, you are right, everybody. 

Ninety-nine-point-nine percent of all Federal employees got—I 

mean, if you think about back in school, it looks like, you know, 

got an A-, an A or an A+. I mean, I have never seen a classroom 

like that ever. 

Mr. GOLDENKOFF. Exactly. And we have so that that is problematic and certainly inconsistent with some leading practices on performance management that we have developed. One of them is 

making meaningful distinctions in performance. And I think, you 

know, the root cause of this and what’s so important is that, you 

know, you could make it easier to fire poor performers, and obviously, there needs to be some improvements there. But on the front 

end, the performance management process need to be improved. 

Supervisors need to do their jobs for one thing. They need to be 

able to realistically rate employees —— 

Mr. JORDAN. Well, I —— 

Mr. GOLDENKOFF.—based on their performance. 

Mr. JORDAN. Yes, and I am just looking from the practical constituent kind of perspective that I would think the good folks in the 

Fourth District of Ohio would look at it. If you have got 99.9 percent of the workforce getting an A, I think our constituents want 

to know why they have to wade eight weeks to get their passport 

or why when they call the IRS only 30 percent ever got to talk to 

an actual person when they called into the call center. I mean, if 

we have got the greatest workforce in history, you would think the 

taxpayers would get a little better treatment than they do. 

Let me turn to Ms. —— 

Mr. GOLDENKOFF. Sure. 

Mr. JORDAN.—Greszler. Ms. Greszler, is it true that—so if I got 

the gist of what you guys said, overall pay for Federal employees 

is higher than that in the private sector. Is that accurate? 

Ms. GRESZLER. Yes. 

Mr. JORDAN. Significantly higher, like 17 percent? Wasn’t that 

what someone said, one of the studies, one of your studies? 

Ms. GRESZLER. The CBO compensation was 17 percent total. 

Mr. JORDAN. Seventeen percent. All right. 

Ms. GRESZLER. I believe we found about 22 percent just for the 

pay component. We found about 30 to 40 percent for total compensation. 

Mr. JORDAN. So they get paid better. Are their benefits better for 

the folks that work in the Federal Government? 


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Ms. GRESZLER. The benefits are the significant part of the compensation bonus, yes. 

Mr. JORDAN. Right. So —— 

Ms. GRESZLER. A lot of that is the healthcare and the pensions. 

Mr. JORDAN. Yes, so they get cheaper health insurance than the 

average American gets? 

Ms. GRESZLER. Yes, and significantly greater pension benefits. 

Mr. JORDAN. They get paid better, better pension, cheaper 

healthcare, better overall benefit package, sick leave, all those kind 

of things, right? And you can’t fire them, right? 

Ms. GRESZLER. Yes. 

Mr. JORDAN. And 99.1 percent of them get an A-, an A, or an A+ 

—— 

Ms. GRESZLER. Yes. 

Mr. JORDAN.—in their performance? Wow. That is amazing. And 

yet —— 

Ms. GRESZLER. And that’s one of the reasons that you see the 

quit rate among Federal employees is one-fifth that from the private sector. 

Mr. JORDAN. Yes. 

Ms. GRESZLER. Once they’re in there, they’re not going to leave. 

Mr. JORDAN. Well, yes. You can’t blame them for that I guess, 

but this is just phenomenal for me to think—and then it to add insult to injury, all that, better pay, better benefits, better and cheaper health insurance, they can’t get fired. My guess is the reason 

you got 99.9 percent getting these successful, you know, more than 

fully successful and these ratings is because that allows them to 

jump up in pay quicker, right? You have got to —— 

Ms. GRESZLER. That’s the biggest thing we found is that moving 

up those with those effectively —— 

Mr. JORDAN. You need that —— 

Ms. GRESZLER.—automatic pay increases, they move up more 

quickly. 

Mr. JORDAN. Exactly. And all that is going on and at the same 

time you had an agency I would like to cite from time to time, the 

IRS, which, again, targeted people. I mean, so the folks like Lois 

Lerner were getting all this and targeting Americans exercising 

their First Amendment liberties. And just on a practical side, people calling in trying to get customer service trying to get answers 

to their questions during tax season, only a third of them could 

even talk to a real person. Yes. 

Ms. GRESZLER. And I would just add that for Federal employees, 

yes, they have a big compensation premium but they’re not all just 

sitting there happy and taking in this premium. I think a lot of 

them are really frustrated with the structure because —— 

Mr. JORDAN. Sure. 

Ms. GRESZLER.—it’s not rewarding those good performers. And 

because it’s so difficult for Federal managers to get rid of a poor 

performer or to even demote them or do anything to improve their 

performance, those people sit there, and it’s the high performers 

that are having to do their job. You know, they’re doing the work 

of two people to make up for that fact, and they’re not rewarded 

for it. 

Mr. JORDAN. Yes. Yes. All right. Thank you. 


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Thank you, Mr. Chairman. I yield back. 

Mr. MEADOWS. I thank the gentleman. 

The chair recognizes the gentleman from Massachusetts, Mr. 

Lynch. 

Mr. LYNCH. Thank you, Mr. Chairman. 

This committee has a long and strong history of really delving 

into some of the most important issues facing the American people, 

and it just mystifies me that we have chosen this topic. You know, 

we could be investigating, you know, the Russian interference in 

the democratic elections. We could be investigating whether the 

FBI Director was fired because he actively was investigating that 

Russian connection. We could be investigating whether the President asked the former FBI Director for a pledge of loyalty a few 

weeks back. We could have looked at whether the President specifically asked the former FBI Director to quash the investigation of 

the former NSA advisor Mr. Flynn. 

So rather than keeping the politics out of this committee, I think 

the leadership of this committee is actually suppressing a lot of the 

important issues that really should and in history have been grappled with by this committee. Instead, we are trying to figure out 

why the Federal employees, the ones with the bachelor’s degree, 

are getting paid less than their counterparts in the private sector 

and why the lowest-paid Federal employees are being paid a little 

bit more than their counterparts in the private sector. 

I think we have got misplaced priorities, we really do, on this 

committee, and I think there is a hell of a lot more we could be 

doing about issues that are real. 

Now, I know this hearing comes up once every year basically or 

once every two years to look at the wages of Federal employees, but 

what I have got from the testimony so far is that Federal employees are treated better because they get tuition reimbursement. But 

as far as the Federal Government as an employer, we should be 

doing that. We should be encouraging private sector to provide tuition reimbursement so we can educate our workers. That is a good 

thing. 

They get childcare. You know, that is an advantage that some 

Federal employees have. They have a childcare facility right in the 

building, and that is a good thing. But we are being told you should 

take that away so that they would be more like the private sector 

or you should take the tuition reimbursement away because that 

would make them more like the private sector and close that gap. 

Or they have flexible hours, and we can’t have people have flexible 

hours, so take those flexible hours and make those Federal employees more like the private sector. 

Or take away their pensions. So let me get this straight. We 

have got a pension crisis. We have a retirement crisis in this country because everyone is on a 401(k). And after working for 30 years 

or 35 years, at the end of their working lives they don’t have 

enough money in their retirement to have a decent living, so they 

go on Federal benefits, and they have the taxpayer have to support 

them because they have to have Meals on Wheels. They have to 

have all kinds of subsidies because they weren’t allowed to accrue 

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that they have to rely on government. They qualify for government 

benefits. 

So we are supposed to make Federal employees more like that, 

take away their pensions, take away their pensions and just give 

them 401(k)’s so at the end of their lives they won’t have enough 

money to retire with dignity and they can go on government benefits and we will pay them that way. That is ridiculous. That is ridiculous. 

And the COLAs that we give people have been pitiful. Wages are 

flat in this country. So with all we have got going on, with everything we have got going on at the White House, we are focusing 

on this. You have got to be kidding me. 

So I have got docs at the VA that are making about 75 percent 

what they could be making in the private sector. I got nurses at 

the VA that have way too many patients, and they are making 

about 60 percent what they could be making at a private hospital. 

I have got therapists at the VA that have way too many patients, 

and they are making about half of what they would be making if 

they went over to the Mass General or Tufts or one of the private 

hospitals in my district. And so we are going after these people. 

I think our priorities are misplaced, Mr. Chairman, and I thank 

him for his indulgence, and I yield back the balance of my time. 

Mr. MEADOWS. I thank the gentleman. I would remind the gentleman on some of those issues he and I are not apart. And —— 

Mr. LYNCH. No. Let me just make that clear. I have worked with 

the chairman on many, many issues, and we are in harmony with 

much of what I just said. 

I yield back. Thank you. 

Mr. MEADOWS. All right. I thank the gentleman. 

The chair recognizes the gentleman from Alabama, Mr. Palmer. 

Mr. PALMER. Thank you, Mr. Chairman. I just want to make a 

couple points about wage stagnation since our colleagues have 

brought that up. 

Wage stagnation has—there are many causes for that, and I 

would like to point out the National Small Business Association’s 

annual survey of their members, employers reported the average 

cost of their monthly health insurance premiums per employee increased from $590 in 2009 prior to the Affordable Care Act to 

$1,121 in 2014. And I would like to point out that is before the 

major increase in premiums that we have seen in the last year or 

so. And in addition to that, they paid out another $458 a month 

just in other healthcare-related costs per employee. So when you 

are spending that kind of money on increases in health insurance 

premiums and healthcare costs, it will necessarily reduce the 

amount that you have to pay in wages. And it still is compensation. 

The other thing I want to point out is the American Action 

Forum, which tracks the cost of regulation, reported that the 

Obama administration levied $181.5 billion in regulatory costs just 

in 2014. That is $692 per capita for each American, which drives 

down people’s spending power. And that is a hidden cost. 

Ms. Greszler, get back to the topic—and by the way, if we want 

to have a discussion about stolen elections, I think it would be appropriate to bring Senator Sanders in. Thank you, Mr. Chairman. 


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What would shifting to a defined contribution retirement system 

look like for Federal Government workers, Ms. Greszler? 

Ms. GRESZLER. So the way that I’ve envisioned it is anybody with 

25 years or more service would be grandfathered into the current 

system. Nothing’s going to change for them. For all new hires or 

anybody that has fewer than five years of service, those people who 

have not yet become vested in their pensions, they’d be shifted to 

defined contribution system just playing on the existing Thrift Savings Plan that Federal employees already have. And so the contribution to that for the government currently is between 1 percent 

and 5 percent. That would increase to between 4 percent and 8 percent. 

Existing Federal employees with between 5 and 25 years of service would have three different choices. They can do the same thing 

that the new hires are doing and they can shift entirely to that defined contribution system with a much higher match and overall 

contribution, and they can choose to take essentially a lump sum 

benefit. Everything that they’ve accrued in their pension, they take 

that value and it goes into their Thrift Savings Plan. 

Alternatively, they could choose to basically freeze their defined 

benefit pension as it is. They keep everything that is accrued. 

They’ll still have a defined benefit pension in retirement, but going 

forward, they’re in that new system and they have the higher contribution to their Thrift Savings Plan. Or they can stay in the existing system, you know, can keep the same level of defined benefit 

but there will be some changes going forward only, nothing taken 

away because this was part of their compensation, and I would 

never argue that we should take away something that was really 

a past—it was essentially in their paychecks. So we don’t take that 

away, but going forward, they would probably pay a little bit higher percentage of their overall contribution, the retirement age may 

increase, and some other small changes along those lines. 

Mr. PALMER. Can you give me a fairly brief answer on what kind 

of cost savings we could expect for making those changes? 

Ms. GRESZLER. Well, the pensions is the biggest component. Add- ing in everything altogether, we’ve estimated $330 billion over 10 

years. 

Mr. PALMER. Mr. Kile or Mr. Biggs, one of you, if you could answer this. Do you have any way to measure productivity in the 

Federal workforce as you would, say, in the private sector? I mean, 

when you have 99-point-something percent of people who are excellent, wouldn’t that indicate that productivity is off the charts? 

Mr. BIGGS. It is difficult—when I was at the Social Security Administration, we made efforts to measure productivity but it tended 

to be a measure of outputs, the number of cases handled. A true 

measure of productivity measures the cost of inputs, the labor 

costs, the compensation costs, in order to then figure out the improvement of the outputs. I don’t think the Federal Government 

does a particularly good job of measuring productivity, although I 

will say it is not an easy thing. 

Mr. PALMER. Can you answer it in the context of the point Mr. 

Jordan made about they were only responding to 30 percent of the 

calls? I think that was the number he gave. Wouldn’t that indicate 

a productivity problem? 


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Mr. BIGGS. What you want to know is how productivity grows 

over time and how many calls they’re getting in. It’s not a straightforward thing to answer. And I’ll admit I don’t know the IRS very 

well so I don’t want to act as if I know more than I do. 

Mr. PALMER. All right. Mr. Kile, last question. What effect does 

the outdated nature of the current GS schedule have on hiring? 

Mr. KILE. So that’s actually one of the things that we would like 

to know more about. We don’t have a very good sense of the data 

on hiring and retention and recruitment, and I think that in understanding the—both the current compensation system and others 

that might take its place, we would need to look further into that. 

Mr. PALMER. Okay. Thank you, Mr. Chairman. I yield back. 

Mr. MEADOWS. I thank the gentleman. 

The chair recognizes Mrs. Watson Coleman. 

Mrs. WATSON COLEMAN. Thank you, Mr. Chairman. I think I 

want to concentrate a little bit on the issue of benefits, particularly 

healthcare benefits. 

An article published in New York Times last year found, and I 

quote, ‘‘The first full year of the Affordable Care Act brought historic increases in coverage for low-wage workers and others who 

have long been left out of the healthcare system.’’ The New York 

Times also found, and I quote, ‘‘Part-time workers gained insurance 

at a higher rate than full-time workers, and people with high 

school degrees gained it at double the rate of college graduates.’’ 

Unfortunately, Republicans now want to take away health care 

from the most vulnerable citizens, including working Americans 

who gained health care thanks to the Affordable Care Act. And the 

latest Trumpcare bill would do just that. 

Mr. Kile, House Republicans forced the revised Trumpcare bill 

through the House before the CBO could even come up with the 

score. However, CBO’s score of Trumpcare as it was first introduced found that under that bill, and I quote, ‘‘In 2018 by CBO and 

JCT estimates, about 14 million more people would be uninsured 

relative to the number under current law. That increase would consist of about 6 million fewer people with coverage obtained in the 

nongroup market, roughly 5 million fewer people with coverage 

under Medicaid, and 2 million fewer people with employer-based 

coverage.’’ 

I know you didn’t work on the score, but am I understanding this 

correctly? In addition to ripping away health care from the millions 

of people who buy coverage in their individual market and rely on 

Medicaid, that the Trumpcare bill, as originally proposed, would 

also reduce the number of working Americans who get their health 

care through their employers by 2 million by 2018? Yes or no? 

Mr. KILE. Congresswoman, I’m afraid that you’ve left my area of 

expertise. I’d have to refer you back to both CBO’s cost estimate 

of that bill and my colleagues back in the office. 

Mrs. WATSON COLEMAN. Good. Good thing we have a record of 

it. 

CBO also found that the number of people obtaining health care 

through their employers would fall by, and I quote, ‘‘roughly $7 

million by 2026.’’ And some of this reduction in employer-based 

health coverage in the U.S. would occur because employers would 

simply stop offering healthcare insurance. Trumpcare also reduces 


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the amount of tax credits people receive to help them pay for insurance, so in addition to losing their employer-provided health care, 

these workers may be left with less financial support to purchase 

insurance on their own. 

Finally, I think it is important to keep in mind that repealing the 

ACA would harm all Americans, including those who get insurance 

through their employers, by doing away with important consumer 

protections like no annual and lifetime limits on benefits, free preventive care, and out-of-pocket spending limits. 

Ms. Simon, is it true that all workers have benefited from the Affordable Care Act? 

Ms. SIMON. I believe the answer is yes, but I can really only talk 

about Federal employees and the Federal Employees Health Benefits Program. Immediately, the Federal Employee Health Benefits 

Program adopted all the benefits of Obamacare that you’ve just 

listed and others, including coverage of dependent—or not dependent children, children up to age 26, the essential benefits package, 

and lifetime maximums and the requirement that ultimately limited the profits that insurance companies can take from premium 

payments. 

Mrs. WATSON COLEMAN. Well, I —— 

Ms. SIMON. So Federal employees —— 

Mrs. WATSON COLEMAN. Thank you. 

Ms. SIMON.—certainly benefited. 

Mrs. WATSON COLEMAN. Thank you. And certainly, Federal employees seem to be the target of this discussion today, and I believe 

that this proposal that we are under right now is both harmful to 

them, as well as to employees in the private sector. 

I think it is also important to note that we should be creating 

good jobs. We should be encouraging better distribution of all of the 

sort of revenue that streams through private sector. We should be 

concerned that lower-wage workers who are working out in the private sector are getting a livable wage. We should be concerned in 

this country that we have a minimum wage that is a living workable wage. We should not be looking to dummy down. We should 

be looking to elevate. 

And we should also look to the fact that those who represent the 

very wealthiest and the smallest percentage of people in this country have had no problem with their revenue streams increasing exponentially. And the difference between what a worker gets paid, 

a good educated worker, an uneducated worker, and a CEO is just 

un-American. 

Thank you, and I yield back. 

Mr. MEADOWS. I thank the gentlewoman. 

Ms. Simon, I want to make sure that you can hopefully clarify. 

You didn’t mean to say that everybody benefited from the Affordable Care Act. I think that is what you told her, but I wouldn’t 

think that you actually meant that, did you? 

Ms. SIMON. I believe—I did mean that, and that’s how I understood her question. 

Mr. MEADOWS. So your recommendation —— 

Ms. SIMON. She asked if —— 

Mr. MEADOWS.—then would be that we ought to move all Federal 

workers into the Affordable Care Act? 


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Ms. SIMON. That was not my recommendation. I answered the 

broad question —— 

Mr. MEADOWS. But if everybody benefits, wouldn’t it be best that 

everybody is on it? 

Ms. SIMON. Obamacare—the law that established what we now 

call Obamacare —— 

Mr. MEADOWS. Well, I am going to recognize the gentleman from 

Georgia, Mr. Hice —— 

Ms. SIMON. Okay. 

Mr. MEADOWS.—because he is next, but I will come back to that. 

Ms. SIMON. Sure. 

Mr. MEADOWS. I will give you some time to think about it. 

Mr. HICE. Thank you, Mr. Chairman. I appreciate it. And yes, I 

would say the previous questioning was totally misguided, realizing 

that Federal workers are not on Obamacare while the rest of Americans have been forced on that. The Federal Employees Health 

Benefit Program is quite a bit different, and we can’t compare that 

at all. 

I want to shift gears. Mr. Kile, I want to come over to you. I am 

sure you are familiar with official time, which enables Federal employee union members to be hired by whatever agency they may be 

hired for, but instead of doing the work they were hired to do, they 

work for the union in multiple ranges, some 100 percent and some 

quite a bit less. My question to begin with is did the CBO analysis 

take official time into consideration? 

Mr. KILE. So we didn’t measure that specifically. We—our data 

was from what’s known as the current population survey and —— 

Mr. HICE. Okay. Why not? Why was official time not considered? 

Mr. KILE. In those—data on those types of activities are not 

available in that data set. 

Mr. HICE. Okay. So not available because of reporting problems 

or what? 

Mr. KILE. It’s a measurement issue, yes. 

Mr. HICE. Okay. So bringing that up, our friend Mr. Ross is not 

here, but he has a bill that would—that in fact hopefully we are 

going to be voting on this relatively soon, perhaps even next week, 

H.R. 1293, that would require some reporting of official time. Are 

you familiar with that legislation? 

Mr. KILE. I’m not, Congressman. 

Mr. HICE. Okay. Twelve ninety-three would be worth getting familiar with that. If we have proper reporting requirements for 

those on official time, if that were available, would that change the 

CBO’s analysis in looking at it? 

Mr. KILE. I don’t know. We’d have to do that analysis in order 

to get an answer to that question. 

Mr. HICE. Okay. Well, according to CBO’s own described definition of official time, it is, quote, ‘‘paid time off from assigned government duties to represent a labor union.’’ Now, that is CBO’s definition. So how can paid time off not be considered compensation? 

Mr. KILE. That—our—the time off is a measure of the benefits 

that we provide in our analysis. 

Mr. HICE. The paid time off is but not when it relates to official 

time, which many Federal employees are using 100 percent of the 

time. 


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Mr. KILE. And what we’re measuring is—what we’re taking is 

what’s in the data, hours worked, and in that data they don’t report the activities that they were doing when they were working. 

Mr. HICE. Okay. Well, I am not worried about the activities. The 

fact is, though, if they are using official time—if official time is not 

considered compensation, what is it considered? 

Mr. KILE. Official time would be considered compensation. 

Mr. HICE. Okay. But it is not analyzed because of reporting 

issues. 

Mr. KILE. Well, what we don’t have is the breakdown of—the employees report the hours that they work, the number of hours that 

they work. They don’t report what they were —— 

Mr. HICE. That is official time. Okay. Well, hopefully, we are 

going to be able to get that corrected, and I look forward to—I have 

a bill myself, H.R. 1364, that would prohibit Federal employees 

who are using 80 percent or more of their time on official time in 

any given year, that they would not—that year would not be counted as creditable service for retirement benefits at 80 percent or 

more. I would appreciate you looking at that. And I look forward 

to CBO including official time, future compensation studies, as part 

of the analysis. I think all of this is skewed if we are not taking 

this into consideration. 

Mr. Biggs, let me come to you real quickly. It has come up multiple times already, the problem with firing Federal employees, bad 

actors in this thing. They have multiple avenues of appeal all 

through the process. There is no way this cannot be considered a 

job security benefit, is that correct? 

Mr. BIGGS. That’s correct. If you look at surveys of employees 

done by human resources consultants, pay benefits and job security 

are the three most important things —— 

Mr. HICE. And if you can’t fire someone, that is pretty good job 

security, or if you make it so difficult that it literally is an act of 

Congress to fire someone, that is pretty significant job security. 

Mr. BIGGS. Sure. And it’s—there’s two components to it. One is 

it’s very unusual for a Federal employee to be fired for cause. The 

second is it’s very unusual for there to be layoffs. So you can look 

at unemployment rates for Federal Government employees. They 

are probably half those of similarly educated and experienced private sector workers. 

Mr. HICE. Okay. 

Mr. BIGGS. So that’s a benefit that’s not included in this sort of 

analysis. 

Mr. HICE. Besides lengthening the probationary period, what else 

can be done to address this problem? 

Mr. BIGGS. Well, there—I mean, there’s a variety of things. One 

is, as Mr. Goldenkoff said, of encouraging Federal managers to use 

the powers that they already have, to not be afraid to use what 

rights they do have. I think it’s also in terms of—I mean, employees deserve due process, but due process should not be so lengthy 

and costly that it is cheaper to keep on an employee who is not performing than it is to try to fire them. And this is a problem you 

find throughout the public sector. It is not worth the time and the 

money and the effort to fire an underperformer. Rather, you simply 


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move them aside so that they don’t—or they’re not an impediment 

to the vast majority of workers who are doing a good job. 

But, you know, it is—the private sector manages to do this—private sector firms don’t want to fire good performers. They don’t 

want to scare their workforce. So I think there’s reason the Federal 

Government can do this, and it’s really a question of putting in the 

effort and really being dedicated to it. 

Mr. HICE. Thank you. I wish we had time to hear from each of 

you on this, but I appreciate your indulgence. 

Mr. Chairman, I yield. 

Mrs. WATSON COLEMAN. Mr. Chairman? Mr. Chairman, I have 

a—I seek a right of personal privilege. 

Mr. MEADOWS. Okay. 

Mrs. WATSON COLEMAN. Thank you very much. I just want to 

sort of acknowledge my colleague’s comments regarding my line of 

questioning that I have to question his ability to question my line 

of questioning because he cannot determine for me what is or is not 

relevant but to discuss the issues of —— 

Mr. MEADOWS. The gentlewoman will state —— 

Mrs. WATSON COLEMAN.—salaries —— 

Mr. MEADOWS. The gentlewoman will state her point of personal 

privilege. 

Mrs. WATSON COLEMAN. This is my point of personal privilege. 

My point of personal privilege is that the discussion of this ill-advised Trumpcare healthcare initiative as it represents a component 

of benefits to both employees in Federal Government and outside 

Federal Government is a line of questioning that is worthy of pursuing and that if my colleagues just feel a need to be able to run 

away from that whole issue of that ill-conceived Trumpcare bill, I 

can certainly understand it. 

Mr. MEADOWS. Okay. The —— 

Mrs. WATSON COLEMAN. But I shan’t accept anyone’s characterization —— 

Mr. MEADOWS. Okay. The chair will —— 

Mrs. WATSON COLEMAN.—of the appropriateness of my questions. 

Mr. MEADOWS. The —— 

Mrs. WATSON COLEMAN. Thank you. With that, I yield back. 

Thank you, Mr. Chairman. 

Mr. MEADOWS. The chair will remind all members on both sides 

that they are to keep personalities out of their line of questioning. 

They are to direct their questions to the witnesses without personalities involved. 

Ms. Plaskett from the Virgin Islands is recognized. 

Ms. PLASKETT. Thank you, Mr. Chairman. 

First, I think it is interesting, Mr. Biggs, the notion that job stability is a benefit. It seems to be a very anti-American notion that 

you are counting as a benefit of a job the fact that someone has 

the job and is assured of a job when we as Americans are trying 

to keep our economy stable so that all people can be assured of 

work. That seems to me a very unusual position for you to be 

equating and wrapping into data analysis of job benefits. 

Mr. BIGGS. If you—you can literally go back to Adam Smith who 

is the—you know, the first —— 

Ms. PLASKETT. Yes, I know who he is. 


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Mr. BIGGS.—the founder —— 

Ms. PLASKETT. Economics. 

Mr. BIGGS.—of economics, and what he noted is that certain jobs 

will have more stability than other jobs. And what he noted then 

is that jobs that have less stability to them will pay a premium to 

the worker to compensate them for that risk. You find the same 

thing, jobs that are more dangerous or more unpleasant pay a compensating differential for that risk. So—and there is research showing that jobs that are in the private sector that are more secure, 

that have less risk of being fired or laid off will pay slightly less 

than jobs that have more of that risk. It’s a compensating payment 

for that risk. 

Ms. PLASKETT. I don’t know if steelworkers would necessarily 

agree with that, with the amount of pay that they’ve received, or 

cotton pickers would agree that that was baked into the analysis 

of the job —— 

Mr. BIGGS. What I—the way —— 

Ms. PLASKETT.—skills that they were getting. 

Mr. BIGGS.—I’d respond to you is if you were to go looking —— 

Ms. PLASKETT. I don’t need you to respond —— 

Mr. BIGGS. Okay. Then —— 

Ms. PLASKETT.—but thank you. 

Mr. Kile, CBO recently found that on average Federal employees 

receive more generous benefits than private sector workers. Your 

analysis showed that the cost of benefits provided to Federal workers was 47 percent higher than the cost of benefits provided to private sector workers, and benefits for Federal employees with no 

more than a high school education were 93 percent higher than for 

similarly educated workers in the private sector. Is that correct? 

Mr. KILE. Yes. 

Ms. PLASKETT. And CBO also found that the higher cost of the 

benefits Federal workers receive compared to the benefits private 

sector workers receive can be attributed mostly to the differences 

in retirement benefits. Was that how the analysis went? 

Mr. KILE. Yes, that’s correct. 

Ms. PLASKETT. Okay. Your report states that Federal Government provides both defined benefits and defined contribution plans 

to its employees. And it is my understanding that a defined benefit 

plan is like a traditional benefit plan, and a defined contribution 

plan is more similar to a 401(k) or in the case of Federal employees, the Thrift Savings Plan. Do I have that right? 

Mr. KILE. Yes. 

Ms. PLASKETT. All right. In contrast to the Federal Government, 

in the private sector employers no longer offer defined benefit plans 

or pensions. They’ve been replaced primarily with 401(k) plans? 

Mr. KILE. Primarily. There are still some places that offer defined benefit plans, but they’re —— 

Ms. PLASKETT. Is that percentage —— 

Mr. KILE. I don’t —— 

Ms. PLASKETT.—significant? 

Mr. KILE. It’s—it—I don’t have that number in front of me. 

Ms. PLASKETT. Okay. It is my concern and fear of many of us 

that many of my colleagues, my Republican colleagues will be using 

CBO’s report in this hearing to justify eliminating pensions for 


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Federal employees. I know that our Chairman Chaffetz has said in 

the past that he wants to get rid of Federal pensions by shifting 

to a 401(k)-type plan for new employees in the Federal Government. We have information that retirement experts have warned 

that the vast majority of Americans are not saving enough for such 

a savings plan. 

Ms. Simon, do you agree that the Economic Policy Institute’s 

findings, which state that the shift from pensions to account-type 

savings plans have been a disaster for lower-income, black, Hispanic, non-college-educated, and single workers who together add 

up to the majority of American population, but even among upperincome, white, college-educated married couples, many do not have 

adequate retirement savings. What are your feelings about that 

conclusion? 

Ms. SIMON. I think it’s entirely accurate, and it’s warranted. The 

most recent data I’ve seen is that less than half of all private sector 

workers are covered by any kind of employer-sponsored pension 

plan or retirement plan at all. And among those who have some 

kind of a 401(k)-type savings plan as part of their employment get 

no employer match or no employer contribution at all to their 

401(k). 

So of course this is a horrible retirement crisis in the making, as 

Representative Lynch was describing earlier. At the same time that 

private employers have abandoned providing any kind of financial 

subsidy for their employees’ retirement, wages and salaries have 

stagnated for the vast majority of workers, bottom 80 percent —— 

Ms. PLASKETT. Thank you. 

Ms. SIMON.—of the income stream. So absolutely, the EPI’s findings are accurate and —— 

Ms. PLASKETT. And concerning to you as an organization —— 

Ms. SIMON. Absolutely. 

Ms. PLASKETT.—representing Federal employees? 

Ms. SIMON. Absolutely. 

Ms. PLASKETT. Thank you. And with that, I yield back. Thank 

you. 

Mr. MEADOWS. I thank the gentlewoman. 

The chair recognizes the gentleman from Tennessee, Mr. Duncan. 

Mr. DUNCAN. Well, thank you, Mr. Chairman. And I did get to 

hear your opening statement and the opening statement of the 

ranking member, but I had some other meetings I had to go to so 

I apologize if I get into an area that has already been covered. 

But I will say this. I agree with the chairman and the ranking 

member and others that we have many good, dedicated, wonderful 

Federal employees. I will say, though, that I saw a statistic not 

long ago that said 58 percent of the people in this world have to 

get by on $4 or less a day. We have got hundreds of millions who 

would like to come here and get minimum wage jobs, so all of us 

are very blessed to live in this country. 

And I was asked by a school group last year one time, did I like 

my job? And I said yes, I have always felt very lucky to have my 

job. And I said I had read a brief Bible study the day before that 

said if you don’t feel very lucky to have your job, just think how 

you would feel if you were fired that day. 


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And so what I see as sort of unfortunate, almost everybody wants 

to make themselves to be some kind of victim today. And so I have 

heard and seen articles about the low morale of Federal employees 

and so forth and how tough they have it, yet compared to the great 

majority of the people, they are pretty well off. 

So let me ask you this. So we have some stuff in the briefing material that says there are too many appeal options. And I noticed 

that Mr. Hice had just I think gotten into that maybe it being too 

difficult to get rid of a bad employee, says ‘‘too many appeal options 

lead to unearned pay increases and poor performer retention.’’ Is 

that accurate, do you think? Does anybody have a comment about 

that? Do you think we have too many appeal options and that that 

does lead to some unfairness? 

Ms. SIMON. I’d like to answer that question. 

Mr. DUNCAN. Yes, ma’am. Go ahead. 

Ms. SIMON. I think that there are numerous ways that Federal 

managers can get rid of poor performers or employees who engage 

in misconduct. The GAO, OPM, the MSPB have all done very comprehensive studies of those questions and found that it is not legal 

authority that’s lacking; it’s willingness to take on the responsibility that Federal managers have to their agencies, to taxpayers 

to document evidence to make sure that people who are—that the 

allegations of poor performance or misconduct are valid. That’s all 

that’s required. 

If we don’t have the protections as taxpayers to know that our 

Federal agencies are being staffed by people who have their jobs 

on the basis of their objective qualifications rather than their political affiliation or any other kind of non-merit factor are, then we’ll 

have a corrupt government. These protections that Federal managers whine and complain about actually protect the public from 

corrupt government, from agencies hiring people —— 

Mr. DUNCAN. Well, before I —— 

Ms. SIMON.—for non-merit reasons. 

Mr. DUNCAN. Before I run out of time, let me ask you this. Does 

anybody know what—can anybody tell me what percentage of Federal employees are fired or removed in any one year? Ms. Greszler? 

Ms. GRESZLER. Yes, I believe it’s .3 percent —— 

Mr. DUNCAN. Point three percent. 

Ms. GRESZLER.—are dismissed or fired. 

Mr. DUNCAN. What percentage of Federal employees leave each 

year to go into the private sector? Do we know that figure? 

Ms. GRESZLER. I don’t know that one. I would add, though, on 

here that a big impediment here is the performance improvement 

plan process. And yes, I recognize that managers are choosing not 

to follow a lot of these procedures that they would need to do in 

order to fire or even to demote or write an employee less than fully 

successful. They’re choosing out of experience. I’ve had Federal 

managers call me and say, yes, there are some avenues we can do 

here, but the legal hurdles are so high, such a high burden of proof. 

On average, it takes a year-and-a-half to fire a Federal employee. 

Now, if you’re running a private business, that’s absurd to have an 

employee there that is a poor performer or actually sometimes impeding the mission of the organization or harming it, and yet you 


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can’t get rid of them for a year-and-a-half? I mean, that’s ridiculous. 

Mr. DUNCAN. Let me go in one more direction —— 

Ms. SIMON. That is not true. 

Mr. DUNCAN. My time is up, but just let me ask this. I have 

heard for years that Federal agencies spend 60 percent of their 

money in the first 11 months, and then they scramble around and 

try to spend the rest of it so that their budgets will be cut. Do you 

think that—in fact, I have introduced a bill to give bonuses to Federal employees if their department or their agency saves money, we 

would split half the money for bonuses and half the money would 

go back towards the deficit. Does anybody have an opinion as to 

that type of—a bill similar to that? Do you think that would be feasible or would work? 

Ms. GRESZLER. I think that you definitely need greater ability 

and greater performance-based budgets to factor in there. The one 

thing you just want to be careful of is, is there going to be a push 

for those managers to get a higher budget next year so that he can 

—— 

Mr. DUNCAN. Right. 

Ms. GRESZLER.—then use some of that towards the performancebased bonuses. 

Mr. DUNCAN. Well, the problem —— 

Ms. GRESZLER. But certainly, they do need more —— 

Mr. DUNCAN. The problem is that people get paid the same 

whether they work hard or whether they work easy, so you need 

to have some incentives or pressures that—they don’t have the 

same pressures that are out there in the private sector. 

Thank you, Mr. Chairman. 

Mr. MEADOWS. I thank the gentleman. 

The chair recognizes the gentleman from Virginia for a very generous five minutes. 

Mr. CONNOLLY. I thank the chair. And I do want to say—I want 

to compliment the chairman. I hope this doesn’t hurt him, but he 

has gone way beyond ideology on Federal employee issues. And we 

have worked together. He has made it his business to visit places 

of employment and listen to employees, to listen to what is happening in the workplace. And I think he would say it has informed 

him and given him some perspective. I wish more of our colleagues 

would take—I have done the same, and I really salute him. He has 

taken his job here seriously. I have got to get to know the territory, 

you know, the old line from The Music Man. You have got to know 

the territory. And I salute Mr. Meadows for that effort. 

Ms. Greszler, I take your point that sometimes we have got a 

troubled employee, may be ethically challenged, behaviorally disruptive, whatever it may be, and it takes a year-and-a-half, a process that seems never-ending, an appeal may restore them, drives 

all of us crazy, but isn’t there another side to the coin and the balance is what we are trying to get at? We want to streamline that, 

but we also want to be fair. There is something called due process. 

Courts have upheld it, that Federal employees are entitled to due 

process even though sometimes that may aggravate us in terms of 

how long it takes or even the end result. And we need to respect 

that, too, do we not? 


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Ms. GRESZLER. No, we do, and they need due process. But I think 

what we have now is an overly burdensome hurdle. The proof required for firing Federal employees exceeds that of the private sector, and I think there are things that we can do to streamline and 

make that possible. I mean —— 

Mr. CONNOLLY. Yes, I understand, and I am not unsympathetic, 

but I will tell you as someone who represents a lot of Federal employees and Federal contract employees, there is still a lot of discrimination, favoritism, nepotism, outright outrageous discriminatory behavior, sexual harassing behavior, racially hateful behavior 

that goes on in a workforce as large as the Federal Government. 

And trying to make sure there are some protections for the victims of that and trying to hold people to account are really important because sometimes the perpetrators make the victims, you 

know, the employees who get discharged or demoted or exiled to, 

you know, Nome, Alaska, or someplace where they are sort of out 

of sight and out of line. I don’t mean to pick on Alaska; it is a beautiful State. 

So I just want to suggest to you that it is a complicated picture, 

and some of the protections, though they have become may be more 

brittle than we would like over time and very juridical on the other 

hand are there for a reason. 

Ms. Simon, I wondered if you wanted to comment on that? Because I see both sides of this in the job I have got. 

Ms. SIMON. First of all, it doesn’t take a year-and-a-half to fire 

a Federal employee. In most cases, certainly in cases of misconduct, 

an employee is off the payroll in 30 days or, you know, an even 

shorter period of time depending on the circumstances. If it takes 

a year-and-a-half and if the agency fails in its efforts to remove a 

poor performer or someone who has been proven to have engaged 

in misconduct, that is not a problem with the process. That is not 

a problem with the evidentiary burden. That is a problem with the 

agency and its managers and their own abilities to document what 

they allege. They make procedural errors. They do all kinds of 

things that are wrong. They propose a penalty that does—is not 

commensurate with the alleged offense. 

Mr. CONNOLLY. And if I may interrupt because I have experienced this. And sometimes people who are sort of a problem are in 

positions of power and they just stonewall —— 

Ms. SIMON. Well —— 

Mr. CONNOLLY.—which takes time. 

Ms. SIMON. As—we had a Senate hearing yesterday in the VA 

Committee, and our national president asked rhetorically if anyone 

thought that the firing that’s been in the news this last week was 

an unusual occurrence, if they thought it never happened in other 

Federal agencies where people were fired in order to—an executive 

fired a subordinate in order to cover up that executive’s own misdeeds. There are all kinds of miscarriages of justice that would 

occur in the absence of high—the current evidentiary standards for 

allegations of misconduct. And it is very, very foolish to consider 

lowering those standards so that people can just be fired willynilly. We’ll get a very, very bad and corrupt Federal Government 

if we do so. 


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Mr. CONNOLLY. I thank you. Is the Chairman going to give me 

one more minute? I thank the chair. See, if you compliment the 

chair, you get extra time, a wonderful chair, have you all noticed? 

So I just have one more. Thank you both. 

Mr. Goldenkoff, you stated the Federal compensation system 

should allow the government to cost-effectively attract, motivate, 

and retain high-performing agile workforce necessary to meet these 

missions. You know, my impression from years of working in and 

with the Federal Government and representing so many Federal 

employees is that we are nowhere near that standard. We have got 

a long way to go in streamlining hiring process, making it easier, 

less bureaucratic, less paper-dominated, and frankly figuring out 

how do we attract that new generation that is going to replace a 

third of the Federal workforce that is eligible for retirement in the 

next three or four years? How do we appeal to millennials? I mean, 

how do I say to Ms. Greszler I see a 30-year Federal career in your 

future, you know? And we are part of the problem up here. 

And I just wonder if you could expand on that a little bit. What 

we need to do to be more flexible and to attract and retain the talent of the future, which is the immediate future I might add, not 

far away. 

Mr. GOLDENKOFF. It’s—well, as you mentioned, I think flexibility 

is the key. It’s not a one-size-fits-all approach so, you know, I know 

the focus of this hearing is pay, but pay is not the only thing. You 

know, even if we could assume for the moment that we could come 

up with the ideal pay system, it still does no good if your 

onboarding processes are inadequate, if you don’t make effective 

use of their talents, if you don’t aggressively recruit them, if once 

they do come on board if you don’t develop them, if they’re not 

given effective supervision, and it’s also a matter of work-life balance programs. And it needs to be tailored to individual labor markets. It needs to be tailored to individual occupations. So—and 

we’re just not doing that effectively right now. 

Mr. CONNOLLY. I thank the chair for his indulgence. Thank you 

all so much for being here today. 

Mr. MEADOWS. I thank the gentleman for his kind remarks, and 

I would let the record reflect that his additional time was really in 

the spirit of fairness because Mr. Duncan went over and not because of any wonderful embellished remarks to my benefit. 

Mr. CONNOLLY. Well, yes, and for the sake of the media back 

home in North Carolina, I wish we could work with Mr. Meadows. 

He is just too conservative for all of us. 

Mr. MEADOWS. I thank the gentleman. 

The chair recognizes Mr. Grothman for five minutes. 

Mr. GROTHMAN. Okay. First of all, I would like to thank Mr. 

Connolly for the comments. I don’t have a lot of Federal employees 

in my district. I haven’t heard complaints from him, but if he says 

Federal Government is a hotbed of racism and sexual harassment, 

I will take him at his word. I mean, it is something you have got 

to look out for. 

Mr. CONNOLLY. Would my friend yield just for a second? 

Mr. GROTHMAN. Sure. 

Mr. CONNOLLY. I know my friend knew I was simply pointing out 

that in a big workforce, you know, there are some bad apples. I in 


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no way was characterizing or meant to characterize that as the 

Federal workforce. My experience is the opposite. The Federal 

workforce is a dedicated group of workers, as the chairman said at 

the beginning of the hearing. 

I thank my friend for yielding. 

Mr. GROTHMAN. Okay. Okay. I just wanted to clarify that. Okay. 

I went a little bit overboard. 

Okay. Now, I have got a question for you guys to lead off, and 

I don’t really see it in here, but one thing that I always find when 

I deal with government employees, obviously, many of them are 

regulatory and many of them seem to just be—I assume they are 

nice people in their own lives, but they seem to be completely out 

of touch with dealing with the public, be it individuals or businesses, you know, putting burdens on them that they would never 

think to put on themselves. And I always wish more of them had 

spent some time in the private sector so they would realize how 

they look when they come across to the public. 

Does anybody have any information, say, on the number of—particularly on the regulatory agencies the number of government employees who spend, say, at least five years in the public sector before being hired or how many just came straight out of college, 

which would lead to the lack of common sense that you sometimes 

see in the Federal Government? 

Mr. BIGGS. I don’t have data on that directly, but I completely 

agree with you that there is not very much flow from the private 

sector to government and back. And I think that leads to some of 

the bigger misperceptions that we sometimes see here. Ms. Simon 

cited some statistics claiming that Federal employees are underpaid by 34 percent. If you were to ask most Federal employees, 

most believe they can make more money in the private sector than 

they do in government. 

I have done some work where we tracked the—you know, the relatively small number of people who shift from Federal employment 

to private sector jobs. Rather than getting a big pay increase, most 

of them actually got a pay reduction. We also tracked people who 

went from Federal—from private sector jobs to the Federal Government. Most of them got pay increases. 

I think the lack of shifting between the two, though, leads to an 

insularity where you’re not aware of what’s going on in jobs outside 

the private sector but also the concentration of Federal employees 

within the Washington, D.C., area may lead to, you know, lack of 

understanding or knowledge of what’s going on outside of Washington, D.C. The—five of the 10 richest counties in the United 

States are in the Washington, D.C., suburbs, and that’s not to say 

anything bad about people who live in Washington, D.C., but you 

may not understand exactly what’s going on in the rest of the country. 

Mr. GROTHMAN. Yes. 

Mr. BIGGS. But most of the Federal workforce is outside of D.C. 

Mr. GROTHMAN. Right, right. Maybe I will ask Ms. Simon. You 

see what I am getting at. Okay. If you work for a company and 

somebody from the EPA comes in and says, oh, here, you know, I 

know you just put in this new equipment four years ago, but the 

rules have changed, times have changed, you know, spend another 


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$10 million or whatever, you know, and that is maybe an exaggeration. But that is the sort of thing you hear. And you wonder, my 

goodness, do you know what it feels like to be on the other end of 

the phone? 

Is there any effort made to say before we hire a new person in 

a regulatory agency to see if they spent, you know, five or 10 years 

on the other end of the phone? I think particularly older people, 

people in their 50s, sometimes it’s harder to find a job but they 

have a lot of experience, they get downsized, is an effort being 

made to hire those people above somebody who just came out of college and may have no point of reference as to how the real world 

works? 

Ms. SIMON. I don’t have any data that would indicate one way 

or another how—the percentage of the current Federal workforce 

that has spent time working in the private sector or for employees 

in a regulatory agency that have worked in the same industry that 

their agency regulates. 

I would tell you that it is always expected that Federal employees act in a courteous manner with any member of the public that 

they are dealing with. Obviously, in—when you’re in a law-enforcement context and the law enforcement may be—the laws that people in the Environmental Protection Agency are paid to enforce, 

businesses might not like the, you know, restrictions on their ability to use —— 

Mr. GROTHMAN. Yes. 

Ms. SIMON.—certain chemicals or —— 

Mr. GROTHMAN. Yes, I don’t mean to cut you off, but they limit 

us on time —— 

Ms. SIMON.—equipment —— 

Mr. GROTHMAN.—so may I just make one comment for my good 

buddies in the think tank world? You know, I think in the future 

when they hire people, I am sure they have a scale and there 

might be a test that people take and blah, blah, blah. I would hope 

time spent in the private sector is a big part of that scale, and that 

is something you guys could work towards because I think you 

would get a lot better quality out of the regulatory agencies if you 

had people that dealt on the other side of things. 

Can I ask one more question —— 

Mr. MEADOWS. I beg your pardon? 

Mr. GROTHMAN.—since I’m the only guy—the only Republican 

down here? 

Mr. MEADOWS. Okay. The gentleman is recognized for 30 more 

seconds, and we will do the same for the other side. 

Mr. GROTHMAN. Super. We have numbers here that were given 

us. I mean, I just find them hard to believe. We have 108,000 Federal employees making more than $150 grand a year, and where 

I come from, that is like, you know, the upper crust. And it just 

keeps skyrocketing up more and more and more. And I don’t begrudge anybody making $150 grand a year, but holy cow. I mean, 

wow. 

Ms. SIMON. The vast majority of Federal employees who make 

salaries like that are physicians and scientists. 

Mr. GOLDENKOFF. And you have to understand, too, that the jobs 

that the Federal Government avails himself—for example, they’re 


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doctors, they’re engineers. They are higher skilled because the nature of the work is higher skilled than in the private sector, and 

so that needs to be considered, too. You cannot just look at the salaries alone. 

Mr. GROTHMAN. Well, I wonder if we can get for us—I mean, we have got $400,000, $150 and other—over $150, that’s $500. I mean, 

that is just—I wouldn’t know if I would have guessed that many 

people made that much in the country as a whole, but maybe I 

come from an area that doesn’t make as much money. If we could 

someday get a breakdown by agency and find out, you know, from 

somebody —— 

Mr. MEADOWS. Yes, the gentleman time is expired. If you will try 

to respond to the gentleman’s request to the committee, that would 

be greatly appreciated. 

The gentleman from Maryland, Mr. Raskin, is recognized for a 

very generous five minutes. 

Mr. RASKIN. Mr. Chairman, thank you very much for your flexibility. And I do want to associate myself briefly with the remarks 

of the gentleman from Massachusetts, Mr. Lynch, who did observe 

that a time when we just experienced the firing of the FBI Director 

by the President for apparently refusing to quash the investigation 

of a paid Russian asset Michael Flynn, the timing of this hearing 

is at least a bit unusual. But as the Representative of the Eighth 

Congressional District in Maryland where I have 88,000 Federal 

employees, this is an issue of great interest and concern to me. 

Now, I take the general point to be that high-ranking public employees like doctors at NIH or the Center for Disease Control or 

lawyers at the Department of Justice or maybe on Capitol Hill or 

engineers or IT people in the Pentagon are underpaid compared to 

what they could be making in the private sector. And certainly we 

know that anecdotally to be true. You talk to people all the time 

in government who are either leaving to go make double or triple 

their salaries in the private sector that they could be making or are 

tempted to do it and complain about the pay and benefits being too 

low. 

And then the suggestion that there are, quote, ‘‘lower-ranking 

employees’’ who are overpaid compared to their private sector counterparts, and I want to focus on that for a second to figure out who 

we are really talking about because I don’t know to what extent 

you can really equate particular public sector positions with private 

sector positions. I think of some people who are lower paid, for example, as soldiers, but, you know, you think back to the Iraq War, 

there were soldiers leaving the Army when they could and then 

making double or triple what they could as military contractors in 

Iraq or in Afghanistan. 

Maybe climate scientists, researchers could be making a lot more 

working in the private sector or maybe they are making more 

than—but I can’t visualize who we are talking about as being overpaid within the government workforce, and I am just wondering if 

anybody can help me out on that. 

Ms. SIMON. I’d like to take a stab at that. I think your comments 

point to why the CBO study is particularly inappropriate as the 

basis for a conversation about whether Federal employees are overpaid or underpaid. In my testimony I talked about Border Patrol 


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agents who have a very complex, difficult, and dangerous job. Their 

job requires only a high school diploma. They receive additional 

training from the Federal Government before they start their jobs, 

but their formal education, their educational attainment is —— 

Mr. RASKIN. Got you. So basically, when they say —— 

Ms. SIMON. All they need is a high school diploma. 

Mr. RASKIN.—they are overpaid, we are equating a Border Patrol 

agent who just has a high school degree to that person taking their 

high school degree and getting a job at the McDonald’s across the 

street —— 

Ms. SIMON. Well, we’re —— 

Mr. RASKIN.—from the border or something like that. 

Ms. SIMON. In the CBO study, we’re comparing it with all private 

sector workers with a—high school education is their highest educational attainment who might work in security services, broadly 

defined, which could include all kinds of security guards, mall cops, 

you know —— 

Mr. RASKIN. Okay. 

Ms. SIMON.—anything in that —— 

Mr. RASKIN. Let me ask this. So if that public-private juxtaposition isn’t exactly useful to us in terms of thinking about the pay, 

what about—does anybody have any information on either an 

international perspective on what workers make in national governments abroad or historically? And the historical context I think 

is important because I do know that the Federal Government historically has been a place that has been open to people facing serious discrimination in the private sector like women, like African 

Americans who were able to get jobs their first when they were experiencing rampant discrimination. And so the fact that, you know, 

a woman or an African American could get hired in the 1920s or 

’30s at the Post Office or at the Department of Labor but not get 

hired in the private sector without facing extreme discrimination, 

that doesn’t surprise me that they might be making a little bit 

more, and that might be something we would celebrate. 

But I wonder if anybody has got either any historical perspective 

or international perspective on it. Mr. Biggs? 

Mr. BIGGS. From the international context, the OECD, which is 

a group of developed countries, has done surveys of government 

pay for different positions in those developed countries, so the, you 

know, U.S., UK, Canada, France, whatever. And for a variety of positions they look at the U.S. Federal Government pays more. Just 

as an example, economists are paid an average of about $150,000 

a year in the U.S. Federal Government, about $87,000 per year in 

other OECD countries. Somebody who’s a secretary in the U.S. 

earns an average about $69,000 in the Federal Government, about 

$47–48,000 in other OECD countries. So this is not—this is government-to-government among other developed countries. 

Mr. RASKIN. Okay. I would love to get that information from you. 

You are telling me that a secretary in the Federal Government 

makes an average $69,000 a year? 

Mr. BIGGS. For secretaries, it’s listed as an average of $69,476. For executive secretaries, it’s listed as $98,786. 

Mr. RASKIN. Okay. Did anybody have any historical data to see— 

because of course one of the things we have seen is a decline in 


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unionization for people who would be in high school graduate jobs 

in a lot of places in the private sector, but an improvement in 

unionization in the public sector. So that might account for some 

of the disparity. And I wonder to what extent unionization does 

help explain it. And, Ms. Simon —— 

Ms. SIMON. One of the places you see the impact of the decline 

in unionization is in the data that are used for the Federal Government’s pay system for its hourly workforce, people who work in the 

skilled trades. They’re mostly employed by the Department of Defense in depos and arsenals, and they—on paper anyway we have 

a prevailing rate system that collects data from all over the country, private sector data on what people are paying—what private 

employers are paying for similar jobs. And you can see month to 

month when an auto plant closes in a community, wages in that 

community go down by 35, 40 percent because the wages paid in 

a union manufacturing plant are so much higher than the nonunion —— 

Mr. RASKIN. So on that theory we would not want to allow —— 

Ms. SIMON.—wages. 

Mr. RASKIN.—extreme inequality in the private sector to become 

the justification for driving wages down further in the public sector, which I take it is —— 

Ms. SIMON. No, but I would say that that is a nice way to describe the subject of this hearing. 

Mr. RASKIN. Yes. All right. I think my time is up, Mr. Chairman. 

Thank you for your indulgence. 

Mr. MEADOWS. I thank the gentleman. And in light of the number to my right of potential questioners, instead of recognizing myself, I am going to go to Ms. Kelly and recognize her for a strict 

five minutes. I am just kidding. 

Ms. KELLY. That is all I will need. Thank you, Mr. Chair, and 

thank you to the witnesses. 

When I saw what this topic was, I was really surprised because 

I have worked on every level of government and outside of government, and when I became a Member of Congress, so many of the 

people that came to work for me had to take pay cuts. And also 

their health care wasn’t as good as what they had otherwise, so I 

find that very interesting. 

The other thing is—and you don’t have to answer the question— 

but it always seems like people think that if you do government 

work or you are a public servant or social service that you should 

make less even though you go to college, you may have your 

undergrad degree, your master’s degree, in some cases your Ph.D., 

but people think that you should not make more because you are 

just a government worker or in social service. 

Also the other thing is—and I know we talked about Washington 

versus outside, but how many of our staffers have two, three, four, 

five, six, seven, eight, nine, yes, nine roommates so they can live 

off the salaries that we pay them. And they don’t work just straight 

nine-to-five jobs. So to the very staffers in this room, it is shameful 

that some people make $25,000 and $30,000 despite whatever, you 

know, the school loans you are saying that they get paid back, but 

it is still horrific in my opinion. 


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Ms. Simon, your testimony states that the Federal pay system 

promotes internal pay equity and prevents discrimination. You 

state in your testimony that this is because a system, and I quote, 

‘‘assigns salaries to the position, not the individual.’’ Can you explain how you believe the Federal pay system advances gender and 

race equity? 

Ms. SIMON. Yes. I also in the testimony cite a 2014 study by the 

Office of Personnel Management that really does focus exclusively 

on the question you asked, pay equity in the Federal Government. 

The best number in that study is that well over 90 percent of—or 

women who are part of the Senior Executive Service on average 

make almost exactly the same salaries as men in similar jobs, but 

that’s true throughout the Federal Government. 

And Representative Raskin was asking about—or asking about 

historically the Federal Government was the place that was open 

to hiring women and members of racial minority groups when the 

private sector refused. Not only did it hire people based solely on 

skills, but it pays based solely on the job. So if the holder of the 

job is female or male, black or white, old or young, it doesn’t matter. It matters only what the job is. And that’s the way that the 

Federal Salary Council compares private and Federal pay and 

measures its pay gap, and that’s the proper way to take a look at 

comparisons between Federal and private pay because the attributes of the individual, which is what the CBO study focused on, 

should always be irrelevant. 

Ms. KELLY. Thank you. You also wrote, ‘‘One appalling result of 

Heritage’s approach is the interpretation of the fact that the Federal Government is less likely to discriminate against women and 

minorities in terms of pay than the private sector. It is viewed as 

evidence that the government overpays relative to the private sector rather than the other way around.’’ Are you saying that the 

Heritage study found a compensation premium for Federal workers 

because the private sector is more likely to discriminate against 

workers than the Federal Government? 

Ms. SIMON. If you look at data on, say, African American women 

with bachelor’s degrees in the private sector and what they make 

on average, an African American woman who hold jobs in the Federal sector that require bachelor’s degrees, on average, the Federal 

Government pays more because it doesn’t reproduce the discriminatory pay practices that we find in the nonunion private sector. 

Ms. KELLY. And actually, there was a study done in Chicago that 

reports for African American women in the private sector that the 

more education you have, the bigger the pay gap grows so —— 

Ms. SIMON. In the private sector. 

Ms. KELLY. Right, in the private sector. Right. Can you just talk 

about—I want you to describe the most harmful proposals and explain how they would affect Federal workers when you look at 

what may be in President Trump’s budget. 

Ms. SIMON. Well, we have not been privy to what’s in President’s—President Trump’s budget except for one phone call I got 

earlier this week that described the many, many proposed cuts we 

can expect to see to Federal retirement. They want to change the 

basis in which annuities would be calculated. They want to eliminate COLAs altogether for people on FERS and just a quarter of 


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a percent for people in CSRS. They want to eliminate the FERS 

supplement that would affect law enforcement agents who are— 

have mandatory early retirement. And—but the biggest and worst 

and most consequential would be to charge Federal employees who 

participate in FERS anywhere from 7 to 9 percent of their salaries 

for their defined benefit. This is a massive pay cut. 

It’s important to note, although we’ve been discussing here today 

that too few private sector employees have access to a defined benefit pension anymore, for those who do in the private sector, about 

97 percent of private sector employees with a defined benefit plan 

don’t pay anything toward their pension. The employer pays the 

entire cost. Federal employees already pay far, far more for their 

pension benefit than comparable private sector employees. 

Ms. KELLY. Okay. Thank you. And I know I went over, but I did 

want to make a comment that as the ranking member of the IT 

Subcommittee, and you have been very involved with us, that we 

can’t keep Federal employees in that division and with 

cybersecurity because we don’t pay enough. So thank you for your 

indulgence. 

Mr. MEADOWS. I thank the gentlewoman. 

The chair recognizes the gentlewoman from Michigan, Mrs. Lawrence, for five minutes. 

Mrs. LAWRENCE. Thank you so much. 

This discussion to me is very troubling on a lot of levels. The arrogance of individuals to target Federal employees where the criticism of Federal employees is, one, that you are a public servant, 

I am paying your salary; therefore, you should make less, but you 

have to uphold to so many restrictions when you take that oath of 

office. And Federal employees are required to take an oath of office 

for ethics, for the Hatch Act, for so many things that are different 

from the private sector that you don’t even have an expectation or 

requirement. 

There are some plusses that I wanted to go through. When we 

talk about career employees and why they stay there, most people 

go into the Federal Government, unlike the millennials of today, 

thinking that it is a career because there is upward mobility built 

into Federal employment, so therefore, you can actually grow and 

get promotions based on education and experience within the agency and it is rewarded. 

The highest enforcement of civil rights, employment rights are in 

the Federal Government. Ladies and gentlemen, the diversity that 

has historically been demonstrated in Federal Government—and I 

will say from those who despise the fact that minorities are advancing in salary and the Federal Government is the catalyst to 

that is some of this displaced minimalism that we see happening 

with Federal employees. I remember hearing my older relatives 

saying that when you got a job at the post office, you were considered elite in the community because it was a paid job that you 

were going to be paid the same amount of money as your white 

counterparts, that you would be able to have a career, your job was 

protected, and guess what, they would enforce civil rights laws. So 

I am a little sensitive when I hear this blanket conversation about 

Federal employees. 


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The fact that—why would we not have an appeal system in the 

Federal Government for employees? You expect that if you are arrested or if you are accused of something, that you would have appeal rights. And instead of saying this is a model that private industry should use, we want to dummy down the Federal Government who are the keeper of our Constitution and our laws and we 

want to say pay them less, make them be the lowest-paid employee. 

And for the life of me I am going to try to find a secretary in the Federal Government that is making $67,000 or $90,000 that 

you have. As an employee who has been employed for 30 years, 

moved up in the ranks, but I am sorry, the starting pay—and I 

want to give you an example. The starting pay of a registered 

nurse—and this is according to VA. A practical nurse or a medical 

technician in VA makes about $45,000 a year. Nursing assistants 

make $35,000 a year. 

Now, many of you know I worked for one of the Federal agencies 

and I was in H.R., and the biggest problems we had were hiring 

professionals. We needed doctors, and we could not get an active 

doctor in the system. It was always a retired doctor that would 

come in because the pay was so low. It was not one that was reflective of the industry but a retired doctor could come and make this 

lower pay. And we struggled with that. 

We struggle with engineers, we struggle with those, and it is nowhere that you can say that a skilled professional makes more 

money in the Federal Government. They may have career status 

protection and they may have opportunities within this agency. 

The last thing I want to say, and then I am going to get a question in, is this issue about official time. It comes up consistently. 

And we are dealing with this right now in the military where we 

have women who are being subjected to sexual harassment in the 

military. So you are telling me in order for a person who is being 

discriminated against—and I was an EEO investigator—you are 

being discriminated against, you are being harassed in the workplace, guess what, take your own personal time, take time off the 

clock because you are being abused in the workforce to address 

your complaint. 

When we say official time, you cannot go in there and have a cup 

of coffee and sit there for the whole day. You have to have a complaint. And to protect the rights of individuals in the workforce 

with official time so that if I feel aggrieved, I have a process to go 

through. It is something that is—we keep talking about this as we 

are trying to find a problem. 

One thing that you all are saying and I hope we all agree on this, 

I want every Federal employee to earn their salary. I want efficiencies. I cannot stand fraud. I take the work of a Federal employee—I do place them at a higher level. And I do want to compensate them with a wage that is reflective of their skills, but I 

don’t want, I don’t want our employees to be able to disregard the 

responsibilities that they take an oath to do. 

Thank you. 

Mr. MEADOWS. I thank the gentlewoman. 

The chair recognizes the gentlewoman from Florida, Mrs. 

Demings, for five minutes. 


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Mrs. DEMINGS. Thank you so much, Mr. Chairman. 

You know, a few minutes ago I heard a comment that too many 

Federal employees, particularly those coming in, don’t have a point 

of reference of how the real world works. well, I would venture to 

say many times Congress acts as if it does not have a point of reference of how the real world works. 

As we all know, there have been growing inequality in wages 

with the highest earners keeping more of the total wages that are 

paid in this nation. This is likely why the CBO has found a disparity in wages between the public and private sectors, particularly 

for the least educated workers. 

Mr. Kile, workers in the Federal Government, including by our 

calculations, about 31,700 people in Texas and more than 36,000 

people in California with no more than a high school education 

were paid just about 34 percent more than similarly educated 

workers in the private sector. Is that correct? 

Mr. KILE. We did not look at the breakdowns by State, but we 

do find on average the differences in compensation by education 

that we have been talking about today. 

Mrs. DEMINGS. So is the percentage based on—the percentage, 

would you say generally that percentage is correct? 

Mr. KILE. I’m—so the percentage difference in total comp for people with a high school diploma or less was 53, and that’s a national 

average. 

Mrs. DEMINGS. The Bureau of Labor Statistics and other experts 

have observed that in some cases benefits inequality between the 

highest and lowest earners has been even starker than wage inequality. According to the Bureau of Labor Statistics, only 33 percent of private sector workers whose earnings put them in the lowest 25 percent of wage earners had access to employer-provided 

health care. However, Ms. Simon, every full-time Federal employee 

has access to the Federal Employee Health Benefits Plan, even the 

lowest-paid, least-educated employee in the Federal Government. Is 

that correct? 

Ms. SIMON. That’s correct, but it also—I just want to add to what 

was just said. It’s not—the problem with the CBO study is not that 

the employer provides the benefit; it’s the differences in the cost of 

the benefit provided. It costs the Federal Government more to provide the benefit, the same retirement benefit, than it costs a private employer. And that is a necessary piece of information that— 

to be included in any financial comparison of the cost of benefits. 

It’s not the benefits but the cost of benefits, the employer —— 

Mrs. DEMINGS. So the retirement —— 

Ms. SIMON.—cost of providing the benefit —— 

Mrs. DEMINGS.—health insurance, paid leave —— 

Ms. SIMON. The Federal Employee Health Benefits Program also 

costs the government more than it should, given the benefits it provides. There are structural flaws in FEHBP that make it more expensive than it should be. The actuarial cost of the benefit versus 

what the premiums are, there is—there’s a big—there are flaws in 

the structure of FEHBP that make it much more expensive than 

it should be. And I wouldn’t call the restriction on the investment 

of the assets in the Civil Service Retirement Trust Fund a flaw, but 


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it makes it more expensive than a similar private pension plan 

that would provide the exact same benefit. 

Mrs. DEMINGS. CBO found that benefits for Federal employees 

with no more than a high school education costs about 93 percent 

more than benefits for private sector employees with no more than 

a high school education. In other words, the difference between 

public and private sector benefits for employees with only a high 

school education were larger, as you have just said, Mr. Kile, than 

the difference in the wages paid by the public and private sector 

to these employees. Is that correct, Mr. Kile? 

Mr. KILE. Yes, that’s correct. 

Mrs. DEMINGS. If Republicans cut benefits for Federal workers 

with no more than a high school education so that they are comparable to benefits paid by the private sector with comparable levels of education, according to your findings, the Federal workers 

would get to keep about 7 percent of their benefits. 

Mr. Kile, has the CBO examined what medical benefits, retirement benefits, and leave Federal workers with no more than a high 

school education would actually have if they receive only 7 percent 

of the benefits that they currently receive? Have you examined 

that? 

Mr. KILE. No, that’s something we have not examined. 

Mrs. DEMINGS. Ms. Simon, would you like to comment on whether the benefits earned by Federal workers with no more than a 

high school education are 93 percent too generous? 

Ms. SIMON. The benefits are not too generous —— 

Mr. MEADOWS. Ms. Simon —— 

Ms. SIMON.—they’re too expensive. 

Mr. MEADOWS.—her—Ms. Simon, her time has expired but 

please answer the question. 

Mrs. DEMINGS. Thank you so much, Mr. Chairman. Don’t treat 

me differently. 

Mr. MEADOWS. No, I would never treat you differently. Go ahead. 

Mrs. DEMINGS. Ms. Simon? 

Mr. MEADOWS. No, please answer. 

Ms. SIMON. I said I—the benefits are hardly too generous. They 

are—I think the health insurance benefits are too expensive. I 

think that we would benefit from self-insured program in FEHBP. 

As far as the cost to the employer and cost to the government 

of providing the retirement benefit, it’s—there’s very, very good 

reason for that, as I described in my testimony, because of the rate 

of return on treasury bonds compared to private equities. And so 

the provision of benefits can’t—has to take into consideration the 

cost of providing the benefits, not the benefits themselves. 

Mrs. DEMINGS. Thank you so much, and thank you so much, Mr. 

Chairman. I yield back. 

Mr. MEADOWS. I thank the gentlewoman. 

Ms. Simon, let me make sure I can clarify one thing in following 

up on her testimony there—or your testimony, her questions. Are 

you saying that the benefits that Federal workers get are not better; they are just more poorly administered on behalf of the Federal 

Government? Because you said the Federal Government was not efficient I guess in doing that? I am trying to understand where she 

was going with and you said it is not better benefits; it is just they 


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are not—it is more costly to administer it in the Federal Government? 

Ms. SIMON. Yes. I didn’t say because—and it’s structural issues. 

The FEHBP has problems with risk segmentation. It doesn’t have 

one benefits package. It squanders the purchasing power of what 

is the largest employer-provided plan —— 

Mr. MEADOWS. So you are saying the Federal Government is not 

administering their retirement program as well as the private sector? 

Ms. SIMON. No, I was just talking about the Federal Employee 

Health —— 

Mr. MEADOWS. Well, that is what it sounded like. 

Ms. SIMON. I was talking about the Federal Employee Health 

Benefits Program. 

Mr. MEADOWS. So they are not —— 

Ms. SIMON. I think there are structural —— 

Mr. MEADOWS.—implementing it —— 

Ms. SIMON.—flaws in that plan. I’m not saying that OPM —— 

Mr. MEADOWS. So this gets back to the —— 

Ms. SIMON.—implements it poorly. 

Mr. MEADOWS.—previous question. You think they ought to go 

all on Obamacare? 

Ms. SIMON. No, sir. 

Mr. MEADOWS. Okay. Well, we will follow up on that. 

Mr. Sarbanes, you are recognized for five minutes. 

Mr. MEADOWS. Oh, I am sorry. 

Mr. DESAULNIER. It is close enough, Mr. Chairman. We are both 

physically close to one another here. And I do want to say the 

chairman and I share something in common. It is my understanding you started off in the restaurant business, Aunt D’s? 

Mr. MEADOWS. Boy, you know, you Googled me pretty well there, 

yes. 

Mr. DESAULNIER. Well, we have something in common. I always 

admire somebody who has owned restaurants, having managed and 

owned them for 35 years. My mistake was, as opposed to you, I 

stayed in it. I wished I had gone into real estate because there is 

more money in real estate than there is in the restaurant business. 

But I really think this is too bad. I think it is a reasonable question to ask from my perspective, having been in the private sector 

in a very competitive field where I needed to compensate and treat 

my employees well, owning restaurants in the San Francisco Bay 

area, which was very competitive, low profit margin. If I didn’t 

treat my employees well, I was out of business in no time. And I 

saw lots of people who invested in lots of businesses who were out 

of time, particularly the retail business. 

So I think the question should be how do we as Americans clearly in this day and age get wages and benefits up for all working 

Americans? I perceived the last election as being argument about 

that, that both parties had left that behind. 

Today, according to Forbes magazine, the 20 wealthiest Americans possessed as much wealth as 152 million Americans. We have 

never had that concentration of wealth in this country. There is 

plenty of good arguments as to why we need to fix that. And I have 

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file people for operational problems is going to solve your management problems. My experience in the public sector, having served 

at every level of government, usually our problems were cultural 

or management level. And I have heard that in this committee over 

and over again. 

So forgive me for indulging in that little editorial comment, but 

I really do think it would serve this committee—and I know a lot 

of us on this side of the aisle would like to talk about how we get 

greater efficiencies in government. For those of us who believe in 

government, we want excellence in government. So the Heritage 

Foundation, I heard you earlier talk about the good employee who 

feels trapped. I think that happens in public and private organizations, and I am sure you understand that as well. 

So how do we change that? And I really think this committee 

would be better served trying to figure out what is it we could do 

based on peer-reviewed, analytical analysis to improve customer 

service. I think it is really difficult when Members complain about 

the IRS customer service at the same time when you cut your revenues by almost a third. And I am sure the GAO has done studies 

on what the appropriate level in each workforce in terms of what 

wages and compensation should be and what the revenues should 

be and what that would equate to in terms of customer service. 

And maybe the GAO can respond to that. 

But first, I would like Ms. Simon to respond to that from your 

experience. How do you get Federal employees from your experience to get compensated well in a competitive market? In the bay 

area, it is hard to keep Federal employees. I know my district office, I am losing a great person who worked for Google and is going 

to go back to work for them because he can get paid three times 

the amount of money in an area of the country that if you make 

$105,000, you are considered poor vis-?-vis the housing market. 

So maybe you could respond to that. What is the right compensation in your view, understanding that you argue as appropriately 

for your members? 

Ms. SIMON. Well, I’m also a member of the Federal Salary Council, and we are given the opportunity to look at large quantities of 

data that show disparities between Federal pay and non-Federal 

pay on a locality-by-locality basis. And we see these disparities. We 

see it by occupation; we see it by location. 

My colleagues here today are talking about low quit rates. One 

of the things that we’re—I’ve seen in my long career representing 

Federal employees is that salaries—you know, people who go into 

Federal service expect to have fair compensation but they don’t do 

it to get rich. It’s because they are very, very committed to the mission of their agencies. You’ve got people working in health care in 

the Department of Veterans Affairs, over a third of whom are veterans themselves, and they have devoted their careers to that kind 

of work. You’ve got people working in EPA who care deeply about 

the future of this planet and care about public health and clean air 

and clean water. And they have committed their lives to working 

in those kinds of agencies. Border Patrol agents who put their lives 

on the line, Federal corrections officers who put their lives on the 

line every day, but they’re very committed to public safety, they 

also have to raise their families. 


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And we in the last 10 years or so but really the last nine years 

have suffered horrendous cuts in compensation, big retirement 

cuts, three years of pay freeze followed by minuscule pay adjustments, and no other group of Americans has had to bear such a 

huge burden for the politics of budget austerity. About $189 billion 

and counting have come out of the pockets of Federal employees 

partly because they’re demonized routinely, partly because of these 

ridiculous studies that turn into misleading headlines about Federal employees being overpaid. We had reference earlier today to 

Federal employees who make over $100,000 as if that were some 

kind of scandal when most of those professionals who are earning 

that kind of salary, as you point out, could make much, much more 

in the private sector. 

So it’s really a matter of funding and changing the conversation 

in this country away from the idea that only the very, very wealthy 

deserve to live a decent life. 

Mr. DESAULNIER. Thank you. 

Thank you, Mr. Chairman. 

Mr. MEADOWS. I thank you. 

The chair recognizes the gentleman from Pennsylvania, Mr. 

Cartwright, for five minutes. 

Mr. CARTWRIGHT. Thank you, Mr. Chairman. 

Mr. Kile, thank you for being here. I want to drill down on some 

of the figures noted in the CBO report comparing the pay of Federal and private sector workers if I may. Your report finds that 

Federal workers with a bachelor’s degree or less receive more total 

compensation than their private sector counterparts ranging from 

21 percent more for employees with a bachelor’s degree to as high 

as 53 percent more for employees with no more than a high school 

diploma. Am I correct in that? 

Mr. KILE. Yes, that’s correct. 

Mr. CARTWRIGHT. So according to data from OPM, more than a 

million Federal employees have no more than a bachelor’s degree. 

That is about half of all executive branch employees. And I know 

that CBO analyzed data from the current population survey. However, assuming CBO’s study is correct, we would have to conclude 

that the compensation of more than one million Federal employees 

is higher than compensation provided to their private sector counterparts with similar education levels. If our Republican colleagues 

insist that Federal compensation be realigned with private sector 

compensation, that would mean that the compensation of more 

than one million Federal employees would need to be cut. Many 

employees would see their total compensation cut in half. 

But OPM data show also that veterans comprise about 30 percent of the Federal workforce. So if you take those numbers together, it appears that of the one million Federal employees who 

make more than their private sector counterparts, as many as 

300,000 of them may be veterans of the United States military. 

Ms. Simon, nice to see you again. What do you think? Do you 

think veterans in the Federal Government are overpaid? 

Ms. SIMON. I think for the most part veterans who serve in the 

Federal Government are underpaid. And I think that it’s—some of 

the discussion that has occurred in this hearing earlier talking 

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verse actions will fall most heavily on veterans and veterans with 

service-connected illnesses and disabilities because that really has 

been the focus of attempts to punish Federal employees. They want 

to punish by taking away their ability to defend themselves when 

they’re—when—against allegations that they haven’t performed 

well enough at their job in spite of their disabilities, and now they 

want to take away some of their pay. 

Mr. CARTWRIGHT. Well, I want to stay on the veterans theme. 

Unlike the vast majority of the private sector, the Federal Government has made it a priority to hire veterans by giving them a statutory preference in hiring. As a result, nearly one-third of new 

hires in the Federal Government are United States military veterans. Let’s take a look at the VA, for example. About one-third of 

its employees are veterans. Psychiatric practical nurses and medical technicians in the VA make about $45 grand a year, and nursing assistants make about $35,000 a year. 

Ms. Simon, do you believe that these individuals are overpaid by 

52 percent or even 21 percent? 

Ms. SIMON. They’re definitely not overpaid. They’re underpaid. 

And as we talked about before, what seems to raise the ire of some 

people who look at these data is that in the nonunion sector people 

who are performing similar jobs or have similar educational attainment receive no health insurance benefits from their employer, receive no retirement benefits from their employer, and they think 

the Federal Government ought to follow that race to the bottom. 

And of course that is not something that AFGE supports. 

Mr. CARTWRIGHT. Well, now some Members of Congress intend 

to use CBO’s report to justify slashing Federal employee pay and 

benefits, but I just want to caution that we proceed cautiously in 

this area because we are all good little capitalists here, and we 

know that in a free market economy and also wherever you hire 

people, you get what you pay for. 

And if you continue to do, as you mentioned, Ms. Simon, beating 

up on Federal employees, beat up on your employees, beat them 

up, beat them up, cut their pay, make them feel bad about themselves, the best ones are going to wander off, and you are going to 

be left with what is left. And do we really want to do that when 

we run the Federal Government? 

Mr. Chairman, I thank you for your indulgence —— 

Mr. MEADOWS. I thank the gentleman. 

Mr. CARTWRIGHT.—and I yield back. 

Mr. MEADOWS. The gentleman’s closing sentence would indicate 

that you don’t always get what you pay for. 

I will recognize Mr. Cummings, the ranking member, for a line 

of questioning. 

Mr. CUMMINGS. Let me—first of all, to all the Federal employees 

who may be watching today, I want to take a moment to thank you 

for what you do. I want to thank you for giving your blood, your 

sweat, and your tears to all of us to make our lives better. I have 

talked to many of you many times and asked why, why is it that 

you got into Federal employment. And over and over and over 

again I hear words like I wanted to do something that would last 

forever. At the end of my day they would say—many of you said 

it is not the pay I get; it is the deeds I do for other people. 


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And, you know, every time I hear those words—and then we 

have people that have come to us many times and I will say, you 

know, where are you working? Well, I am working at this law firm. 

They tell me how much they are making, and I will say, well, this 

job doesn’t even pay near that. And this happens to me almost 

every other month. What are you doing here? You are not going to 

make that kind of money. And you know what they say? They say, 

you know what, I have been doing this other job for 15 years, 20 

years. I will take a pay cut. I will take a pay cut because I want 

at the end of my day and at the end of my life to be able to say 

I gave. 

And so I take my moment to thank all of you who may be watching here today. 

The other thing that I would say to our Federal employees is 

something that somebody said to me a long time ago. I know many 

times you get your paychecks and then you listen to this hearing 

and you listen to the people who have spoken here today, and you 

get your paychecks and you go to the supermarket, and you are the 

ones who have to get the subtotal. You are the ones who are sitting 

there with your calculator. You are the ones that leave those groceries behind because you don’t have enough money. 

You are the ones who get up at 4:00 and 5:00 in the morning, 

dress the baby, and then try to race to work. And then you are worried all day. And then you hear people talking about it is a big 

bonus because you got some babysitting services. Please. 

You are the ones that worry. You are the ones at NIH that when 

we had the government shutdown, you are the ones who were worried. The nurses I talked to at NIH, she said I am so upset when 

we had the government shutdown. And I said why are you so 

upset? She said, because when they did the shutdown, what that 

does is it stops us from being able to continue some experiments 

or some research that could have saved lives. It is not about the 

money. It is bigger than that. 

And so I can spend all my time asking a lot of questions, but I 

am not going to do that. I want to just thank you because you don’t 

get thanked enough. You don’t get thanked enough. Over and over 

again you hear criticism, over and over again you hear people talk 

about what you are not doing, and I thank you for what you are 

doing. 

Now, before Mr. Meadows—he may think I am talking about him 

because I am not—Meadows is a good guy. I mean, really. I really 

believe that he wants balance, and I understand that. He and I 

have talked many times about whatever we are doing being effective and efficient, period. And in order to be effective and efficient, 

you have got to have good people. I was telling him a few minutes 

ago it is very rare that I fire anybody because I try to hire the right 

people. 

And so, you know, I just wanted to take that moment because, 

you know, this program that they do every year—I forget the name 

of it—where they honor Federal employees, and every time I go to 

that program, I have got to tell you, it gets very emotional because 

usually it is somebody who is unseen, unnoticed, unappreciated, 

and unapplauded. And somebody took time to recognize what they 

did or do. 


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And, you know, I just want Federal employees to know that I 

think it was Mrs. Lawrence that said all of us want the best. All 

of us want employees that go the extra mile. All of us want to be— 

by the way, we are Federal employees. We need to go the extra 

mile, too. And I think when you look at Members of Congress and 

the time that we put in, I don’t know a Member of Congress that 

has a nine-to-five job. I don’t know any of them. If they do, they 

are not in office, that is for sure. Or even a—it is usually seven 

days a week. And so we are all here to serve. 

But you know what, your name may never appear on the front 

page of the Washington Post. Federal employees, your name may 

never appear in WTOP or even your local gazette. But I want to 

thank you on behalf of a Congress, a grateful Congress for what 

you do every day to make our lives better. Thank you for teaching 

us, by the way, the power of sacrifice. Thank you for giving us examples of people who are not selfish but are about the business of 

making people’s lives better. 

And with that, I will yield back, Mr. Chairman. 

Mr. MEADOWS. I thank the gentleman for his kind comments and 

for his diligence in trying to make sure that our Federal workforce 

is indeed efficient and effective, to use your words. 

The chair recognizes himself for five minutes for a series—all 

right. 

Mr. Sarbanes, we are going to go ahead and let you pop in for 

a very strict five minutes if you would. 

Mr. CUMMINGS. Sarbanes from Maryland. 

Mr. MEADOWS. From Maryland. 

Mr. SARBANES. Thank you, Mr. Chairman. I appreciate it. 

Before I move to my comments, I just wanted to ask unanimous 

consent to enter a document into the record. This is a report from 

the Center on Budget and Policy Priorities on wage stagnation 

faced by middle- and lower-wage workers in recent decades. 

Mr. MEADOWS. Without objection. 

Mr. SARBANES. Thank you. I thank the panel for your testimony 

today. I want to associate myself with the comments of Ranking 

Member Cummings, and I also want to salute the chairman because I know that he has brought close attention to the situation 

faced by our Federal employees. We are all trying to get to the 

right place in terms of providing the support and resources that are 

needed. This comparison I think we do on an annual basis between 

the kind of private sector workforce and the compensation and benefits and so forth that are available in the private sector and how 

that compares to what is offered to the Federal workforce. 

It seems the frame is always reversed from the position that I 

think makes most sense. We look at the comparison. We get this 

testimony, which obviously is subject to debate about the fact that 

the Federal employees have access to a broader set of benefits and 

compensation and overall have higher compensation in certain categories than what is in the private sector. And oftentimes, the conclusion that people want to draw from that is that we should take 

something away from the Federal employees, that we should in a 

sense degrade the package of benefits and compensation that is 

available to them. 


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But I think that in fact what we offer our Federal employees is 

a model and a standard that we ought to be thinking about how 

we can get the private sector to raise its standards up to that level. 

I think, Ms. Greszler, you talked about the fact that Federal employees have access to some daycare benefits and some assistance 

with student loan repayment. Well, okay. If I am somebody working in the private sector and I am listening to this hearing and I 

am hearing that there is some benefits available to the Federal 

workforce that help with daycare, the answer to the fact that there 

is a discrepancy there between the Federal workforce and the private sector shouldn’t be to invite the private sector person to say, 

well, the way to solve the discrepancy is to take it away from the 

Federal employee. The way to address the discrepancy is for that 

private sector person to say, well, I would like to have that benefit, 

too. That is a valuable benefit. How can I add that to the compensation package? And we ought to be trying to promote with private sector employers that that is a legitimate benefit that ought 

to be offered to people. 

When you look at the pensions, and Representative Lynch talked 

about this at the outset, we ought to be trying to find ways to 

strengthen and lift up and really in some ways completely overhaul 

the private pension system in this country so it reflects more of the 

characteristics of what we have been able to achieve with respect 

to the Federal workforce. We need to bring up the standards that 

are out there in the private sector, not knock down the standards 

of what is a model in terms of the Federal workforce. 

A decent wage not subject to bias, as you pointed out, Ms. Simon, 

is something we ought to be reaching for in the private sector. That 

is why many of us argue for a national minimum wage. Let’s bring 

up what is happening out there for all of the workers in America, 

not degrade what is available to the Federal workforce. 

And then the last comment I just wanted to make is there is this 

suggestion that is made that because the phones aren’t being answered in a timely way in this agency or there is a casework 

backup in some other agency, that that reflects a substandard Federal employee. But the fact of the matter is that hiring freezes or 

the threatening of that or other cuts to resources that should support our Federal workers are often the reason that that is happening. So we have got to be very careful about putting that kind 

of narrative out. 

So as I close, I just want to thank our Federal workforce for the 

great work that they do, and let’s see if we can be enlightened 

enough to go out and work to get the private sector to embrace 

some of these standards and benefits that the Federal workforce 

has. 

And I yield back. 

Mr. ISSA. [Presiding] I thank the gentleman for yielding back. 

I now recognize the chairman, the good morning from North 

Carolina, Mr. Meadows. 

Mr. MEADOWS. I thank the chairman. I thank him for his willingness to fill in in his old seat that is certainly one that has seen a 

lot of great work from his perspective and the perspective of many 

others. 


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So let me go ahead and follow up. I apologize. I have got somebody—actually, I have got someone from the continent of Africa 

that is here who came for surgery here in America because as 

much as we are dealing with problems here, it is still the greatest 

country on the face of this globe. And as we look at this, it is critically important. So I have got to run right after that, but let me 

go ahead and follow up on a few things. 

Mr. Biggs, we are going to have civil service reform. And so the 

testimony that all of you have here today will play a factor in that. 

And yet I am at a point of where I have got Ms. Simon saying one 

thing. I have got the CBO, Mr. Kile, saying another. I have got you 

and Ms. Greszler saying different things. So I need you to help me 

understand why, from your perspective, Ms. Simon is wrong. And 

all I am wanting to get at are the facts. 

Mr. BIGGS. If you need to know one thing about the figures that 

come out of the Federal Salary Council, they claim that Federal 

employees are—on average receive salaries 34 percent below those 

of non-Federal employees. Non-Federal doesn’t just mean private 

sector. Non-Federal means state and local government workers. If 

you look at the BLS data they use, those data show that state and 

local government workers receive about the same salaries as private sector workers with similar skills, similar job demands. 

So what the Federal Salary Council is telling you is that Federal 

employees on average receive salaries that are 34 percent below 

those of state and local government workers. Go to anybody in 

state and local government; they will laugh if you say that. I mean, 

I’ve been in similar hearings. We’ve had people who worked in 

state government. They say we can’t keep employees in state government because they’ll go to the Federal Government if they have 

the chance. 

Mr. MEADOWS. All right. So you say —— 

Mr. BIGGS. It’s just a wrong —— 

Mr. MEADOWS.—that you will go to anybody and laugh. I appreciate that. She can come up and go to anybody and laugh with your 

testimony as well. So here is what I need. I need some facts. Why 

is it wrong in terms of the comparison? I need data points —— 

Mr. BIGGS. Okay. 

Mr. MEADOWS.—as we look at this. 

Mr. BIGGS. The technical reason that is wrong is a problem we 

call over-grading in the Federal Government, which both the CBO 

and the GAO have documented, which means that you have a position that has the skill demands of, say, a GS–8, but you’ll be assigned, say, a GS–9 or a GS–10. That’s a way of raising pay for the 

employee. When—the data they use from the BLS to compare to 

private sector state and local government workers, the BLS itself 

looks at the job and says by our judgment we think this job is 

equal to a GS–8 on the Federal Government scale. The BLS does 

not look at Federal Government jobs and do their own assessment 

of what the skill demands the job is. They take it for granted that 

the Federal pay scale is correct, that the job is correctly assigned 

—— 

Mr. MEADOWS. So they come from an assumption that the scale 

is the benchmark, not the duties that are performed —— 

Mr. BIGGS. Yes. 


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Mr. MEADOWS.—is that correct? 

Mr. BIGGS. So what you need to do is have the BLS go look at 

Federal positions, do their own assessment of the skill demands of 

the jobs, just like they do with private sector positions, just like 

they do with state and local government positions. I guarantee you 

that 34 percent figure will be—shrink considerably. 

Mr. MEADOWS. All right. So would AEI and Heritage, would you 

be willing to look at both the CBO score and Ms. Simon as she has 

put forth from a Federal workforce and point out both the valid— 

from your perspectives valid and nonvalid assumptions so that we 

can hopefully make a more informed decision. Are both of you willing to do that? 

Mr. BIGGS. I’d be happy to. 

Mr. MEADOWS. All right. 

Ms. GRESZLER. I would like to point out one place that I have 

agreement with Ms. Simon here and that’s in the pensions and the 

fact that the Federal Government is not effectively managing them 

because that’s going into treasuries. Treasuries do not earn the average rate of return that other things do, and so I agree wholeheartedly. And by shifting employees taking that government contribution that’s into a defined benefit plan that’s not actually invested anywhere; it’s used to pay for current government spending. 

Instead of shifting that that guarantees the lowest possible rate of 

return into a Thrift Savings Plan, you can actually get greater returns, greater pension or retirement benefit with a smaller contribution there. And so —— 

Mr. MEADOWS. But we need to be careful there because as we go 

into that, if you take that scenario out further and you apply it to 

other things like Social Security, we run into a number of things 

that potentially—her argument doesn’t hold weight because of—the 

counterargument that is made in the exact opposite paradigm for 

Social Security, quote, ‘‘privatization.’’ Would you not agree with 

that? 

Ms. GRESZLER. I don’t think that the government should be investing the money themselves, but that’s why you take it out of a 

defined benefit plan and you give ownership to the individual because you can look at the state and local pension plans and say, 

yes, they have the ability to invest in whatever they want. And 

what they’ve done with that in large part is play politics with pensions, promise —— 

Mr. MEADOWS. Okay. 

Ms. GRESZLER.—far more than they can afford to pay. 

Mr. MEADOWS. All right. I am running out of time. So let me say 

this. Mr. Kile, I would ask you to do the same and say—you know, 

there has been a lot of accusations that CBO is not accurate on 

this, which I find really interesting because when CBO says something that we like, we use it; when they don’t, we really condemn 

it. Both sides do that. I find that they are condemning you today, 

but yet, they use the CBO to justify their arguments on the Affordable Care Act at the same time. So I find it a little bit—a little hypocrisy in that. So here is what I would ask you to do is look at 

your study as it relates to the charges that Ms. Simon made in 

terms of what you didn’t consider. And I heard you loud and clear. 

And I want you to see if you can address that. I can probably inVerDate Nov 24 2008 10:28 Sep 12, 2017 Jkt 000000 PO 00000 Frm 00128 Fmt 6633 Sfmt 6633 H:\26558.TXT APRIL

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struct you a little bit more to get back to this committee than I can 

as a request for the others. What would be a reasonable time period to do that, in 60 days? 

Mr. BIGGS. Let me talk to my colleagues and figure out when we 

can get back to you on that, but —— 

Mr. MEADOWS. Okay. If you can give us an update with a time 

frame within the next 14 days so that way we know what to respond to, that would be great. 

Mr. BIGGS. Yes, we can do that. 

Mr. MEADOWS. All right. I want to thank all of you, and Mr. 

Chairman, I will yield back to you. 

Mr. ISSA. I thank the gentleman. Thank you for yielding back. 

I am going to be brief. I don’t anticipate a full second round, but 

the ranking member may have some additional questions. But I 

want to just try to bring this to some summation of some things 

that I hope we agree on. Ms. Simon, I will go to you first. There 

has been a lot of discussion. If this committee, which certainly has 

the jurisdiction, the capability, did a modernization of the pension 

and allowed people, let’s say, at their fifth year when they vest 

under the current system to opt into a rollover to a TSP, all the 

funds including our portion, would that be something that you believe could be in their best interest if they decide it is in their best 

interest? 

Ms. SIMON. No, absolutely not. The current Federal retirement 

system really was created in the era of Ronald Reagan. It was a 

bipartisan compromise —— 

Mr. ISSA. No, I understand —— 

Ms. SIMON.—and —— 

Mr. ISSA. I understand how we did away with the 2.5 percent 

and no Social Security, went into this —— 

Ms. SIMON. That’s correct. 

Mr. ISSA.—defined benefits, but I would like you to answer the 

question —— 

Ms. SIMON. But the —— 

Mr. ISSA.—as to why you would object to essentially people taking control of the entire amount that would otherwise be held by 

the government for decades and putting it into something that they 

could borrow against, they could invest against, and they could use 

as they please, as they do more often in the private sector? 

Ms. SIMON. The reason we would oppose that and we would advise our members strongly not to do that, God forbid if Congress 

did vote to take away people’s defined benefit plan is because —— 

Mr. ISSA. Ma’am, I don’t mind your using a lot of terms, but let’s 

just agree to one. We are saying if Congress decided to give them 

the option at their option and their option only to opt out so please 

don’t use the word ‘‘take away.’’ 

Ms. SIMON. Oh, I —— 

Mr. ISSA. When we give an option, it is not a taking away of a 

right. 

Ms. SIMON. I was referring to a proposal that would grandfather 

in people—the option would only be available to existing employees 

and new employees would have no —— 

Mr. ISSA. Right. No, and I am simply —— 

Ms. SIMON.—opportunity —— 


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Mr. ISSA.—asking a question that I think Heritage and AEI were 

referring to, which is—and I think CBO and GAO would score it 

as likely neutral in the long run. It might cost us in the 10-year 

window because the money would disappear even though technically it isn’t ours. But leaving all of the technical stuff, simply 

the question of, as a representative —— 

Ms. SIMON. Yes, I —— 

Mr. ISSA.—of these employees, do you believe that they should 

have that choice, and if not, why? 

Ms. SIMON. The arguments, as Mr. Meadows said, are the same 

arguments against Social Security privatization. These retirement 

savings vehicles put all the risk of future retirement income adequacy onto the worker. If the stock market happens to decline by 

a substantial amount at the moment that a particular worker is— 

has chosen or is forced to retire, that will have a huge —— 

Mr. ISSA. Okay. I —— 

Ms. SIMON.—impact on their ability —— 

Mr. ISSA. I have your answer —— 

Ms. SIMON.—to support themselves in retirement —— 

Mr. ISSA. Thank you. 

Ms. SIMON.—yet if they have a —— 

Mr. ISSA. Thank you. 

Ms. SIMON.—defined benefit —— 

Mr. ISSA. Thank you. 

Ms. SIMON.—that won’t happen to them. 

Mr. ISSA. I understand your answer. But I want to ask from a 

standpoint of CBO particularly. Is it reasonably easy for you to— 

or maybe GAO would study it, and then there is Heritage, who is 

so kind to study us. The performance of TSPs on behalf of the 

workforce over any given period and the performance of their pension plan over the same period of time, 5 years, 10 years, 20 years, 

I am going to suspect that you can come back to us and show that 

TSP—which is not an invest in just anything; it is a broad investment base—has outperformed the defined benefit plan and every 

single Federal worker, given that same amount of dollars moved 

into the other plan, would get more money over any period of time 

we could study going back to Reagan. Ms. Greszler? 

Ms. GRESZLER. Yes, that’s absolutely what you would see. And by 

definition, if you’re giving workers the choice to have this money, 

the exact same amount, there’s really not a way that they would 

have less. All they have is a choice. As Ms. Simon pointed out, 

those funds are ineffectively invested in the Treasury. They could 

be ineffectively invested in Treasury by that worker’s own option, 

and that’s the lowest return they would get. If they make other 

choices, they would have higher returns. 

Mr. ISSA. Mr. Kile, I am not going to ask you the same question; 

I am going to add to it for a moment. And I am not asking you 

to shoot completely from the hip, but as you know, the Federal 

workforce has a disincentive to stay past their pension vesting. 

When you reach—depending upon the scale, let’s just say 55 and 

you have got 25 years, you are really working for a fraction of your 

pay. And if you leave and go to another job, you can immediately 

collect both pay and healthcare benefits for life with escalations. If 


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you stay, you essentially have a de minimis accrual. Is that correct? 

Mr. KILE. That sounds correct, yes. 

Mr. ISSA. Okay. So if—although —— 

Mr. KILE. Actually, Congressman, the accrual stays the same, 

but I understand your point about what is being foregone with the 

other job. 

Mr. ISSA. Right, but—yes. Okay. So the question is if there is a 

disincentive for the Federal workforce to stay and if we were to go 

to a system that essentially in perpetuity we say, look, we are 

going to continue allowing you to roll your money into your own defined benefits plan, we are in a sense—no matter how long you 

work, your money continues to accrue and compound and outperform, as we have been told—and I think it will be documented— 

outperform the government’s defined benefit plan, would we in 

your estimation be able to hold onto the Federal workforce longer 

and as a result have a lower cost that comes with the turnover of 

experienced Federal employees? 

Mr. KILE. That’s something that we would have to look into. We 

haven’t studied the—that effect on turnover and—or retirement. 

There are a fair number of employees who continue on beyond their 

retirement eligibility and forego some of those retirement benefits 

that you alluded to. 

Mr. ISSA. Okay. Well, to the extent that you have the ability to 

study it, I would appreciate knowing about it. 

Ultimately, this hearing today really is about what is in the best 

interest of the Federal employment base. 

I am going to go to the ranking member in just a moment, but 

I just want to—I don’t expect to do an additional follow-up. I think 

a lot of areas were dealt with here today. The one that I heard both 

here and when I was listening in the other room was that we do 

not currently have a system that determines what the fair compensation is in a region for essentially a like job, meaning what we 

tell our contractors is they must pay a prevailing wage, and they 

go out and they advertise and people come in and that establishes 

a prevailing wage. At least with some regularity that wage would 

be much less. And when it is more, generally, we are asked to pay 

when it is more but we don’t get the benefit when the prevailing 

wage is less. And I think I heard that fairly broadly. And it is the 

inherent nature of a one-size-fits-all step system. Would most or all 

of you agree to that? Okay. 

Ms. Simon, I will note that you shook your head no, that you believe every employee being paid in Mississippi and in Silicon Valley 

the exact same wage is okay. 

Ms. SIMON. Well, in the Federal Government, they aren’t. 

Mr. ISSA. Exactly. In the Federal Government, in Mississippi if 

it is too low, there is no process to take it away, but in Silicon Valley, we do pay a COLA premium, right? 

Ms. SIMON. Are you asking me if the Federal Government lowers 

wages ever? 

Mr. ISSA. Yes. Is there a negative COLA? 

Ms. SIMON. Not that I am familiar with. 

Mr. ISSA. Thank you. I go to the ranking member for his comments. 


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Mr. CUMMINGS. I am going to be very brief. I want to again 

thank all of you for being here today. And I want to associate myself with what Mr. Sarbanes said, my colleague from Maryland. 

You know, we can race to the bottom and cut, cut, cut, or we can 

have a high standard for our employees. So, I mean, if we want to 

do these comparisons and look to see what we should be cutting, 

looking at private sector we ought to reverse it because it is not 

only what we are doing for the employees. 

We are also concerned about what the employees are doing for 

our constituents. And we want employees that want to be around, 

we want high morale, and I know the lady from the District of Columbia talks about this all the time, that we should have high expectations of our employees, and I have talked about that. And we 

talk about it because it is so important. 

You know, before you got here, Ms. Norton, they were talking 

about the fact that, you know, some of the employees are able to 

get maybe discounted babysitting services or the bus fare, being 

able to get—I mean, those are things that are incentives for people 

to work for us. Am I right, Ms. Simon? 

Ms. SIMON. Yes. 

Mr. CUMMINGS. Yes. And so I think we need to be racing to the 

top as opposed to trying to go the opposite direction of racing in 

that direction. And again, I am concerned about our customers. I 

am concerned about the people who sent us here because I want 

them to have good services. 

I remember when I first came to the Congress, I told my office— 

I still do this—I wanted to run my office like a law firm because 

I had practiced law for many years. And I wanted to run it like 

a law firm because I wanted the people that came into the office 

to feel like they were being treated as if, you know, they were paying us millions of dollars because I wanted them to have high expectations of the staff. And then the staff felt good about what they 

were doing. We were able to put out a good product. 

And again, I talked earlier about how, you know, people come 

into Federal service, the ones I have talked to, because they really, 

really want to make a contribution to society. 

And so, again, I want to thank you all for being here, and I will 

yield back. 

Mr. ISSA. Thank you. And I would like to close with just a question, which is completely not going to be difficult for three out of 

the five of you. From CBO, GAO and—are you on FEHBP? Are you 

a Federal worker? You are not? 

Ms. SIMON. No. 

Mr. ISSA. You are on the union side. So for two of you, what do 

you think about the Federal Employee Healthcare Benefit Plan? Do 

you feel that in this era of everyone—this consternation about 

health care, do you feel that you are in the quiet of the storm by 

having hundreds of choices and programs that you can choose from 

for your health care as a Federal worker? 

Mr. KILE. So I think I’d rather go back to the—to what we say 

in the report where we talk about the cost of benefits by type rather than, you know, providing a personal opinion. 

Mr. ISSA. Okay. So you are good with the report. I will ask. 

Health care as a Federal employee receiving FEHBP with an 80 


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percent match from the Federal Government, are you pretty 

happy? 

Mr. GOLDENKOFF. I am happy, but I have nothing to compare it 

to either and, you know, I have no private sector experience on this 

outside of my area of expertise. 

Mr. ISSA. Okay. Well, I am going to close by saying I miss it. I 

have been in Obamacare now for a number of years, and I truly 

miss the Federal Employee Health Benefit Plan, which I am proud 

to say, for all the discussions that may go on, continues to be a program that is able to bid all over the country and try to meet the 

needs of the Federal workforce. So I say that because this hearing 

is important. 

The ranking member is right about one thing. We do need to motivate the Federal workforce. We do need to remind people that 

they do serve, and although we get to determine what the fair price 

is when we employ them, at the same time, it is not their problem 

if they are, if you will, compensated at a rate that statistics show 

might not be the same. They came to work, they took the schedule, 

and they performed the jobs. 

And so I want to thank you all for your testimony today. The 

record will stay open for three legislative days in order to have any 

extensions or questions answered. 

And with that, we stand adjourned. 

[Whereupon, at 11:57 a.m., the committee was adjourned.] 


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