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74–452 ps 2001

S. Hrg. 107–128

NOMINATIONS OF OTHONIEL ARMENDARIZ AND

KAY COLES JAMES

HEARING

BEFORE THE

COMMITTEE ON

GOVERNMENTAL AFFAIRS

UNITED STATES SENATE

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

ON THE

NOMINATIONS OF OTHONIEL ARMENDARIZ TO BE A MEMBER OF THE

FEDERAL LABOR RELATIONS AUTHORITY AND KAY COLES JAMES TO

BE DIRECTOR OF THE OFFICE OF PERSONNEL MANAGEMENT

JUNE 21, 2001

Printed for the use of the Committee on Governmental Affairs

(

(II)

COMMITTEE ON GOVERNMENTAL AFFAIRS

JOSEPH I. LIEBERMAN, Connecticut, Chairman

CARL LEVIN, Michigan

DANIEL K. AKAKA, Hawaii

RICHARD J. DURBIN, Illinois

ROBERT G. TORRICELLI, New Jersey

MAX CLELAND, Georgia

THOMAS R. CARPER, Delaware

JEAN CARNAHAN, Missouri

MARK DAYTON, Minnesota

FRED THOMPSON, Tennessee

TED STEVENS, Alaska

SUSAN M. COLLINS, Maine

GEORGE V. VOINOVICH, Ohio

PETE V. DOMENICI, New Mexico

THAD COCHRAN, Mississippi

ROBERT F. BENNETT, Utah

JIM BUNNING, Kentucky

JOYCE A. RECHTSCHAFFEN, Staff Director and Counsel

SUSAN E. PROPPER, Counsel

JASON M. YANUSSI, Professional Staff Member

HANNAH S. SISTARE, Minority Staff Director and Counsel

DAN G. BLAIR, Minority Senior Counsel

JOHANNA L. HARDY, Minority Counsel

DARLA D. CASSELL, Chief Clerk

(III)

C O N T E N T S

Opening statements: Page

Senator Akaka .................................................................................................. 1

Senator Cochran ............................................................................................... 4

Senator Voinovich ............................................................................................. 4

WITNESSES

THURSDAY, JUNE 21, 2001

Hon. George Allen, a U.S. Senator from the State of Virginia ............................ 1

Hon. John Warner, a U.S. Senator from the State of Virginia ............................ 6

Othoniel Armendariz to be a Member of the Federal Labor Relations Authority .......................................................................................................................... 9

Kay Coles James to be Director of the Office of Personnel Management ........... 13

ALPHABETICAL LIST OF WITNESSES

Allen, Hon. George:

Testimony .......................................................................................................... 1

Armendariz, Othoniel:

Testimony .......................................................................................................... 9

Prepared statement .......................................................................................... 25

Biographical and financial information .......................................................... 27

Pre-hearing questions and responses .............................................................. 35

James, Kay Coles:

Testimony .......................................................................................................... 13

Prepared statement .......................................................................................... 43

Biographical and financial information .......................................................... 50

Pre-hearing questions and responses .............................................................. 61

Pre-hearing questions from Senator Lieberman and responses ................... 81

Post-hearing questions from Senator Akaka and responses ......................... 90

Post-hearing questions from Senator Thompson and responses .................. 92

Warner, Hon. John:

Testimony .......................................................................................................... 6

APPENDIX

Letter to the Hon. Joseph I. Lieberman, from Frank R. Wolf, a Member

of the U.S. House of Representatives, dated June 20, 2001 ............................. 23

Letter to the Hon. Joseph I. Lieberman, from Tom Davis, a Member of

the U.S. House of Representatives, dated June 18, 2001 ................................. 24

(1)

NOMINATIONS OF OTHONIEL ARMENDARIZ

AND KAY COLES JAMES

THURSDAY, JUNE 21, 2001

U.S. SENATE, COMMITTEE ON GOVERNMENTAL AFFAIRS, Washington, DC.

The Committee met, pursuant to notice, at 2:30 p.m., in room

SD–342, Dirksen Senate Office Building, Hon. Daniel K. Akaka

presiding.

Members present: Senators Akaka, Cochran, and Voinovich.

OPENING STATEMENT OF SENATOR AKAKA

Senator AKAKA. The Committee will please come to order. I want

to thank our witnesses, their families and our guests for being with

us today. It is so good to be here with Senator Cochran. This afternoon we are considering the nominations of Othoniel ‘‘Tony’’ Armendariz, to serve a 5-year term as a member of the Federal

Labor Relations Authority, and Kay Coles James to serve a 4-year

term as director of the Office of Personnel Management. Before we

call up our witnesses, I would like to welcome our colleagues from

Virginia, and in particular the Hon. George Allen, who will introduce Ms. James. I would also like to insert into the record a letter

from Representative Tom Davis of Virginia in support of Ms.

James. Senator Allen, good to have you here before the Committee.

Senator ALLEN. Aloha.

Senator AKAKA. Aloha.

TESTIMONY OF HON. GEORGE ALLEN, A U.S. SENATOR FROM

THE STATE OF VIRGINIA

Senator ALLEN. Thank you. Thank you, Mr. Chairman and Senator Cochran. It is a pleasure to be before this Committee, but it

is a real privilege and pleasure for me to be introducing Kay Coles

James for your consideration, and an outstanding nomination by

President Bush to have her as director of the Office of Personnel

Management.

Kay has been a very personal friend, and later an ally for many

years, and she is a person I have the highest respect and admiration for, not just as a friend, but as an ally, a mentor and an adviser. She will once in awhile E-mail me or send me information

over the years, when you get into some contentious issues. I will

keep her words of wisdom in my speech file or in my briefcase to

refer to them, to make sure I keep a proper perspective. It is great

to see Kay here, her husband, Charles Senior, Charles Junior,

called Chuck—Chuck is her son—and her daughter, Lizzy and her

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husband are here—it is good to see so many of the family. They

have one other child, Robert, who is here, too. So we have the

whole James crew with us.

You could look at Ms. James’ resume and her record of achievement, which is really a motivational one for anyone, if you look at

her life and how she started off and how she has excelled throughout life, and she is a personal example of someone with hard work,

with guile, with wit and wisdom, has worked in so many different

areas, and wherever she has worked, whatever effort she has contributed her talents to, has been all the better for it.

As former governor, I was very fortunate to have Kay James as

our Secretary of Health and Human Services. Starting off in January, 1994 we brought together a lot of people and a lot of very different agencies, working on a variety of initiatives. As Secretary,

Kay Coles James was responsible for 14 diverse State agencies,

having 19,000 employees, with a combined biennial budget of about

$8.5 billion, and there are a variety of agencies in there dealing

with health, welfare, obviously social services.

One of the more difficult things we did, but very successful, was

welfare reform, the Empowerment Commission; and what we were

able to do was put forward a very comprehensive, pro-family, prowork welfare reform. The welfare rolls have been reduced by well

over 50 percent. The taxpayers have saved hundreds of millions of

dollars, but best of all it is very pro-family. Families are not being

busted up, and best of all, tens of thousands of Virginians are now

leading independent, self-reliant lives. That is the policy.

Getting the bill passed was no easy task, but nevertheless what

Kay did as Secretary of Health and Human Services in this regard

was make sure that all the folks in social services who were on the

front lines, implementing these laws that get passed and advocated, had a right attitude, a proper spirit, make them an employment agency. They had stickers that said, ‘‘Yes, we can.’’ That is

a good, positive attitude. That is the sort of motivation you would

want for a director of personnel management, and seeking out to

find the best people to work for the Federal Government and its

services to the people, understanding their commitment to consumer service. But what Kay can do is motivate folks, attract the

best talent, and have them provide those services, the Federal Government services, in the best way possible to the people of America

or internationally, that are served by the Federal Government.

I think that welfare reform implementation is a prime example

of her capabilities, as well as the child support enforcement. Too

many people are on welfare because, generally speaking—those fathers are not being responsible. Under Kay’s creative leadership,

child-support enforcement was vastly increased, working with

DMV, working with the Department of Game and Inland Fisheries.

Suspending driver’s licenses or hunting and fishing licenses would

really get a lot of folks’ attention to pay child support enforcement,

and with reciprocity with other States, even when they would flee

to some other State, we would still track them down and get that

money for their children.

So that is the kind of creative leadership that one would want

as director of the Office of Personnel Management. She has worked

in many other areas at the local, State and Federal level. She was

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also in academia, as dean of the Graduate School of Government

at Regent University. She is an author of several books, the most

famous, I think, of which is her first, ‘‘Never Forget,’’ which is

never forget where you came from. She has served in the White

House previously, as associate director of the White House Office

on National Drug Control Policy in the first Bush Administration.

She also was assistant secretary at the U.S. Department of Health

and Human Services, also in the first Bush Administration.

In the private sector, again exemplary service. She was executive

vice president and chief operating officer with The One-to–One

Partnership, which is an umbrella organization for mentoring programs. She was the director of public affairs for National Right to

Life Committee, personnel director for Circuit City Stores, director

of community education and development for Housing Opportunities Made Equal, or HOME, in Richmond, Virginia; and she also

has worked in a variety of areas, as a commissioner on the National Commission for Children.

She served on the Fairfax County School Board. That is where

she was when we were able to get her to be Secretary of Health

and Human Resources; and, in fact, when she went off into academia, I still said, ‘‘We need you, Kay, in Virginia.’’ The most important thing for the future of our children in Virginia and our

country is education, and Kay served on the Virginia State Board

of Education, advancing and advocating high academic standards

for all students, as well as accountability for students and teachers

and schools.

She also serves on the boards for the Fellowship of Christian

Athletes and Young Life. She currently serves on the board of directors for a variety of organizations, Focus on the Family, The Virginia Children’s Education Foundation, and the Center for Jewish

and Christian Values. I am very confident, Mr. Chairman and

Members of the Committee, that Kay Coles James, as director of

the Office of Personnel Management, will help guarantee that the

agencies have the personnel, the qualified, capable and motivated

personnel necessary to meet the needs and the expectations.

In fact, if they have Kay’s spirit, they will exceed the expectations that people have for government agencies. So it is my sincere

pleasure to introduce this exceptional woman. In fact, she is a tremendous Renaissance woman. She really is. You will find her to be

articular, smart, inspirational, cheerful, experienced, knowledgeable leader, with exceptional character and integrity, and I proudly

present Kay Coles James to you as a nominee this afternoon, and

obviously wholeheartedly recommend her confirmation.

Thank you, Mr. Chairman and Senator Cochran.

Senator AKAKA. Thank you very much, Senator Allen. Thank you

for your gracious and personal remarks. As a matter of fact, she

sounds so great we want to hire her.

Senator ALLEN. Well, that was my feeling, as well, Mr. Chairman.

Senator AKAKA. Well, I thank you very much for your comments.

Do you have any comments, Senator Cochran?

4

OPENING STATEMENT OF SENATOR COCHRAN

Senator COCHRAN. Mr. Chairman, I am moved to applaud and

cheer—a great statement, and it is very exciting to know that we

have someone of the talent, experience and qualities of Ms. James

to come serve in this government. Thank you very much for being

here to introduce her.

Senator ALLEN. My pleasure.

Senator AKAKA. Thank you very much, Senator Allen.

The rules of the Committee on Governmental Affairs require that

an inquiry be conducted into the experience, qualifications, suitability and integrity of the nominee to serve in the position to

which he or she has been nominated. The Committee has received

all of the required information. In addition, the nominees have provided written responses to pre-hearing questions submitted to the

Committee concerning issues relevant to the position for which

they have been nominated.

Committee staff reviewed all of the information. In addition, staff

have examined the financial disclosures submitted by the Office of

Government Ethics. Copies of the nominees’ biographical information and pre-hearing responses will be placed in the record as part

of this hearing and are available upon request.

Their financial statements are available for inspection by the

public in the Committee office, and Senator Cochran and I have reviewed the FBI background investigation reports.

The Committee requires that all nominees be under oath while

testifying on matters relating to their suitability for office, including the policies and programs which the nominee will pursue, if

confirmed. Our first witness will be Mr. Armendariz. Will you

please come to the witness table and remain standing? Please raise

your right hand. Do you solemnly swear to tell the truth, the whole

truth, and nothing but the truth, so help you, God?

Mr. ARMENDARIZ. I do.

Senator AKAKA. Thank you very much. You may be seated. At

this time, I would like to ask Senator Cochran whether he has any

opening comments?

Senator COCHRAN. Mr. Chairman, I have no opening statement.

We welcome the witnesses and we appreciate the attendance of so

many today at this confirmation hearing. I appreciate the fact that

we are having the hearing, even though we have not passed formally the organizational reorganization measure that is being discussed between the two leaders. But we think it is important to go

forward with these nominations to fill these important positions in

the Executive Branch of our government, and we thank you, Mr.

Chairman, for convening the hearing in a timely way.

Senator AKAKA. Thank you very much.

Senator Voinovich.

OPENING STATEMENT OF SENATOR VOINOVICH

Senator VOINOVICH. First of all, it is a pleasure to welcome both

of our nominees, and I am pleased, Mr. Chairman, that this Committee is considering these nominations.

I would like to say to both of the nominees that I appreciate that

you are interested in public service. We need good people. Mr.

Chairman, I consider the Office of Personnel Management to be an

5

extremely important office within the Federal Government. According to its vision, OPM exists to help agencies get the right people

in the right jobs with the right skills at the right time, so they can

produce results for the American people.

With a mission that has so much impact on the manner in which

the Federal Government operates, I do not think we can overemphasize the significance of finding the best possible leadership

to run OPM. I believe that the President has nominated someone

who can get the job done. Ms. James brings over 20 years of public

policy experience, including service as Virginia’s Secretary of

Health and Human Services, a position in which she had responsibility for 14 State agencies and 19,000 employees, with a combined

biennial budget of $8.4 billion.

Mr. Chairman, as you know, since coming to the Senate I have

put a great deal of emphasis on the Federal Government’s management challenges. First and foremost among these shortcomings is

the issue of building and maintaining a quality public workforce,

and we are in trouble today. We have had testimony after testimony that says this Nation is in intensive care when it comes to

the Federal workforce.

A great deal of responsibility is going to rest with OPM. The

challenges there are going to be more important and more significant than perhaps maybe any time in our country’s history, and I

am not going to go into all of the details, because, Ms. James, you

know what they are. The OPM director and the deputy director for

management at the Office of Management and Budget will have to

work together closely to forge the administration’s policy on strategic human capital management, and I just want to emphasize

how important it is. That is why we really need, Mr. Chairman, to

confirm Ms. James. We need a national initiative in this area, and

OPM can really make a difference.

I would also like to extend my regards to Othoniel ‘‘Tony’’

Armendariz. I am confident that as a former member of the Federal Labor Relations Authority, you are fully qualified to serve in

that capacity again. In addition, I would like to say how pleased

I am that you have chosen to avail this Nation of your talents once

again. It is that spirit of devotion that we hope all Americans

would emulate.

So, Mr. Chairman, I am glad to be here today to hear from our

two nominees, and hopefully we can move them along quickly.

Thank you.

[The prepared statement of Senator Voinovich follows:]

PREPARED STATEMENT OF SENATOR VOINOVICH

Thank you, Mr. Chairman.

It is a pleasure to welcome Mr. Othoniel Armendariz, President Bush’s nominee

to the Federal Labor Relations Authority, and Ms. Kay Coles James, the President’s

nominee to be Director of the Office of Personnel Management to the Committee

this afternoon. I am pleased that the Committee is considering their nominations.

Mr. Chairman, I consider OPM to be an extremely important office within the

Federal Government. According to its vision statement, OPM exists ‘‘to help agencies get the right people in the right jobs with the right skills at the right time so

they can produce results for the American people.’’ With a mission that has so much

potential impact on the manner in which the Federal Government operates, I don’t

think we can over-emphasize the significance of finding the best possible leadership

6

to run OPM. Fortunately, President Bush has nominated an individual who has the

experience and knowledge to be a top-notch OPM Director.

Ms. James brings over 20 years of public policy experience, including service as

Virginia’s Secretary of Health and Human Resources, a position in which she had

responsibility for 14 State agencies and 19,000 employees with a combined biennial

budget of $8.4 billion. She has also served on a wide variety of commissions, task

forces and policy councils, convened by the congressional leadership and former

presidents of the United States. I am pleased that she has chosen to answer our

Nation’s call once again, agreeing to take this important position in the Administration.

Mr. Chairman, as you know, since coming to the Senate, I have put a great deal

of emphasis on the Federal Government’s management challenges. First and foremost among these shortcomings is the issue of building and maintaining a quality

public workforce. A great deal of responsibility for addressing the government’s human capital crisis will rest upon the shoulders of the next OPM Director.

With the average age of the Federal employee at 47 years old and rising, the imminent retirement of hundreds of thousands of experienced employees by the end

of this decade and inadequate workforce planning processes at many agencies, the

Federal Government is in desperate need of a comprehensive strategy to address

these challenges. Having focused my attention on this issue in the Government

Oversight Subcommittee for the past 21⁄2 years, and for a great deal longer in my

previous capacities as Mayor of Cleveland and Governor of Ohio, I believe that there

are few more important issues for Congress, the Administration and the various

Federal agencies to address than the management of the Federal workforce. All governmental functions, from conducting research at health centers and ensuring safe

drinking water to operating safe airports and protecting our national security, must

be supported by a competent corps of public employees.

The OPM Director and the Deputy Director for Management at the Office of Management and Budget should work closely together to forge the Administration’s policy on strategic human capital management. Once these two positions have been officially filled, I believe it would be appropriate for the Committee, Mr. Chairman,

to hold a hearing to examine the Administration’s plans for addressing the government’s human capital crisis.

Ms. James, I was pleased that we had the chance to meet last month and to receive your commitment to work with me on this issue. As I expressed to you then,

I am committed to working with the Administration to improve the Federal Government’s management of its people. While we are faced with a challenging set of problems, I am confident that, working together, we can formulate lasting solutions.

I would also like to extend my warm regards to Mr. Othoniel ‘‘Tony’’ Armendariz.

I am confident that, as a former Member of the Federal Labor Relations Authority,

Mr. Armendariz is fully qualified to serve in this capacity once again. In addition,

I would like to say how pleased I am that Mr. Armendariz has chosen to avail this

nation of his talents once again. It is that spirit of devotion to serve one’s fellow

man that we should hope all Americans will emulate.

Mr. Chairman, as you know, I did a great deal of work as Governor of Ohio to

advance labor-management partnerships in Ohio’s State agencies. I look forward to

asking Mr. Armendariz some questions about relations between these two groups

within the Federal Government.

Thank you, Mr. Chairman.

Senator AKAKA. I agree with you. We ought to move them along

quickly. Thank you very much for your statement. And now I

would like to call on our Senator from Virginia, Senator John Warner, for his statement.

TESTIMONY OF HON. JOHN WARNER, A U.S. SENATOR FROM

THE STATE OF VIRGINIA

Senator WARNER. I thank you, Mr. Chairman, Members of the

Committee. I apologize for being late. I was elsewhere testifying.

I really wanted to be here for many reasons. Of course, I highly

support the nominee, but throughout my 23 years in the Senate—

and I came to the Senate with the distinguished gentleman on your

right, Mr. Cochran, who also came here 23 years ago—I have

worked hard on behalf of those in Federal Civil Service and Government employees. Why? Because, one, we have a very significant

7

group who reside in the Commonwealth of Virginia, work in the

Commonwealth of Virginia, and you are also looking at an individual that held many different positions in the Federal Government before I came to the U.S. Senate. They range from a firefighter in the forests of the Great West, as an employee of the Forest Service, to a letter carrier during part of World War II, to Secretary of the Navy, where I had a department of over one million

in uniform and about 700,000 civilians at that time.

So I have had extensive experience and I owe a great debt of

gratitude to the civil servants who, through that progression of

jobs, helped to train me and take care of me; and, therefore, I am

going to be ever watchful as I observe the performance of the duties by Ms. James, and I am confident that she will do well. We

here in the Congress have been working on legislation to address

many significant and timely issues affecting the Federal workforce

and OPM’s role in finding solutions to these problems is very critical.

I meet regularly with representatives of the various employee

groups. It is estimated that over the next several years, over half

the Federal workforce will be eligible for retirement. Senator Cochran and I are not included in that group. Recruitment and retention of a skilled, qualified Federal workforce is crucial, and I do not

say that lightly, Mr. Chairman. I say that with great sincerity.

Pay, affordable health care coverage and continued improvements

to the Federal Employees Retirement System are just some of the

issues Congress has been working on in consultation with OPM

and related organizations.

I believe that with her previous experience in government, on the

local, the State and Federal levels, and her impressive accomplishments in the private sector, Kay Coles James will be able to handle

these challenges that lay before her as we reshape the Federal

workforce. I will sleep with one eye open, watching, as she discharges these duties, because I have an obligation to pay back to

the current group in Federal service all the benefits that I received

through these many years.

I thank the Chairman and I thank the Members for their indulgence, and I shall wish you very much the best of luck.

Senator AKAKA. Thank you very much, Senator Warner. We really appreciate your statement.

Senator COCHRAN. Mr. Chairman, may I join you in thanking

Senator Warner for taking time to come by and share with the

Committee his impressions and knowledge of our nominee, Ms.

James, and his personal experiences. He has been a leader in every

way in this subject area of legislation and policies that are pending

before the Congress, and we are thankful to him for that leadership. Thank you, Senator.

Senator AKAKA. Thank you very much. The FLRA was established in 1978 under the Civil Service Reform Act. It offers guidance, resolves disputes and ensures compliance with regulations

concerning Federal labor-management relations. Its mission, under

the Federal Service Labor–Management Relations Statute, is to

promote stable, constructive labor relations that contribute to a

more effective government.

8

Mr. Armendariz previously served as a member of the FLRA,

from December 1989 to March 1997, and worked on over 2,000 decisions. Mr. Armendariz, I would like to thank you for being with

us this afternoon and to congratulate you on your nomination. At

this time I would like to ask you to introduce your family to us and

to the audience, please.

Mr. ARMENDARIZ. Thank you, Mr. Chairman, and yes, I have my

wife, Blanche Armendariz, here. She is sitting right behind me, in

the green dress.

Senator AKAKA. Welcome to the Committee.

Mr. ARMENDARIZ. I also want to thank the chairman of the FLRA

for being here, Ms. Cabiness, another member of the FLRA, Carol

Pope, and some members of the FLRA staff that have come to this

hearing.

Senator AKAKA. Well, that is great that you have support.

Mr. ARMENDARIZ. If I may, Mr. Chairman, I would like to give

a little statement.

Senator AKAKA. Mr. Armendariz, before you do that, the Committee has three questions we ask of all of the nominees for the

record, that I would like to ask you.

Mr. ARMENDARIZ. Yes, sir.

Senator AKAKA. Is there anything you are aware of in your background which might present a conflict of interest with the duties

of the office to which you have been nominated?

Mr. ARMENDARIZ. Absolutely not.

Senator AKAKA. Do you have any reason, personal or otherwise,

that would in any way prevent you from fully and honorably discharging the responsibilities of the office to which you have been

nominated?

Mr. ARMENDARIZ. No, sir, I do not have any.

Senator AKAKA. Do you agree without reservation to respond to

any reasonable summons to appear and testify before any duly-constituted committee of Congress, if you are confirmed?

Mr. ARMENDARIZ. Yes, sir, I do.

Senator AKAKA. Well, thank you very much. After serving on

FLRA for such a long period of time, there is no doubt that you

have the expertise to fill this position, and I have only a couple of

questions. What new issues and attitudes do you see developing because of outsourcing and privatization of government services?

Mr. ARMENDARIZ. Privatization and outsourcing is a trend that

has taken place lately, and, of course, it creates new issues because

there is, in part of the force of—Federal employee force, will no

longer be in the same level, insofar as the labor-management relations that exist or have existed traditionally. So, as time goes by,

there will be issues that we do not know yet what they may be that

will arise, insofar as the effects it may have, vis-a-vis one and the

other, part of the workforce. But we will be watching and analyzing, and looking into whether the effects, if any, can be overcome and corrected.

So I will be part of that group that will be looking into that, if

confirmed.

Senator AKAKA. Before we go any further, will you give us your

statement? I have other questions to ask.

9

1 The prepared statement of Mr. Armendariz appears in the Appendix on page 25.

Biographical and financial information appears in the Appendix on page 27.

Pre-hearing questions and responses appear in the Appendix on page 35.

TESTIMONY OF OTHONIEL ARMENDARIZ1 TO BE A MEMBER

OF THE FEDERAL LABOR RELATIONS AUTHORITY

Mr. ARMENDARIZ. I want to state that I am honored and proud

to have been nominated by President George W. Bush as a member

of Federal Labor Relations Authority, and also that, from December 1989 through March 1997, I had the distinct privilege of serving as a member of the FLRA. After having been nominated twice

and confirmed by the Senate twice before. I fully understand, because of my previous service, and I appreciate the important role

that members have in establishing policies and guidance, relating

to the matters under the Federal service labor-management relations statute.

The role of the FLRA is to contribute to a successful Federal

labor-management relations program, particularly important as the

Federal workforce evolves and addresses new challenges and opportunities that lie ahead. Through the responsibilities entrusted to

the FLRA by Congress, the FLRA has a unique opportunity to contribute to this public interest that Congress has, to develop and

implement modern, progressive work practices, to facilitate and to

improve employee performance, and contribute to an efficient accomplishment of the operations of the government.

I will hope to be one of those that would put his part together

with the other members, to bring, as was said, the Federal workforce out of intensive care, and I hope that it will be well before

too long. I look forward to the confirmation process, and pledge

that, if confirmed, I will take seriously the responsibilities of the

position of member of the agency. I will discharge these responsibilities to the best of my ability.

If I may, I would also like to state that I congratulate and I am

very pleased to have attended a pre-hearing conference with the

staff of the Members of this Committee, who conducted such conference in a very professional and courteous manner, and I thank

them. Thank you very much.

Senator AKAKA. Thank you very much for your statement. I have

asked you my question and I will yield to Senator Cochran for any

questions.

Senator COCHRAN. Mr. Chairman, thank you very much. I am

glad to be here today to congratulate our nominee, Mr. Armendariz. We appreciate your willingness to serve again on the Federal

Labor Relations Authority. Obviously, President Bush thought you

did an excellent job before or he would not have asked you to serve

again. I think that is a very high compliment.

Mr. ARMENDARIZ. Thank you. I am very proud.

Senator COCHRAN. We hear a lot about the challenges that face

the Federal workforce; one is stability; attracting well-qualified employees to serve in the government, and then having a working relationship between the employees and the supervisors and the authorities. What, if anything, would you recommend as suggestions

about how we could improve the stability of the workforce and the

10

outlook for maintaining good labor relations in the Federal Government?

Mr. ARMENDARIZ. Senator, it is a fact that the Federal Government has almost 3 million Federal employees, and that is a huge

investment in human capital, especially at a time when a good

number of good employees are approaching the age of retirement,

after having obtained the skills necessary in the specialties that

they are in. It is very important to maintain a number of avenues

where we can continue recruiting and maintaining those skilled

people. Motivation is one of the main things to continue to have

this wealth of knowledge, provided to the people through the Federal Government.

But there are other ways that we have to look into and test, possibly, to make sure that private industry, especially, will not take

them away from us, but they will continue serving until they retire. It is an investment that we have that we cannot just overlook,

because they have such knowledge that they can provide the newcomers to become as good or better than they have been.

So I will work with the other members of the agency, to look for

specific issues in this area, and look for other alternatives that will

address this challenge that we face.

Senator COCHRAN. Thank you very much.

Thank you, Mr. Chairman.

Senator AKAKA. Thank you, Senator Cochran.

Senator Voinovich.

Senator VOINOVICH. Mr. Chairman, we have had eight hearings

during the last couple of years dealing with the Federal workforce,

and some of the things that are being done and a lot of things that

are not being done. President Clinton issued an executive order

that established labor-management partnerships in Federal agencies. President Bush rescinded that order, but I know there is some

consideration being given to another approach. Are you familiar

with that executive order?

Mr. ARMENDARIZ. I am somewhat familiar, not as much as I

should be or will be, but my feeling is that the labor-management

relations that should exist will work better when the parties choose

the way to approach it, and it could be in the form of a partnership,

or it could be in any other form. I think that the way it should be

entered into and approached should not be mandatory as to one

way only. We have learned that, many times, one size does not fit

all.

So it is possible that the reason why President Bush rescinded

that executive order and issued the other order was to allow the

parties themselves to choose what kind of relationship they should

have, and we should encourage that, I think, because it would be

better to enter into a relationship where both parties feel at ease

and comfortable, than to have one particular relationship because

it has been mandatory to have it.

Senator VOINOVICH. Well, I think the purpose of the labor-management executive order was to bring people together so that labor

and management would sit down and talk to each other; and as a

former governor who was very much into quality management, I

can tell you that if, as the executive, you do not create an environVerDate 11-MAY-2000 11:55 Oct 17, 2001 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6601 74452.TXT SAFFAIRS PsN: SAFFAIRS
11

ment where people get together and talk to each other, quite frankly, sir, it does not happen.

Mr. ARMENDARIZ. That is correct.

Senator VOINOVICH. So I would hope that, if you get this job, that

you would talk about creating some kind of opportunity for labor

and management to come together and talk to each other. I think

that is extremely important, because I can tell you that the labormanagement relationships right now in the Federal Government

are not what they ought to be. Second of all, it is one of the reasons

that has contributed to people who are ready to retire, to retire,

and others that are thinking about early retirement, think about

leaving the Federal Government at a time when we need their expertise and their institutional knowledge.

The other question I want to ask, and I do not know whether my

colleagues know this or not, but of the Senior Executive Service, 60

percent of them get the same pay, and we have people who are

leaving Federal service because their cost of living increase is more

when they leave for their pension than it is for them to remain in

the Federal service. Are you familiar with that, and if you are,

what is your comment about it?

Mr. ARMENDARIZ. Well, I am not really familiar with it, Senator,

but I realize that that may be one of the reasons why a lot of people are leaving us, too, and it is something to be looked into, and

it is a very important issue, and I can tell you that I will bring it

up to the other members so we can come up with some additional

ways to see if we can salvage those people. It is true that sometimes they go to private industry because private industry pays

more, and they need more; and I feel, though, that in their hearts,

they want to stay, the majority, if they can.

Senator VOINOVICH. Thank you.

Senator AKAKA. Thank you very much for your questions. Are

there any further questions? The record will remain open for any

further questions and any statements from our colleagues. Mr.

Armendariz, thank you again.

Mr. ARMENDARIZ. Thank you, Mr. Chairman.

Senator AKAKA. Thank you for being here this afternoon, for your

cooperation with this process, and for accepting this nomination to

public service. We really appreciate what you have said and wish

you well.

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

Senator AKAKA. Thank you again for coming. You may be excused.

Mr. ARMENDARIZ. Thank you.

Senator AKAKA. Ms. James, we now invite you to come to the

witness table, and we will proceed with a hearing on your nomination. I ask that you remain standing and raise your right hand. Do

you solemnly swear to tell the truth, the whole truth, and nothing

but the truth, so help you, God?

Ms. JAMES. I do.

Senator AKAKA. Thank you very much. Ms. James, I would like

to welcome you to the Committee. You and I had a chance to talk

informally earlier this month, and I congratulate you on your nomination. If confirmed, you will be taking the helm of the Federal

Government’s Office of Personnel Management at a most chalVerDate 11-MAY-2000 11:55 Oct 17, 2001 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6601 74452.TXT SAFFAIRS PsN: SAFFAIRS
12

1The letters from Mr. Wolf and Mr. Davis appear in the Appendix on pages 23 and 24.

lenging time. The Office of Personnel Management is the central

management agency of the Federal Government, and OPM administers and enforces Federal Civil Service laws, regulations and

rules, and aids the Executive Branch in managing the Federal

workforce.

It supports the Federal Government in recruiting, retaining,

training and motivating the best and most effective workforce possible. Are there any statements you would like to make, Senator

Cochran?

Senator COCHRAN. Mr. Chairman, thank you. I have wanted to

publicly commend Ms. James for her agreeing to serve, and also to

let her know that the members of Congress from northern Virginia

have written letters, which they have asked to be made a part of

the record, in support of your nomination. Congressman Frank

Wolf, who represents the 10th District of Virginia, and Congressman Tom Davis, who represents the 11th District, both of them in

their letters are very generous in their praise of you and of your

qualifications for service in this important position. Mr. Chairman,

I ask that these letters be made a part of the hearing record.1

Senator AKAKA. Without objection, it will be made part of the

record.

Senator COCHRAN. Thank you.

Senator AKAKA. Senator Voinovich.

Senator VOINOVICH. Mr. Chairman, I have already made my welcoming remarks, and I am very happy that you are here, Ms.

James, and look forward to your service in the Federal Government

in an area that I think is the highest priority. Thank you, Mr.

Chairman.

Senator AKAKA. Thank you very much. We are happy to have you

here. I know you have family here, and I am going to give you the

opportunity to introduce them to us.

Ms. JAMES. Thank you, Mr. Chairman. I do have family here

today. I have many family and friends in the area, and I am afraid

they are the ones that are taking up all the seats in the room

today. I would like to introduce my husband, Charles, my sons,

Chuck and Robert, and my daughter, Elizabeth. This is your big

moment.

Senator AKAKA. You are all welcome.

Ms. JAMES. I have three godchildren here today, young girls that

I thought it was very important for them to be here and to witness

these proceedings, my goddaughter, Katherine Littel, as well as

Grace James and Demi Arnold, and I am delighted to have them

here with me today. Before I begin, Mr. Chairman, I want to acknowledge the fact that this process is grueling and sometimes

anxiety-laden, but thanks to your staff and the staff of Senators

Lieberman and Thompson, I just want to thank all of you for getting me as a nominee through this process, and through your helpfulness, have made it less anxious, and I do appreciate it. Your

staff have been absolutely stellar, and I want to thank them.

I am deeply grateful—should I go on with my statement, Mr.

Chairman?

13

1 The prepared statement of Ms. James appears in the Appendix on page 43.

Biographical and financial information appears in the Appendix on page 50.

Pre-hearing questions and responses appear in the Appendix on page 61.

Post-hearing questions and responses appear in the Appendix on page 90.

Senator AKAKA. May I ask you the questions required of all

nominee’s before you do?

Ms. JAMES. Certainly.

Senator AKAKA. Is there anything you are aware of in your background which might present a conflict of interest with the duties

of the office to which you have been nominated?

Ms. JAMES. No.

Senator AKAKA. Do you know of any reason, personal or otherwise, that would in any way prevent you from fully and honorably

discharging the responsibility of the office to which you have been

nominated?

Ms. JAMES. No.

Senator AKAKA. Do you agree without reservation to respond to

any reasonable summons to appear and testify before any duly-constituted Committee of Congress, if you are confirmed?

Ms. JAMES. Yes, I do.

Senator AKAKA. Thank you very much. You may proceed.

TESTIMONY OF KAY COLES JAMES1 TO BE DIRECTOR OF THE

OFFICE OF PERSONNEL MANAGEMENT

Ms. JAMES. I am deeply grateful to President Bush for nominating me to this position. I think it is one of the best jobs in

Washington at one of the best times, because of the issues before

the agency. It is not entirely coincidental that it was human resources management that first brought me to Washington nearly

20 years ago, and it is that same subject that brings me back

today.

Whether it is in the corporate world or in the public sector, I

firmly believe that the quality of an organization’s employees is the

singlemost important factor in determining its success and effectiveness. So questions of recruitment, retention, and fair treatment

of Federal employees are as integral to our Nation as any national

security or economic discussion. The opportunity to address and

positively impact these issues at a very exciting time is why I am

so grateful and so enthusiastic to be considered for this position.

One of the most important lessons that I have learned throughout my career corrects the misperception that some people have

about government service. The vast majority of career employees

are true public servants—talented individuals who have consciously chosen to use their work and skills on behalf of the Nation,

often at financial or other sacrifices to themselves and to their families. If confirmed, I will have the privilege of assuming a position

once held by Theodore Roosevelt.

I think the simplest explanation of OPM’s mission can be found

in the first annual message he sent to Congress as President,

where he stated, ‘‘The National Government should demand the

highest quality of service from its employees, and in return it

should be a good employer.’’ Demanding the highest quality of service requires several things: Aggressively recruiting the best and

brightest in the Nation; continuing efforts to expedite and streamVerDate 11-MAY-2000 11:55 Oct 17, 2001 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6601 74452.TXT SAFFAIRS PsN: SAFFAIRS
14

line the hiring process; and encouraging an attitude that recognizes

that people are the owners of government and that we owe them

courteousness, promptness and thoroughness in our dealings with

them. Finally, it means developing and adhering to a true system

of merit for the purpose of retention and promotion.

The second part of Roosevelt’s message speaks even more clearly

of OPM’s mission: ‘‘To ensure that the Federal Government is a

good employer.’’ I know that President Bush and the Members of

this Committee want even more of the Federal Government. It

should be among the best employers in the world. The depth of this

commitment is the measure of how we earn the loyalty and the respect of our Federal workforce. We do this by respecting the promises made to retired Federal employees, protecting their benefits,

honoring their service, and responding to their needs with as little

red tape as possible.

To our current employees, we must protect the security, quality

and cost of their choices in health-care, life insurance and other

benefits. We must continue to provide benefits that meet the needs

of our day, like long-term care insurance and flexibility in making

retirement decisions. We can also set a tone and an example of inclusiveness, fairness and openness to new ideas. The notion that

labor and management must oppose, outsmart, defeat or ignore

each other has no place in the modern workforce.

It is my hope and experience that everyone comes to the table

with the same goal: To help make the government, not only more

productive and effective, but also the best possible employer it

might be. Though I am only beginning to develop goals for my tenure at OPM, if confirmed by the Senate, I am committed to meeting with the various stakeholders and staff and hearing their concerns before developing these further. One commitment I can make

now is that I will be dedicated to restoring the image long associated with public service, namely that it is a noble and rewarding

profession.

I am grateful for the suggestions, support, encouragement that I

have already received from union and management officials, researchers, former OPM directors and members of Congress. The

staff at OPM has already impressed me as some of the finest professionals within the government, and I am particularly appreciative of the excellent job Steve Cohen has done as acting director.

I look forward to getting to know more of these employees in the

months to come.

Thank you for this opportunity, and I would be pleased to answer

any questions that you might have. Mr. Chairman, I had a slightly

longer statement, and I would ask that that statement be entered

into the record.

Senator AKAKA. Thank you very much, Ms. James. Your full

statement will be included in the record. The Committee has some

questions to ask, and let me begin. My colleagues today have

touched on the challenges facing this administration and Congress

in addressing the government-wide human capital crisis. I have

been pleased to work with them and look forward to a continued

partnership. We are examining a wide range of management issues

within the context of hearings and GAO reviews. I plan to hold

hearings on Federal pay and compensation to see how these issues

15

impact the government’s ability to recruit and retain the right mix

of employees.

One of my concerns is how will we attract young people to enter

the Federal workforce when agencies are being asked to open up

an additional 425,000 Federal Government jobs to private contractors.

Yesterday’s ‘‘Federal Diary’’ in the Washington Post noted that a

survey of Federal employees by the MSPB found that only 52 percent of those responding would recommend the government as a

place to work. This number was down from 57 percent in 1996. I

feel both numbers are unacceptable. Employees are caught between

downsizing and outsourcing of government services. Agencies are

forced to work with flattened budgets. I wonder how many young,

qualified people who once viewed Federal employment as a means

of serving the public are now choosing to go elsewhere.

I think the uncertainty and instability of Federal Government

jobs and the lack of competitive pay are contributing factors. My

question is what do you intend to do to ease the fears of current

and prospective Federal employees to show that the government

can compete with the private and public sectors to retain and recruit highly-qualified individuals to serve the American taxpayers?

Ms. JAMES. Thank you, Mr. Chairman. First of all, I agree with

you. One of the things that makes this job so challenging and exciting is that it is a particular point in our history where we have to

do and, I think, can do several things. First, I believe that it is absolutely essential that we raise the image of the public servant,

and I think, when you are trying to attract someone, whether they

are right out of college, whether they are coming out of graduate

school, whether they are a midcareer person who is considering a

career change—I want at the top of their list a consideration for

coming in and serving in some area of the Federal Government,

and using their expertise to serve their Nation.

I think another thing that we can do is to make sure that we

show aggressive leadership in looking at some options for our agency directors and their heads, so that they can use the flexibilities

that they already have to attract new people coming in. I think we

have to be aggressive in our recruiting to make sure that we get

the best and brightest, and that it is purely merit-based, so that

we can attract those kinds of individuals to come in to Federal

service.

I do believe that it is important for OPM in its function as a consultant to all Federal agencies, to help them think creatively and

innovatively about how they can do that. I think that there are

some very simple things that we can do and I am aware that the

agency is already considering and has done, in terms of our advertising, in terms of our affirmatively going out and marketing and

recruiting individuals to come into Federal service.

I also think it is important to realize that while privatizing or

considering privatizing or contracting services, that that necessarily does not need to mean that we are going to lose the best

and the brightest. If we create the kind of workforce that I know

you and other Members of this Committee envision, I think the

Federal workforce is going to be one of the most exciting places to

16

be, and we will not have any problem attracting people to want to

come work for their government.

Senator AKAKA. Well, I am so pleased to hear that you believe

OPM has an opportunity to be a model of what affirmative recruitment and access can mean in the workplace. Would you share with

us in more detail what you mean by that?

Ms. JAMES. Well, certainly. I think one of the hallmarks of Federal service, the Civil Service, is that it is merit-based and that

nothing else should come into play when being considered for either hiring or promotion—it should be purely based on their ability

to do the job, not based on race, sex, sexual orientation or anything

other than their ability to get the job done. When we are going out

to attract the best and the brightest to come in and serve our country, I think that is what we ought to be looking for: Highly-skilled,

highly-motivated, and highly-qualified people.

By setting the right tone, I believe, in the Federal Government,

we can attract those kinds of people, and I think OPM can model

what that looks like.

Senator AKAKA. Let’s talk a moment about how the government

can best compete with the private sector for skilled employees. We

know that, for 17 of the past 20 years, military and civilian pay increases have been identical. The fiscal year 2002 budget resolution

includes a sense of the Congress that rates of compensation for civilian employees should be adjusted at the same time and in the

same proportion as the rates of compensation for members of the

uniformed services.

Do you support pay parity for civilian and military employees,

and how would you address the competitive pay gap that exists in

the Federal Government?

Ms. JAMES. First of all, I support the President’s budget, and in

that budget, he has recommended certain pay increases for both

the military and for the civilian workforce. I trust the military to

advocate on behalf of the people who serve our Nation there, and

I know that my job will be to advocate on behalf of the civil servants of this Nation, to make sure that our salaries are competitive,

and I am not sure in every case that they are, and I look forward

to looking into this more once on the job and understanding the rationale behind the decision-making process and how we came to

where we are today.

But I know this: That to be competitive and to attract the best

and brightest, we have to be competitive in the salary area.

Senator AKAKA. Thank you for that response. One area of great

concern is pay compression among our senior executive ranks.

Members of the SES provide the leadership to develop policy and

carry out agency missions. These men and women manage agencies

that dwarf the largest of our corporations and civic institutions.

The GAO estimates that 71 percent of the current SES members

will be eligible for regular retirement in 5 years.

SES members are faced with artificial caps on pay that have resulted in pay compression for most of their careers. We now have

a situation where executives at a high level of government service

receive the same pay, regardless of their pay level or their job responsibilities. My question is do you support legislation to lift the

pay cap so that pay compression can be alleviated?

17

Ms. JAMES. I am not prepared to address any particular piece of

legislation, Mr. Chairman, but I will tell you this, that I do recognize that the pay compression issue is a very serious one, and it

really does impact our ability to attract the best and the brightest,

and that there are some serious inequities there, and that I would

have it as one of my top priorities, to look at this particular issue,

to make sure that we can be competitive with the private sector in

attracting senior management into the Federal Government service.

Senator AKAKA. As you know, the Federal Government is highly

unionized. Over 65 percent of eligible employees are represented by

labor unions and covered by collective bargaining agreements. In

such an environment, what is the proper role of OPM with respect

to working with Federal unions on important workplace issues?

Ms. JAMES. I think that unions have a key and very major role

to play. I have already expressed that to them privately and I am

happy to do it publicly. They are stakeholders and they represent

the workforce. We share many common goals and things that we

want to see happen within the Federal Government and on behalf

of civil servants. We will not always agree, but we will always disagree respectfully, and they will always have a seat at the table

in the decision-making process.

Senator AKAKA. Thank you very much for your responses, Ms.

James, and I would like to now yield to my colleague, Senator

Cochran.

Senator COCHRAN. Thank you very much, Mr. Chairman.

Ms. James, I know you realize that in the private sector there

have been some very successful experiments with building morale

and keeping good employees, by having such innovative practices

as cafeteria-style benefit plans, where employees select from an

array of benefits what would be more suitable to their own personal situations—what they would find more attractive. Do you

think the Federal Government can learn and borrow from the private sector some of these ideas? If so, do you think enough has

been done in this area to try to make available more flexible benefit programs for employees in the Federal Government?

Ms. JAMES. Certainly. I always believed that we can learn from

the private sector, and I hope, in the very near future, the private

sector will be looking to the Federal Government to see what they

can learn from us, out of our creativity and innovation. In terms

of cafeteria benefits, I think what is most important, before having

done an in-depth study of that and looking at the issue, is to affirm

that Federal employees need flexibility, they need choice, they need

options, and that has always been the hallmark of the Federal benefit program, and I think that needs to continue to be the case.

In terms of whether or not we offer something called cafeteria

benefits or something like that, I think that is a question still to

be considered and one that we need to get the stakeholders to the

table and look at and talk about, with Federal employees always

at the center of the discussion and what benefits them the most.

Senator COCHRAN. When we are able to recruit very talented and

bright workers into the Federal workforce, sometimes they get frustrated when they find that they are up against ceilings. We have

heard of the glass ceiling, in the case of women employees. We

18

have heard of other ceilings; that the slowdown in the view of some

of these talented workers, that they have to wait their turn before

they can have an opportunity to move up the ladder and reach the

potential that they think they are due or that they are entitled to,

because of their hard work and achievement.

Do you think there is a way to improve opportunities for the best

and the brightest who do choose to come into Federal Government

service, and can they be rewarded in this system for their talent,

for their hard work, commensurate with the contributions that they

are making to the job?

Ms. JAMES. I think it is absolutely imperative that we look for

creative ways of doing just that, while at the same time balancing

one of the core missions of OPM, which is protecting the merit system, to make sure that it is done fairly and equitably and to protect employees. We can, at the same time, acknowledge creativity,

acknowledge hard work, acknowledge someone who is doing an excellent job, and make sure that it is done fairly and equitably. I believe that is one of the missions of OPM, to try to figure out how

to give that flexibility to the agencies, but, at the same time, to

protect the integrity of our merit system.

Senator COCHRAN. I think it is clear to me that you have the

background and experience in the State of Virginia Government

service that you have already demonstrated an ability to do, and

those who have worked with you and have observed you over the

years, that you are an outstanding choice for this job, and I wish

you well and hope that you have a very satisfying and enjoyable

period of service as director of Office of Personnel Management.

Ms. JAMES. Thank you, Senator.

Senator AKAKA. Thank you very much.

Senator Voinovich, any questions?

Senator VOINOVICH. Ms. James, as you know, I presented a study

to President Bush entitled, ‘‘Report To the President: The Crisis in

Human Capital.’’ Subsequent to that, GAO Comptroller General

David Walker has designated the human capital crisis as a highrisk area. Have you had a chance to familiarize yourself with my

report or with Mr. Walker’s report?

Ms. JAMES. Yes, Senator.

Senator VOINOVICH. Have you had a chance to talk to Mr. Walker?

Ms. JAMES. I have.

Senator VOINOVICH. I am not going to ask you to get into details,

but assuming that things work out the way we hope they do, I

would really like your thoughts, best thoughts, on how you would

go about responding to that report I gave to the President, and Mr.

Walker’s designation of high-risk. You are going to have to be very,

very aggressive to get your job done. You are going to have to be

a real advocate, frankly, for things that have been neglected for a

long time—this concept of Federal workers as second-class citizens,

let’s get rid of them, that they are costs to be cut instead of assets

to be valued—we need a whole new attitude if we are going to keep

the people that work in the Federal Government today and attract

new people.

I just met with one of the deans at the Harvard John F. Kennedy

School, and today about 40 percent of the young men and women

19

go on into government. Ten years ago, it was 75 to 80 percent. The

Maxwell School at Syracuse, where Sean O’Keefe was a professor,

is similar.

We have a major challenge ahead of us, and you are going to

have some tough decisions to make. One of them deals with something I alluded to earlier, and then Senator Akaka mentioned it

again, and that is the pay compression that we have in the Senior

Executive Service. The problem, basically, is that Congress has

said the SES cannot get a pay increase unless our salaries go up.

Do you think that is a good policy and what would your position

be in regard to it?

Ms. JAMES. Does this include Senate salaries?

Senator VOINOVICH. Yes. That is right.

Ms. JAMES. Thank you for that question, Senator Voinovich. Senator, I really do not—your question, I think, goes to whether or not

it should be tied to congressional salaries. I do not know the reason

why it is. If there is a logical reason why that is the case, then perhaps. However, I do know this: That in just my quick review of

this, as I have been preparing for these hearings, I was alarmed

at the numbers that you quoted this afternoon, about the Senior

Executive Service.

I intend very quickly to bring in some of the management associations for the SES and have them sit down with me to look at

this, to talk about what we can do. I do know that if this issue is

not addressed, we will continue to have a drain of some of the most

important and valuable assets that this government has, and so we

have to look at some creative ways to do that. But the specific

question about whether or not it should be tied to congressional

salaries, I am not sure what the rationale behind that was. So I

am not sure I can answer.

Senator VOINOVICH. Well, if it is illogical and defies common

sense, will you have the courage to say we ought to change it?

Ms. JAMES. Senator, I have never been known for being lacking

the courage to say what I think.

Senator VOINOVICH. Good. I am glad to hear that. One of the

problems that we have in the Federal Government is the overly bureaucratic hiring process. Last week, and this might interest Senator Akaka and Senator Cochran, I had a meeting at Wright Patterson Air Force Base, and I brought in six young men and women

who were in college, and asked them whether or not they were interested in going into the Federal Government, and if they were,

why, and if they were not, why not.

We had the colonel who manages the research lab at Wright Patterson, probably one of the best in the country, probably in the

world. One of the young men was an electrical engineer, and the

colonel told him about the opportunities that were available. He

said, ‘‘Young man, we have a co-op program, and I will hire you

right away.’’ I looked at the colonel and I said, ‘‘Are you serious?’’ He said, ‘‘Yes, I will offer him a job.’’ I said, ‘‘Well, how long will

it take before you get approval to put him on the payroll?’’

Six months. He has to go through some personnel office in Texas

and fill out all kinds of paperwork. I thought that was just incredible, and one of the things that I think we need to do is reform the

hiring process and make it more flexible.

20

For example, at GAO, they have more flexibility. At the FAA,

they have more flexibility. Senator Akaka, we ought to have a

hearing and bring in those agencies to see if those flexibilities that

they have been given will make a difference. But I would be interested, did you have any experience at all with this issue in the

past?

Ms. JAMES. Well, Senator, let’s just say I have a great deal of experience right now about how long it takes to get into a Federal

job.

Senator VOINOVICH. We promise to fix that, not for this administration, but for the next.

Ms. JAMES. But that aside, I do believe that it is important to

give the flexibilities to the agencies that they can have, to respond

to a very fast-paced world out there, where the best and brightest

are not going to sit around for 6 months and wait for a return

phone call to find out whether or not they have a job. We have got

to do better, and I think that is something we can look at early,

look at quickly.

I want to see what we can do right now within the parameters

of the organization as it exists today. If we need new technologies,

if we need new systems, if we need new policies, then we are going

to get them, because it is—to be a highly-competitive employer, you

cannot take 6 months from the time a decision is made to bring

someone on the payroll. That is unacceptable.

Senator VOINOVICH. So in the event that it appeared you could

speed up the process by decentralizing, you would give consideration to doing that?

Ms. JAMES. Yes, I would.

Senator VOINOVICH. Thank you.

Senator AKAKA. Thank you very much, Senator. We have gone

through one round of questions, and I would like to go into the second round. I have a few questions.

The President’s fiscal year 2002 budget proposal would end required coverage of contraceptives by health insurance plans participating in the Federal Employee Health Benefit Program. Although

the rationale for ending the coverage was not explained, there is

little evidence that required coverage of contraceptives in the program imposes any additional premium costs, and Justice Lawrence,

a Federal judge in Seattle, ruled that not extending this right:

‘‘Creates a gaping hole in coverage offered to female employees.’’

The question is do you support rescinding the contraceptive coverage mandate for Federal employees, and if so, what reason?

Ms. JAMES. Mr. Chairman, I do support the President and his

budget process. As I said to the staff earlier, I am not entirely sure

what the rationale or the decision-making process was behind that.

I certainly am not opposed to contraceptive coverage for Federal

employees. I think it is offered in a majority of the health plans.

It is available if someone wants to choose a plan that has that.

I think one of the hallmarks of the Federal health plan has always been flexibility and choice options, and those options are still

there for fellow employees.

Senator AKAKA. I am sure you are aware that Blue Cross–Blue

Shield, the largest participating FEHBP carrier, submitted a proposal to OPM during the call letter process, to change its program

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offerings. Can you tell us what is happening, and how the proposal

will affect other participating plans in the program?

Ms. JAMES. Senator, I have not been involved in those proceedings at all. I have not been briefed by OPM staff on the

progress of that particular contract, and so I am afraid I am not

prepared to answer those kinds of questions here today.

Senator AKAKA. A number of groups have raised concerns with

me that Congress should be involved as we move through this process. I strongly believe that OPM must take whatever steps necessary to ensure that choice and competition remain. A question for

the record: Will you please give us your assurance that you will

seek our input and keep us informed as these negotiations proceed?

Ms. JAMES. Mr. Chairman, I will seek your input. I will seek the

input, as well, of those individuals who are stakeholders in this,

and I think it is important to have that kind of input before you

can make a quality decision. So I assure you that you will definitely be involved in, and a part of, that process.

Senator AKAKA. Well, I thank you very much for your responses.

I would like to ask my colleague if he has any questions.

Senator COCHRAN. Mr. Chairman, I have no other questions of

the witness.

Senator AKAKA. Well, I thank my fellow Senators for their participation today. I have no further questions at this time. However,

Members may submit questions in writing to the Committee, and

the Committee would appreciate a timely response to any questions

that we may have for you. The record will remain open for these

questions and for further statements from my colleagues.

Ms. James, there are many people and organizations that look

forward to working with you on the challenges ahead, and the Senate is one of them. I thank you again for being here this afternoon,

for your cooperation with this process and for accepting this nomination to public service.

If there is no further business before the Committee, I will call

for the adjournment. The Committee stands adjourned.

[Whereupon, at 3:42 p.m., the Committee was adjourned.]

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