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ESPRIT DE CORPS: RECRUITING AND RETAINING

AMERICA’S BEST FOR THE FEDERAL CIVIL

SERVICE, H.R. 1601, S. 129, AND H.R. 3737

HEARING

BEFORE THE

SUBCOMMITTEE ON CIVIL SERVICE

AND AGENCY ORGANIZATION

OF THE

COMMITTEE ON GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

ON

H.R. 1601 AND S. 129

TO PROVIDE FOR REFORM RELATING TO FEDERAL EMPLOYMENT, AND

FOR OTHER PURPOSES

AND ON

H.R. 3737

TO INCREASE THE MINIMUM AND MAXIMUM RATES OF BASIC PAY

PAYABLE TO ADMINISTRATIVE LAW JUDGES, AND FOR OTHER PURPOSES

FEBRUARY 11, 2004

Serial No. 108–163

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpo.gov/congress/house

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

TOM DAVIS, Virginia, Chairman

DAN BURTON, Indiana

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

DOUG OSE, California

RON LEWIS, Kentucky

JO ANN DAVIS, Virginia

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

ADAM H. PUTNAM, Florida

EDWARD L. SCHROCK, Virginia

JOHN J. DUNCAN, JR., Tennessee

NATHAN DEAL, Georgia

CANDICE S. MILLER, Michigan

TIM MURPHY, Pennsylvania

MICHAEL R. TURNER, Ohio

JOHN R. CARTER, Texas

MARSHA BLACKBURN, Tennessee

——— ———

——— ———

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

CHRIS VAN HOLLEN, Maryland

LINDA T. SANCHEZ, California

C.A. ‘‘DUTCH’’ RUPPERSBERGER, Maryland

ELEANOR HOLMES NORTON, District of

Columbia

JIM COOPER, Tennessee

——— ———

———

BERNARD SANDERS, Vermont

(Independent)

MELISSA WOJCIAK, Staff Director

DAVID MARIN, Deputy Staff Director/Communications Director

ROB BORDEN, Parliamentarian

TERESA AUSTIN, Chief Clerk

PHIL BARNETT, Minority Chief of Staff/Chief Counsel

SUBCOMMITTEE ON CIVIL SERVICE AND AGENCY ORGANIZATION

JO ANN DAVIS, Virginia, Chairwoman

TIM MURPHY, Pennsylvania

JOHN L. MICA, Florida

MARK E. SOUDER, Indiana

ADAH H. PUTNAM, Florida

NATHAN DEAL, Georgia

MARSHA BLACKBURN, Tennessee

DANNY K. DAVIS, Illinois

MAJOR R. OWENS, New York

CHRIS VAN HOLLEN, Maryland

ELEANOR HOLMES NORTON, District of

Columbia

JIM COOPER, Tennessee

EX OFFICIO

TOM DAVIS, Virginia HENRY A. WAXMAN, California

RON MARTINSON, Staff Director

CHRIS BARKLEY, Professional Staff Member

REID VOSS, Clerk

TANIA SHAND, Minority Professional Staff Member

(III)

C O N T E N T S

Page

Hearing held on February 11, 2004 ....................................................................... 1

Texts of:

H.R. 1601 ................................................................................................... 5

H.R. 3737 ................................................................................................... 39

S. 129 .......................................................................................................... 42

Statement of:

Dugan, Kevin, vice president, Association for Administrative Law Judges;

John Gage, national president, American Federation of Government

Employees; Colleen M. Kelley, national president, National Treasury

Employees Union; and Carl DeMaio, president, the Performance Institute ................................................................................................................. 117

Sanders, Ronald P., Associate Director for Strategic Human Resources

Policy, Office of Personnel Management ..................................................... 101

Letters, statements, etc., submitted for the record by:

Davis, Hon. Danny K., a Representative in Congress from the State

of Illinois, prepared statement of ................................................................ 98

Davis, Hon. Jo Ann, a Representative in Congress from the State of

Virginia, prepared statement of ................................................................... 3

DeMaio, Carl, president, the Performance Institute, prepared statement

of ..................................................................................................................... 182

Dugan, Kevin, vice president, Association for Administrative Law Judges,

prepared statement of ................................................................................... 119

Gage, John, national president, American Federation of Government Employees, prepared statement of .................................................................... 132

Kelley, Colleen M., national president, National Treasury Employees

Union, prepared statement of ...................................................................... 166

Sanders, Ronald P., Associate Director for Strategic Human Resources

Policy, Office of Personnel Management, prepared statement of ............. 104

(1)

ESPRIT DE CORPS: RECRUITING AND RETAINING AMERICA’S BEST FOR THE FEDERAL

CIVIL SERVICE, H.R. 1601, S. 129, AND H.R.

3737

WEDNESDAY, FEBRUARY 11, 2004

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON CIVIL SERVICE AND AGENCY

ORGANIZATION,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The subcommittee met, pursuant to notice, at 1:03 p.m., in room

2154, Rayburn House Office Building, Hon. Jo Ann Davis of Virginia (chairman of the subcommittee) presiding.

Present: Representatives Jo Ann Davis of Virginia, Norton,

Danny K. Davis of Illinois, and Van Hollen.

Staff present: Ron Martinson, staff director; B. Chad Bungard,

deputy staff director and chief counsel; Chris Barkley, professional

staff member; John Landers, detailee; Reid Voss, clerk; Shannon

Meade, legal intern; Michelle Ash, minority senior legislative counsel; Tania Shand, minority professional staff Member; and Teresa

Coufal, minority assistant clerk.

Ms. DAVIS OF VIRGINIA. The subcommittee on Civil Service and

Agency Organization will come to order.

Again I want to thank you all for joining us here today. We

began the second term of the 108th Congress in much the same

way that we did the first—with an exploration of what steps we

can take to attract, motivate, and train the best qualified workers

for the Federal Government. Last year this subcommittee’s hearing

focused on the broad subject of compensation reform. Today we will

be looking at two specific legislative proposals. These legislative

proposals, if enacted into law, would enhance management flexibilities to attract and retain the best and the brightest across the government and would alleviate the problem of pay compression for

administrative law judges.

Taken together, these two initiatives represent the major point

of our recruitment and retention strategy—to address the very real

pay, benefit, and personnel issues that keep potential employees

from joining the Civil Service and sometimes drive our best employees and managers away.

The first piece of legislation is H.R. 1601, the Federal Workforce

Flexibility Act, which I introduced last year. This bill would do

many things to improve the effectiveness of the Federal Government, including expanding agencies’ abilities to offer recruitment,

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retention, and relocation bonuses, allowing agencies to offer enhanced annual leave benefits to new mid-career hires, emphasizing

training, streamlining, critical pay authority, and making it easier

for agencies to establish personnel demonstration projects.

A companion bill, Senate bill 129, has made its way through the

Senate Governmental Affairs Committee with some changes.

The second bill is H.R. 3737, the Administrative Law Judges Pay

Reform Act, which I introduced earlier this year. This legislation

addresses the large problem of pay compression among administrative law judges. The 1,400 ALJs across the government are responsible for hearing disputes over their agencies’ decisions. Most of

them work at the Social Security Administration, where they make

judgments on citizens’ appeals. They play a crucial role. Pay compression caused by a statutory cap on ALJ salaries is especially

worrisome in high-cost areas such as Boston, Chicago, Los Angeles,

New York, and San Francisco. This problem threatens the ability

to hire and retain an appropriate number of administrative law

judges. Until recently, members of the Senior Executive Service

were subject to the same cap, but that problem was remedied for

the SES last year. That legislation, however, failed to address the

ALJ situation.

I want to again thank our witnesses for being here today, and

I look forward to hearing your thoughts on these pieces of legislation.

I’m going to give my ranking minority member here a chance to

get his breath, and then I am going to recognize him to see if he

has any comments.

[The prepared statement of Hon. Jo Ann Davis, and the texts of

H.R. 1601, H.R. 3737, and S. 129 follow:]

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Mr. DAVIS OF ILLINOIS. Thank you very much, Madam Chairwoman. I’m pleased to join with you in convening this hearing and

in welcoming our witnesses today.

Given the increased demand by Federal agencies and some Members of Congress for human capital flexibilities in the Civil Service

system, I’m not surprised that the first hearing of this session is

to consider legislation that would give Federal agencies flexibilities

for recruitment and retention bonuses, relocation allowances, personnel management demonstration projects, training, and direct

hire authority.

This hearing is timely. Last week we began to see the results of

granting Federal agencies human capital flexibilities that do not

address the problems the flexibilities portend to correct. Federal

Aviation Administration received exemptions from Title 5 in 1995

so it could establish its own personnel system. Though the 1995

legislation initially exempted FAA from Chapter 71 of Title 5,

which sets forth the rules for collective bargaining and labor/management relations, in 1995 Congress restored FAA’s coverage under

Chapter 71.

For reasons my staff is researching and trying to comprehend,

Congress has also created a separate bargaining procedure whereby if the FAA labor and management reach an impasse in their negotiations, matters being negotiated must be transmitted to Congress for a final determination. Last month the FAA transmitted

their unresolved labor/management issues to Congress. If Congress

does not act within 60 days, management’s proposal for its personnel system is implemented. Members of Congress and staff must

get into the minutia of the labor/management agreement and do so

within 60 days or management automatically gets what it wants.

This process clearly creates more problems than it solves.

Last year congressional Democrats and employee organizations

saw the wolf in sheep’s clothing and fought the human capital provisions in the Department of Defense reauthorization bill, but to no

avail. Last week DOD briefed our staff on the draft proposal for its

new personnel system. It was an outrage. Under the draft proposal,

DOD employees could still join unions, but under a new fee-forservice arrangement. Employees would pay a fee to contract with

Union representation. DOD argued it needed broad exemptions

from existing personnel laws for national security reasons. What

impact do union dues have on national security?

The proposal also calls for excluding additional groups of employees from collective bargaining. No reasonable explanation was

given for the exclusions.

Granting Federal agencies flexibilities that do not address well

documented problems are not clear solutions to these problems and

a disservice to Federal employees and the taxpayers. We can and

should do better by Federal employees who have devoted their lives

to serving the American public.

Again, Madam Chairwoman, I thank you for holding this hearing

and look forward to the testimony of our witnesses.

[The prepared statement of Hon. Danny K. Davis follows:]

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Ms. DAVIS OF VIRGINIA. Thank you, Mr. Davis. It is always a

pleasure to have you here as our ranking minority member, and

you always bring so much to the table.

I would like to ask Ms. Norton if you have an opening statement.

Ms. NORTON. Thank you very much, Madam Chairwoman. I appreciate the bipartisan way in which you have worked with us on

this committee. When I saw the name of this hearing, I am sure

we—and, indeed, I’m sure that it is your intent that we deal with

a major problem in the Federal work force. As it says, ‘‘Esprit de

Corps: Recruiting and Retaining America’s Best Civil Service,‘‘ yet

when I came to the hearing and saw people lined outside, Madam

Chairwoman, I wondered if we were giving away money the way

you see people lined outside the Appropriations Committee. No, we

are not giving away money. It looks like the administration is taking away rights. And the walls are lined, as well they should be.

We had a very troublesome full committee set of events on both

DOD and the new Homeland Security Committee, and it looks like

we are in for another set of troublesome hearings. I don’t stoop to

the pejorative very often, but the notion of saying to a union that

it has to receive the votes of ‘‘X’’ number—in this case 50 percent—

in order to qualify to represent workers must be unprecedented in

the history of labor/management relations in the United States of

America.

I recognize that this is only a proposal, but I think we ought to

send a shot across the bow back from where this proposal came

that it is high time to sit down with the people who represent the

people who work for the Federal Government and try to get proposals that have some bipartisan content before you make your way

to the Congress. I haven’t seen the proposal, but it has already

been leaked and aired in the paper and the workers know about

the proposal and are absolutely outraged at the proposal, and I just

hope that as we now are in the beginning of a new hearing year

that we can dispose of matters like this by sending them home and

telling them to try again.

Thank you very much, Madam Chairwoman.

Ms. DAVIS OF VIRGINIA. Thank you, Ms. Norton.

I ask unanimous consent that all Members have 5 legislative

days to submit written statements and questions for the hearing

record, and that any answers to written questions provided by the

witnesses also be included in the record.

Without objection, it is so ordered.

I ask unanimous consent that all exhibits, documents, and other

materials referred to by Members and the witnesses may be included in the hearing record, and that all Members be permitted

to revise and extend their remarks.

Without objection, it is so ordered.

On the first panel we are going to hear from Mr. Ronald Sanders,

Associate Director for Strategic Resources Policy at the Office of

Personnel Management.

It is standard practice for this committee to administer the oath

to all witnesses. If all the witnesses could please stand, I will administer the oath. I’m going to go ahead and do it for both panels

so that we can just take care of it all at one time.

Raise your right hands.

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[Witnesses sworn.]

Ms. DAVIS OF VIRGINIA. Let the record reflect that the witnesses

have answered in the affirmative.

You may be seated.

Mr. Sanders, we have your written testimony in the record, and

I will ask you if you’d like to summarize it. We will recognize you

for 5 minutes.

STATEMENT OF RONALD P. SANDERS, ASSOCIATE DIRECTOR

FOR STRATEGIC HUMAN RESOURCES POLICY, OFFICE OF

PERSONNEL MANAGEMENT

Mr. SANDERS. Yes, ma’am. Thank you. Madam Chairwoman, I

appreciate the opportunity to appear before you today to address

H.R. 1601, the Federal Workforce Flexibility Act of 2004. It has

also been introduced in the Senate, with certain differences that I

will address, as S. 129. I will also speak to H.R. 3737, the Administrative Law Judges Pay Reform Act.

I propose to discuss each of the specific provisions of these bills,

providing OPM’s views on each. I’ll begin with those that are common to the House and Senate bills, address those that are unique,

and then treat H.R. 3737 last.

Both House and Senate versions of the bill provide Federal agencies additional flexibility in offering financial incentives to recruit,

retain, and relocate top talent. We strongly support these flexibilities. By allowing agencies to pay larger incentives and to provide

them in different ways—for example, in lump sums or installments—the proposed legislation would materially improve our ability to compete for the best and brightest, one of Director James’ top

priorities. In fact, she specifically mentioned the use of incentives

in this regard as part of her top 10 list of things agencies can do

to improve hiring issued just yesterday.

Except for its extension of these authorities to political appointees, we would prefer the House version of the bill, which simply replaces existing flexibilities with new ones without adding any

new reporting requirements. OPM strongly supports most other

provisions that are common to both House and Senate versions of

the bill. Both bills would provide OPM with the responsibility for

granting and reporting individual agency requests for critical pay

for their superstars. The bills also establish a higher annual leave

accrual rate for senior executives and professionals, and allow

agencies to credit non-Federal work experience to establish a higher annual leave accrual rate for new mid-career entrants.

Finally, both bills would eliminate potentially anomalous annuity

computations that disadvantage employees when part-time service

is involved.

However, we do not believe it necessary at this time for the bill

to require that agencies establish and appoint a training officer, especially since the Chief Human Capital Officers Act of 2002 is relatively new. According to that act, training and development are

among a Chief Human Capital Officer’s principal responsibilities,

and on the merits we believe that that is exactly right. That’s the

only way to achieve an integrated approach to strategic management of an agency’s human capital, and CHCOs should be given

time to tackle this very important issue.

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The House includes a number of very complicated technical provisions that would correct anomalies that have resulted from the

implementation of locality pay under the Federal Employees Pay

Comparability Act. These anomalies have to do with complex interrelationships between locality pay and special rates—that’s an

under-statement—and the impact on pay retention when employees

are covered by one or both. These provisions were in the President’s original Managerial Flexibility Act and we urge their passage. We also thank you for your leadership in continuing to champion them.

The House bill also includes streamlined personnel demonstration project authority. Madam Chairwoman, that authority is fine

as far as it goes. It is based on a strategy for making incremental

improvements in our Civil Service system that can be traced back

to the late 1970’s. While we always appreciate more flexibility to

deal with outmoded personnel rules, a new model has also

emerged. First embodied in the Homeland Security Act and since

continued in DOD’s National Security Personnel System, that

model sets forth the principles and process for modernizing our

Civil Service system without compromising any of the core rights

and protections that make it so great.

Madam Chairwoman, you have been one of the architects of this

new approach, and we thank you for your leadership in that endeavor. We urge you to continue to work with us to explore making

our Civil Service system the best in the world.

The Senate version of the bill would provide Federal employees

with additional compensatory time off for each hour spent in travel

status away from their duty station. We do not support this proposal. At present there are provisions in Title 5 U.S. Code and case

law under the Fair Labor Standards Act to require compensation

for Federal employees in travel status under certain circumstances,

and there is no compelling business case to provide additional compensatory time off in this regard.

We do support the technical amendments to S. 129 that confirm

the longstanding practice of interpreting the term ‘‘military service’’

to include service as a cadet or midshipman at the Air Force,

Army, Coast Guard, and Naval Academies. This practice has been

brought into question by appeals court decisions, and we believe

this legislation is necessary to leave no doubt.

Finally, let me address the stand-alone provisions of H.R. 3737,

which would reform the pay system for administrative law judges

by increasing the minimum and maximum pay rates. The statutory

minimum and maximum rates of basic pay would be linked to the

rates for level III of the executive schedule instead of level IV.

More importantly, the maximum rate of locality adjusted basic pay

would be increased from the rate for level III to the rate for level

II of the executive schedule, which is the rate payable to Federal

district court judges. We oppose this bill.

While the impetus behind this legislation is to provide parity

with the new Senior Executive Service pay for performance system,

comparisons with that new system are just not appropriate. The

new SES system is exclusively performance based. There are no

more automatic or across-the-board increases, and in that light it

would be unfair to do so for ALJs.

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Moreover, while there is compression, there is no compelling evidence of a recruiting or retention problem amongst ALJs sufficient

to warrant such extraordinary treatment.

We sincerely value the contributions of the ALJ corps, but for the

reasons set forth above and in my written statement we must oppose H.R. 3737.

Madam Chairwoman, thank you for the opportunity to testify on

these important matters. I would be happy to answer any questions.

Ms. DAVIS OF VIRGINIA. Thank you, Mr. Sanders. It is always a

pleasure to have you here as one of our witnesses.

[The prepared statement of Mr. Sanders follows:]

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Ms. DAVIS OF VIRGINIA. I’d like to now move to the question and

answer period, and I will yield first to our Civil Service Subcommittee ranking member, Mr. Davis.

Mr. DAVIS OF ILLINOIS. Thank you very much, Madam Chairwoman.

Mr. Sanders, based upon the briefing that DOD has given to us,

it has been pretty clear that there was no real collaboration with

OPM. I didn’t get the impression that there was. As Federal agencies receive more flexibilities from Title 5, how does OPM see itself

maintaining or holding on to some oversight authority or responsibility?

Mr. SANDERS. I think the Congress, Mr. Davis, in both cases—

Homeland Security and DOD—has provided OPM a central and

pivotal role in that regard. I will only hearken back to something

that Mrs. Davis said. This process is just now beginning, and OPM

and DOD have begun their internal collaborations, and then DOD

and OPM will begin their collaborations with labor unions and

other employee organizations, so while this was preliminary and

was briefed as such, I think there is a long way to go.

Mr. DAVIS OF ILLINOIS. I don’t want to appear that I’ve got more

confidence in OPM than I do some of the agencies, but I guess I

really do. I’m wondering, do you think that maybe we need to provide OPM with more authority as a part of its role and mission—

that is, if we are going to be able to comprehensively develop approaches to dealing with the entire Federal system, as opposed to

some agencies operating perhaps one way and other agencies operating another way, which means that employees would not across

the board have the same system that they’re working under.

Mr. SANDERS. I know that Director James takes her responsibility under both the Homeland Security Act and the National Security Personnel System authorizing legislation very seriously. That

role is virtually identical. It provides in both cases for the Cabinet

Secretary and the OPM Director to jointly prescribe the establishing regulations. That’s a pretty important and pretty powerful role

and, as I said, I think Director James understands the charge she

has been given both by the President and by the Congress to ensure that those rights that are enumerated in both pieces of legislation are protected and preserved, at the same time ensuring and

affording those agencies the flexibility they need to deal with their

particular missions. It is that balance that I think OPM has been

charged with striking, and I think the role that the statute provides for the Director strikes that right balance.

Mr. DAVIS OF ILLINOIS. In his written testimony Mr. DeMaio,

president of the Performance Institute, suggests that Congress

should wait until the Department of Homeland Security and Department of Defense implement their new systems before granting

Federal agencies additional pay flexibilities. Do you agree or disagree with that? Or do you think that it might be prudent for us

to get a look at what happens? I’ve always been told that seeing

is believing, and that sometimes having experience to base a decision upon—do you think it might be helpful if we were to wait and

see what happens there before moving further ahead?

Mr. SANDERS. That is certainly Congress’ prerogative, but, with

all due respect, I think we have had lots of experience with at least

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various models of, for example, pay reform, and literally about a

quarter century worth, and there has been lots of fine tuning. You

mentioned FAA. There are a number of other agencies that have

been experimenting with this, that have been perfecting this, and

to the extent that those two efforts build on that experience—and

I believe they have and will—then I’m not sure that it is necessary

to wait to simply add more to what we already know. I think we

have known now for some time that the General Schedule needs

to be reformed.

Mr. DAVIS OF ILLINOIS. Ms. Norton mentioned in her opening

statement the fact that there were so many people here, and more

than we are accustomed to seeing. What do you attribute this to,

or would you attribute anything about this particular hearing and

the numbers of people that have expressed an interest?

Mr. SANDERS. I know this is AFGE’s annual legislative conference, so I suspect they are in town and want to see our congressional process at work.

Mr. DAVIS OF ILLINOIS. Thank you very much. [Laughter.]

Ms. DAVIS OF VIRGINIA. We will have order, please.

Mr. DAVIS OF ILLINOIS. Thank you very much, Madam Chairwoman. Thank you, Mr. Sanders.

Ms. DAVIS OF VIRGINIA. Thank you, Mr. Davis.

I would like to remind the Members and the witnesses, that this

hearing is on H.R. 1601 and H.R. 3737, which actually has nothing

to do, as such, with pay for performance. It is looking at ways to

recruit and retain.

Mr. Sanders, in that regard, how many recruitment, retention,

and relocation bonuses are paid per year under current law? Do

you have any idea?

Mr. SANDERS. I don’t have that number off the top of my head.

We can provide it for the record.

I can tell you that it is not many. For a variety of reasons—and

I think generally good ones—they are used sparingly. There are

funding constraints, but I think that is generally a good thing because when they are used they are used for critical purposes. I’ve

had experience in a couple of agencies where we’ve used them,

where we have managed to find the money because the job or the

individual was that important to us, and I think the situation the

way it exists today with these added flexibilities would provide just

the right tools we need to compete.

Ms. DAVIS OF VIRGINIA. Do you believe that we will see expanded

use of recruitment, retention, and relocation bonuses under the

new authority that is in H.R. 1601 and if funding may be a major

obstacle? Do you think it would be used? And do you think it is

necessary to recruit and retain?

Mr. SANDERS. I think it is necessary. I think it will be used.

Again, I don’t think it is going to be used so much in such a widespread way that someone would suggest abuse. Again, where there

is a will there is a way, and when the job is important enough and

the individual is talented enough to recruit, retain, or relocate,

these incentives have been used. I think what this bill will do is

provide a lot more room for creativity in their use.

Let me underscore one thing. As the Congress has done in the

bill, there is a service payback commitment, so the Government is

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going to get a return on that investment, either through the individual’s service, or if the individual leaves prematurely under certain circumstances, through a payback requirement. So I think that

is the right balance there, as well.

Ms. DAVIS OF VIRGINIA. How does OPM view the merits of the

payment of bonuses as opposed to increasing the pay grade?

Mr. SANDERS. I think the two have to be looked at together, because increases in grade or permanent promotions or pay adjustments to base salary are permanent. I mean, the typical strategy

is to reward high performance with a bonus 1, 2, or 3 years until

it is clear that the individual is going to sustain that high level,

and then award that individual a base pay adjustment—I think

that’s the way it has worked for many years—so that we can, in

fact, recognize high performers for one-time acts and over a sustained period. I think that combination will work very well.

Ms. DAVIS OF VIRGINIA. So OPM prefers the bonuses as opposed

to raising the scale, pay grade?

Mr. SANDERS. I think certainly the flexibilities here will help

complement base pay adjustments, as opposed to sort of playing

games with the classification process and raising grades artificially.

This certainly would be preferable.

Ms. DAVIS OF VIRGINIA. I think I’ve got another minute or two.

Let me go to—I heard you say in Senate bill S. 129 that OPM opposes the amendment that they put in there with regard to compensation for travel. I’m not so sure I’m in agreement with OPM

on this one. It sounds like a good proposal to me. It is my understanding that if an employee were to be able to get compensated

for traveling early in the morning for that time for travel, that

maybe they would not then go the night before and incur hotel

costs, meals, etc. So why would it not be better to give them time

off for having to leave early in the morning and go? I’m just trying

to see why you oppose it.

Mr. SANDERS. Madam Chairwoman, let me say this. This issue

has recently been raised with Director James. She’s willing to take

a fresh look, and in so doing she is going to reach out to all of the

interested stakeholders, including this subcommittee, so stay

tuned.

Ms. DAVIS OF VIRGINIA. If you could ask her to take a close look

at it and just get back to me with exactly why you would oppose

it, because just at first glance it sounds like a reasonable amendment to me and I tend to agree with it.

I am going to yield now to Ms. Norton.

Ms. NORTON. Thank you, Madam Chairwoman.

I have a question on the ALJs. I’m really trying to understand

the role of OPM since the restructuring of Federal agencies began,

and that is the context in which I look at everything now because

increasingly it sounds to me as though they may be downsizing

agencies in their personnel, but it looks like OPM is being

downsized in its mission.

I would like to know the nature of the collaboration you have

had, very specifically what role you have played in the proposed

DOD proposal—‘‘you’’ meaning OPM.

Mr. SANDERS. As I said, that process is just now beginning. To

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cipally on bringing the Homeland Security system home, which I

believe is imminent. That has absorbed the attentions of my staff

and myself for many, many months, and we are just now beginning

to turn our attention to DOD.

I can tell you that in this bill OPM’s role is pretty clear and pretty firm. In every case, the Congress has authorized the Director to

issue implementing regulations, and in many cases that authority

is very, very broad, and we appreciate that because some of the

problems addressed here are so complex that legislation would be

problematic. So I see nothing in the Workforce Flexibility Act that

diminishes OPM’s role in any way whatsoever.

Ms. NORTON. I appreciate your answer on the Workforce Flexibility Act, but my question was about the DOD proposal, and your answer was that you have been so busy with Homeland Security that

you have had zero role in that proposal. Let me tell you why that—

you know, if you want to revise that answer—you changed the subject from the question I asked. If you want to revise that answer,

I’m pleased to hear it.

Mr. SANDERS. As I said, we——

Ms. NORTON. Did you play any role—were you in any meetings

with the DOD when they prepared the proposal that has been

leaked to the press and that is now in the newspapers?

Mr. SANDERS. We have seen the proposal, yes, ma’am.

Ms. NORTON. You know, I saw it, too, but that was not my question.

Mr. SANDERS. As I indicated——

Ms. NORTON. Let me tell you why I——

Mr. SANDERS [continuing]. We have just now begun——

Ms. NORTON [continuing]. Am asking the question. I’m not trying

to embarrass you. I’m sorry you weren’t in it, frankly. But when

we are restructuring huge parts of the Federal Government, when

we are changing the 100-year-old Civil Service system, I think the

very least the public and the Congress has a right to expect is that

somebody who has been in touch with that system be in on the

ground floor when you change that system. I don’t know how—I

mean, when the Homeland Security Department was set up, they

were given the authority to go out and look for their own buildings.

You know what they did? They quickly came back to the GSA because they said, ‘‘You know, we don’t know anything about finding

space and GSA does,‘‘ and even though we have our own authority

they asked the GSA to help them. Now, the DOD doesn’t know

squat about Civil Service, about what protects Federal workers,

about what the Federal Government is entitled to, and yet without

any experts from the OPM in the room they sit down and they

write a proposal and they say, ‘‘Look, you take a look at this.‘‘ It

seems to me it might have been the other way around. You write

the proposal and you say, ‘‘You take a look at this and adjust this

to your needs.‘‘ If we don’t go on record saying that now, we are

going to have another whole year where agencies write their proposals, strip workers of their rights, come in with asinine proposals

even relating to their own efficiencies, and we’re not going to stand

for it. You know, you’ve done it twice. We’re not going to stand for

it.

[Applause.]

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Ms. DAVIS OF VIRGINIA. I will say once again this is a hearing

and it will be conducted that way. There will be no outbreaks of

applause. Thank you.

Ms. NORTON. Let me ask something about the ALJs. I just think

you ought to carry back to OPM that I am not speaking just for

myself. Let me ask a word about ALJs. I chaired the EOC. I have

the greatest respect for ALJs and what they do. I take it—let me

ask you, do you agree that the ALJ is a judge?

Mr. SANDERS. I think the title is appropriate. It is an administrative law judge. They are different from judges in the judicial

branch of our Government.

Ms. NORTON. Do you care to elaborate on that?

Mr. SANDERS. Administrative law judges do exactly what their

title says they do—they interpret administrative rules and statutes

as part of——

Ms. NORTON. No. I mean the difference is that one interprets administrative rules and statutes and the other interprets law. OK.

But the reason we have a system, a special system for them—and

we do have a special system. Civil servants, of course, can be disciplined in an entirely different way from an ALJ. Everything has

to be on the record. Because, after all, these people handle administrative law decisions in the same way that a district court judge

handles legal decisions. One thing that we’re trying to let everybody—and they’re bringing it all around the world—know is we

have an independent judiciary. One of the ways in which we make

them independent is we do not mess with their pay. I’ll tell you

something. There are some judges whose pay I would like to compress and mess with. But we have an independent system, and so

do we in the administrative system have an independent system.

I want to know how you would reconcile the pay compression

which you concede does exist with ALJs with the notion of an independent judiciary within the administrative process.

Mr. SANDERS. All you’re doing, Ms. Norton, is changing the point

of compression, and in so doing you have created a fundamental

unfairness with the SES pay for performance system and members

of the Senior Executive Service, that system now just being implemented, because what will happen with the ALJ reform bill is that,

with the capping raised to executive level III plus locality pay, the

vast majority of judges will go to the base pay limit of level III,

they’ll get locality pay on top of that, and most of them will move

to level II. They’ll move to level II automatically without any regard to performance or quality or anything else.

Contrast that with the SES pay for performance system. There

are two very difficult steps for members of the Senior Executive

Service to get anywhere near level II. First, agencies have to be

certified as having performance appraisal systems that make

meaningful distinctions. Those are Congress’ words. We are about

to issue the certification criteria. Not every agency is going to be

certified. That is a high bar. And even when agencies pass that bar

it doesn’t mean that every SES member is going to go from level

III to level II. It is only for the few that earn it. It is performance

based, no more automatic, no more across the board. And it is that

fundamental unfairness that I think is the principal opposition to

the ALJ bill, that ALJs will suddenly move to that level without

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any regard to performance, and we’re telling Senior Executive

Service members, ‘‘You can’t, you won’t, you have to earn it.’’

Ms. NORTON. And are you saying you believe that the ALJ system should be performance based in that sense?

Mr. SANDERS. I think there has to be a way to find an analog.

Ms. NORTON. And so what is the—given the independence that

an ALJ needs, what is the appropriate analog? I mean, I’d like to

find a way into the Federal judiciary, as well, but I don’t think I

deserve a way into that through the pay system.

Mr. SANDERS. I don’t know what the analog is at this time. I do

know that independence and performance are not mutually exclusive.

Ms. NORTON. But pay and judicial independence have been exclusive in our independent system.

Let me just—I’m very worried that we will not be able to recruit

ALJs of the quality we have been able to recruit in the past. For

example, in this new bill you assert that you’ve had no problems

recruiting ALJs. In the new Medicare prescription bill that has just

been passed by the Congress, we are informed we will need 350

ALJs simply to adjudicate Medicare benefit appeals. I can tell you,

given this bill, you are going to need a whole lot more ALJs, because you are going to get all kinds of difficulties from this bill.

Are you wiling to sit there this afternoon and tell me you think

that there will be no recruitment problems whatsoever given the

unhappiness of the present roster of ALJs and given the recruitment and retention problems we already have in the Federal Government where you can take that skill and go to the private sector

today and earn often a great deal more money? Are you willing to

say that you are going to have no trouble getting 350 ALJs for the

Medicare prescription drug bill and that the status of ALJs would

have no effect upon retention and maintenance? And let me add,

91 percent of your ALJs are already at retirement age. With that

context, I’d like your answer.

Mr. SANDERS. I am willing to say that, as far as the data has

shown to date, there are no recruiting or retention difficulties.

Ms. NORTON. But, of course, the role of the OPM is to prepare

for recruitment. Recruitment, by definition, means you are looking

into the future in order to be able to draw people in. Let me ask

you then very specifically, you know about the new Medicare prescription drug bill. Have you looked into the question of whether

or not you will be able to recruit ALJs to administer that bill?

Mr. SANDERS. I can tell you that my testimony was circulated to

all agencies, including those that employ ALJs, and they concurred

with the testimony.

Ms. NORTON. With the testimony that what? Answer my question, sir.

Mr. SANDERS. That we oppose the ALJ pay reform bill as it is

currently structured.

Ms. NORTON. You know, I just want to say this. You’re not going

to get away with not answering my questions by answering some

other question. My question again is: has the OPM, whose job is

recruitment and maintenance, looked to see whether or not it will

be able to recruit ALJs knowing that a whole new body of ALJs is

necessary for the prescription drug bill? Have you looked at that

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yet? And I’d like you to answer that question, not some other question that you have decided to answer.

Mr. SANDERS. That is our job, and we have, and we base the conclusion on two pieces of data. One, historically there are no recruiting or retention problems. They, in fact, are less than for the Senior Executive Service. Two, we have to ask the agencies that actually employ ALJs. They are in a far better position than we are to

make those judgments. They, too, have concurred that the way as

it is currently written, the ALJ pay reform bill is not something

that we can support.

Ms. NORTON. That bill was written—I understand my time is up,

Madam Chairwoman—that bill was written before the prescription

drug bill was passed, and I am going to ask you to go back to the

OPM and ask them to do a specific planning and recruitment study

to make sure that, in fact, there are enough ALJs at the HHS to

administer this new bill. Could I get that promise from you?

Mr. SANDERS. If you require us to do that, we will certainly comply.

Ms. NORTON. I’m requiring you to do it, sir.

Ms. DAVIS OF VIRGINIA. If you would take that back to Director

James and ask her to get it back to us, we will make sure that the

members of the committee have the answer to it.

Let me just clarify one thing. You were comparing ALJs to

SESers. The SESers do have performance based but ALJs do not,

correct?

Mr. SANDERS. Yes, ma’am.

Ms. DAVIS OF VIRGINIA. I just wanted to clarify that.

And let me just say one thing, because we tend to keep going to

something other than what is the issue of this hearing today. You

know, any of you who were here when we had—most of you probably were—when we had the hearings on the DOD personnel transformation, many of us, including the Chair, were not happy with

the way the bill came down, and I cannot honestly say I am 100

percent happy with the bill as it passed; however, we will—and I

will tell you, Ms. Norton, that we will do everything in our power

before any other changes are made with our Federal workers, that

we will continue to fight to make sure that it comes to the jurisdiction of this committee and that we have fair and open hearings so

that we know both sides of the issue, and we will do our best to

fight and make sure it is done in a fair manner.

Ms. NORTON. Thank you, Madam Chairwoman.

Ms. DAVIS OF VIRGINIA. Again, I thank you, Mr. Sanders, and I

appreciate your being here today.

With that, we will go to the second panel.

Mr. SANDERS. Thank you.

Ms. DAVIS OF VIRGINIA. I would like to point out, to those of you

who are interested in the DOD personnel transformation, which I

think is probably 99.9 percent of you in the room here, I have spoken to the Secretary of the Navy, Secretary Gordon England, and

he has been charged with working with the unions to make sure

that this transition, this transformation, is done in a way that is

fair and open to the unions, so if he has not been in touch with

you yet, be assured that he will be. He has been appointed as the

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point man by the Secretary of Defense. His name is Gordon England, by the way.

If the second panel will come forward—I’d like to thank our second panel of witnesses. The record will show that I have sworn you

in previously, so we will first hear today an opening statement

from Judge Kevin Dugan, vice president of the Association for Administrative Law Judges.

Judge Dugan, thank you for being here. Again, for all of you we

have your written statements in the record, so I would ask you to

summarize your statements in 5 minutes.

STATEMENTS OF KEVIN DUGAN, VICE PRESIDENT, ASSOCIATION FOR ADMINISTRATIVE LAW JUDGES; JOHN GAGE, NATIONAL PRESIDENT, AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES; COLLEEN M. KELLEY, NATIONAL PRESIDENT, NATIONAL TREASURY EMPLOYEES UNION; AND CARL

DE MAIO, PRESIDENT, THE PERFORMANCE INSTITUTE

Mr. DUGAN. Thank you. Good morning, Chairwoman Davis and

members of the subcommittee. I am Kevin Dugan, Association of

Administrative Law Judges vice president. I currently am an administrative law judge in the Office of Hearing Appeals in Charlotte, NC, with the Social Security Administration.

The Association of Administrative Law Judges represents the

professional interests and concerns of approximately 1,000 administrative law judges in the Social Security Administration and the

Department of Health and Human Services. On behalf of the administrative law judge community and the ALJ-related associations

that join in support of my testimony, let me extend our appreciation, Chairwoman Davis, for today’s hearing and this opportunity

to testify.

My association and all other Federal ALJ groups strongly supports your legislation, H.R. 3737, which would address ALJ pay

compression problems that diminish the capacity of the Federal

Government to recruit and retain the finest candidates and incumbents in the administrative law judiciary. There are approximately

1,300 administrative law judges in 28 Federal agencies and departments. They conduct trial-type hearings for cases brought under

Federal statutes. In fact, the Supreme Court has declared that Federal administrative law judges are functionally similar to Federal

trial judges.

The impact of ALJ decisions is considerable. Their jurisdiction includes a wide range of significant and diverse regulatory matters,

including areas from anti-trust to banking practices to environmental matters, food and drug safety, and so on. These cases may

involve millions or even billions of dollars and have considerable

impact on the national economy.

Equally important, ALJs also adjudicate hundreds of thousands

of individual cases each year that determine personal entitlement

to recompense or benefits. These cases, more personal in nature,

are of considerable and equal importance to the millions of Americans involved. For many, this is the first and only contact they will

have with the adjudicatory authority of the Federal Government.

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lion cases a year. Despite the importance of the administrative

legal system to the American public, a significant problem exists

with ALJ pay. The ALJ pay system was changed in 1991 when the

basic pay levels were tied to specific percentages of executive

schedule level IV. Because of the linkage, administrative law

judges failed to receive annual cost of living adjustments for four

straight years, and ALJ pay fell considerably behind that of other

Federal employees.

Further, we must also recognize that ALJ locality pay is capped

at the pay level for executive level III, impacting many current

ALJs.

A very telling point is that in 1991 entry level pay for an ALJ

was equal to a GS–15, step 5/6. Today that is at a GS–14 step 7/

8 level, a virtual—almost a full grade pay cut. And this does not

even take into account bonuses and awards available to GS employees which properly are not authorized for ALJs.

As a result of these pay compression problems, the Federal Government is at a distinct competitive recruiting disadvantage. It is

well recognized that the pay for Federal administrative law judges

has not kept pace with salaries in the private sector. Now we see

that they have not even kept pace with the Government’s own GS

pay schedule.

The problem has become so extreme that Federal Energy regulatory chairman Pat Wood wrote to President Bush that we are

having difficulty attracting and retaining the high quality of administrative law judges that we need to handle our challenging

case load. That is why we are so pleased to speak on behalf of this

bill. H.R. 3737 would respond to these pay problems by revising the

minimum and maximum levels of pay. You may wish to refer to

Chart B. The availability of locality pay adjustments would also be

assured.

In view of the benefits and reasonableness of this approach, we

urge the subcommittee to approve H.R. 3737.

This concludes my statement. Once again, Madam Chairwoman,

on behalf of the ALJ community we thank you for your continued

interest and support.

Ms. DAVIS OF VIRGINIA. Thank you, Judge. You have my vote.

You did it in less than your 5 minutes.

[The prepared statement of Mr. Dugan follows:]

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Ms. DAVIS OF VIRGINIA. Next we will hear from two of our very

popular today, I believe, employee groups, Mr. John Gage, the national president of the American Federation of Government Employees, and after him will be Ms. Colleen Kelley, national president of the National Treasury Employees Union. As always, it is

a pleasure to have both of you back before this subcommittee.

Mr. Gage, we have your written testimony in the record, so if you

could summarize your testimony in 5 minutes it would be appreciated.

Mr. GAGE. Thank you, Madam Chairwoman. On behalf of the

600,000 Federal employees represented by AFGE, I thank you for

the opportunity to testify today.

In my written statement I have explained our union’s views of

the bills under consideration today. AFGE strongly prefers Senate

bill 129 as marked up because the broad demonstration project authorities that remain in the House bill have been eliminated. I urge

the committee to take similar action with regard to the House bill.

At a minimum, we consider expansions in demonstration project

authority unnecessary in light of the enormous and radical experiments being undertaken at the Department of Homeland Security

and Department of Defense.

Last Friday the DOD put forth its plans for the so-called ‘‘National Security Personnel System.’’ It is a deceitful document from

top to bottom, starting with its name, since it has nothing whatsoever to do with national security. As you know, AFGE strongly opposed the legislation that gave the Secretary of Defense the authority to rewrite the pay and labor relations system in the agency.

And, Madam Chairwoman, you no doubt recall that when Dr.

David Chu testified before your committees to argue his case, he

insisted that Secretary Rumsfeld had no intention of eliminating

collective bargaining and replacing it with something inferior. He

promised that all we wanted to do, all we needed was efficiency,

national bargaining instead of local bargaining over 1,300 contracts

when the issue was one that affected the entire agency.

It is my understanding, Madam Chairwoman, that you specifically intended for collective bargaining to be protected under the

statute. While we disagreed over the exact legislative language, I

believe that your goals and our goals with regard to protecting collective bargaining were the same.

During the debate over the legislation, AFGE repeatedly warned

that if Congress gave Secretary Rumsfeld the authority sought that

he would abuse that power, and indeed he has. His proposal states

that bargaining will be accomplished through a form of consultation both at the local and national level, but bargaining cannot be

accomplished through consultation. It can only be replaced by it.

Consultation merely allows employees to present comments to the

agency and presumes the agency’s right to ignore them. They’ll talk

to us, and then they’ll implement. Bargaining, on the other hand,

requires the change of good faith proposals that may differ, and

when agreement or compromise is not achieved the impasse is resolved through a neutral third party.

In his bill or in his proposal he puts a thing out there that he

calls ‘‘We’ll talk with you when it is a significant change to the bargaining unit.’’ I have been down this road before. So when a workVerDate 11-MAY-2000 11:15 Aug 10, 2004 Jkt 000000 PO 00000 Frm 00133 Fmt 6633 Sfmt 6633 D:\DOCS\94772.TXT HGOVREF1 PsN: HGOVREF1
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ing condition change applies to a smaller group within a large bargaining unit—and some of our bases have very large bargaining

units, but when it affects maybe 100 electricians or whatever he’ll

say, ‘‘No, we’re not going to talk about that because it doesn’t significantly affect the whole bargaining unit.’’ I’ve seen it before, and

that’s exactly what is contained in this proposal.

Mr. Rumsfeld would replace collective bargaining and collective

bargaining agreements with regulations that he issues unilaterally.

In his blueprint, he decrees that management issuances, whatever

that is, will supersede contracts, as well as past practice. That is,

there will be no contracts. He further decrees, ‘‘The new labor relations system will not employ any provisions of 5 U.S.C. Chapter

71,’’ which is the section of the law that grants union rights, collective bargaining rights, and the right to have grievances heard by

a neutral third party.

This proposal treats the men and women who serve this Nation

as civilian employees of the Defense Department as errant children

who don’t deserve anything more than, ‘‘Because I said so’’ as justification for decisions made by management. This management is

not infallible. The pillars of this system outlined by DOD will be

management by fear, intimidation, and coercion, and the resulting

loss to the public’s interest will be discrimination, crony-ism, favoritism, and patronage.

I have been talking to a lot of DOD employees recently, and this

is already—the horse is out of the barn. Jobs that they have been

working for and trying to compete for, promotions are already

being filled by people who are brought in, and as you investigate

it you see a little connection here on the crony-ism type of basis.

I think that’s something that has to be stopped immediately.

We submit that there is no national security rationale for eliminating collective bargaining and neutral third party oversight, but

Mr. Rumsfeld has thrown up an additional set of proposals for

which no conceivable connection to national security could ever be

asserted. He wants to dictate the number of people who have to

vote in union elections before he will declare them valid. He wants

to immunize DOD from any responsibility for failure to process

union dues payments. He has ruled out restitution as a remedy for

employees if DOD should ever find itself in violation of its own regulations. To top it off, he has decided to exclude whole categories

of employees from the benefits of union representation, including

anyone whose job requires certification, such as fire fighters, electricians, contracting officers, and attorneys, all of whom would be

eligible for union membership if they worked for any other employer in the United States, public or private.

The very human impact of a negotiated contract achieved

through collective bargaining is that employees will be able to have

their benefits, their working conditions, their opportunities for promotions, flexible working conditions, and the standards for discipline encapsulated in a written document that has been agreed

to by the employee representatives, as well as management. This

document, precisely because it is in writing, is transparent to the

workers, but most of all it is enforceable.

Ms. DAVIS OF VIRGINIA. Mr. Gage, I don’t mean to interrupt you,

but you are about 1 minute over your 5 minutes already, and I’ve

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heard you speak on the bills. Did you have anything else that you

wanted to say on the two bills that are the subject of this hearing?

Mr. GAGE. Well, I think if we are talking about retaining and recruiting employees, I think we really have to look at the road we

are going down, Madam Chairwoman. Something has to be done

about this. You can’t let a personnel system be based on this type

of union busting, and that is what is happening here. None of these

provisions result in any type of safeguard to national security. But

I appreciate the time and I appreciate the opportunity to testify.

Ms. DAVIS OF VIRGINIA. And I don’t mean to interrupt you, but

we do have your full statement in the record, and I would assume

all the Members have read it, but we do have other witnesses that

we want to testify, and we wanted to be able to get to the questions, because I’m sure many of the Members want to ask questions.

[The prepared statement of Mr. Gage follows:]

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Ms. DAVIS OF VIRGINIA. The one thing I would urge you to do is

to make sure that you talk to Secretary England, the Secretary of

the Navy. I spoke to him on the phone not too long ago, maybe 11⁄2

hours or 2 hours ago, and he is very interested in working with the

unions. The only thing I would ask you to do is to talk to him, work

with him, and if you have problems report back to me and we’ll try

to take it from there.

Mr. GAGE. Well, we have been trying. We have been calling and

trying to talk to anyone in the Department of Defense and we have

been shut out.

Ms. DAVIS OF VIRGINIA. Now you have a name. Secretary of the

Navy is the point man, and he, with his own words, said to me on

the phone that he is willing to work with the members of the

unions. So if you would just make sure that you get with him and

get back to us on how it goes, I’d certainly appreciate it.

Mr. GAGE. Thank you, Madam Chairwoman.

Ms. DAVIS OF VIRGINIA. Ms. Kelley, as always it is a pleasure to

have you back before this committee. We have your written testimony in the record, so if you would summarize your testimony we’ll

recognize you for 5 minutes.

Ms. KELLEY. Thank you. On behalf of the 150,000 employees represented by NTEU, I appreciate the invitation and the opportunity

to be here today. I must, however, begin by saying how disappointed NTEU is at the proposed new National Security Personnel System that was unveiled by the Department for this reason

that is focused on this hearing: if implemented as written, this will

have a negative impact on the ability to recruit and retain employees in the Department of Defense based on the environment that

it would create for those employees.

When the legislation was debated, NTEU questioned the need for

such broad discretion and we raised concerns as to whether it

would be exercised fairly. It is now clear that our fears were well

founded. The proposal severely limits collective bargaining, but it

also sets up a fox guarding the hen house approach to due process

for employees. Probably most interestingly, it establishes a system

for union elections that, if it were applied to current elected Federal officials today, most could not meet the test.

It was never clear what the problem was that the legislation

sought to address, but what is clear is that this committee needs

to revisit this matter. I appreciate your interest in the issue and

your commitment to ensure the unions’ involvement in the process.

Let me say on another note how much we appreciate, Madam

Chairwoman, your commitment to agencies having the proper tools

to allow them to hire and to inspire the best work force. An honest

process for setting Federal pay is a key first step, and we thank

you for your support of pay parity and for all of the members in

attendance at this hearing on this important issue. Unfortunately,

because the President did not act in accordance with the bipartisan

will of Congress, just as they did in 2003, Federal civilian employees must again wait for the full amount of their 2004 pay raise, the

raise that their uniformed counterparts have already received.

Health insurance is another consideration for prospective employees. Premiums for FEHB plans have risen 45 percent since

2001, alone. The Government pays 72 percent of the premium.

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Most employers pay 80 percent. NTEU supports bipartisan legislation to increase the Government’s share of the premium to 80 percent. I understand that you, Madam Chairwoman, are planning to

hold hearings later this year on the FEHB plan, and NTEU looks

forward to working with you on this.

A disincentive to Federal employment today is the administration’s march to contract out as much work as possible. Family

friendly programs and new rewards and incentives will do little to

attract employees if we cannot convince them that we are interested in their commitment to a career in public service. NTEU

members tell me that contracting out has eroded morale, disrupted

agency operations, and discouraged prospective employees from applying. Employees are appalled at the lack of oversight and accountability in contracting out. Congressman Van Hollen’s amendment to the 2004 Treasury appropriations bill tried to bring order

to the Government’s contracting process. I want to personally

thank you, Chairwoman Davis, and all Members who are here

today for your support of that amendment.

NTEU worked closely with Senators Voinovich and Akaka on S.

129, the Federal Workforce Flexibility Act. We are pleased that you

plan to move H.R. 1601, as well. Federal employees are increasingly required to conduct business travel on their own time and can

only be compensated in limited circumstances, so I was very

pleased to hear your question of OPM and their commitment to

take a re-look at this.

Let me give you two examples. An IRS employee is assigned a

case over 150 miles away. The taxpayer would like to meet at 1:30

p.m., and the employee is unable to complete their work by the end

of the business day. However, they stay an extra hour or two to

complete the assignment. As you noted, they would be paid hotel

expenses and per diem if they stayed, but instead most employees

would choose to travel home, in effect donating several hours of

work and travel time to the Federal Government. These employees

cannot be compensated for travel under current law. They cannot

be. However, had the employee elected to stay, the Government

would have paid these other expenses.

Here’s another example. An employee in Missouri reports his

work often goes beyond a normal working day, and his alternative

is to leave early and have to come back the next day and risk leaving an undesirable impression on the taxpayer and the taxpayer’s

attorney and to make the IRS appear unprofessional, something he

has too much pride in his work to allow to happen.

So in these cases, the employees cannot keep the best interest of

the Government in mind, present a professional appearance, and

avoid lodging and per diem costs for the Government. The provision added to S. 129 authorizes compensatory time for travel to

perform work assignments. It does not apply to normal commuting

travel or any time that would be for commuting, and it could not

be converted to money. It would purely be compensatory time for

time spent on the job.

NTEU is very pleased that the legislation discussed today draws

attention to the Government’s need to train employees, also. NTEU

hopes that you will work to ensure that agency training budgets

are properly funded. The bills also propose additional flexibilities

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in the use of recruitment, relocation, and retention bonuses. Limited funding is what hampers most agencies’ ability to put these

bonuses to better use, and NTEU hopes that a dedicated stream of

funding can be found for this purpose.

I thank you again for the opportunity to appear today and would

welcome any questions you might have.

Ms. DAVIS OF VIRGINIA. Thank you, Ms. Kelley.

[The prepared statement of Ms. Kelley follows:]

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Ms. DAVIS OF VIRGINIA. I’ll just use this moment to say that in

our manager’s amendment we already plan to take the demo

project out of H.R. 1601, and we plan on adding in the compensatory time that the Senate has added in, so that will be in our

manager’s amendment before it ever goes before the floor for a

vote.

Ms. KELLEY. I thank the Chair.

Mr. VAN HOLLEN. Madam Chairwoman, if I may——

Ms. DAVIS OF VIRGINIA. Yes.

Mr. VAN HOLLEN. Unfortunately, I’ve got to run to another hearing, but I wanted to commend you on your initiative in the legislation before us and also lend myself to some of the remarks that

have been made. It is important to move forward without, at the

same time, taking two steps back. Your legislation is a step forward. I think some of the other things we are seeing going on with

respect to the implementation of the Defense Department of the

legislation we passed, which, while there were differences, I think

that the way it has been implemented is really contrary to how either side would have interpreted. So I hope we’ll have ongoing

oversight with respect to that in this committee.

I thank you, and I apologize for having to leave.

Ms. DAVIS OF VIRGINIA. That’s OK, Mr. Van Hollen. We certainly

appreciate your input.

Let me just clarify one thing, and I did check with staff to make

sure. It hasn’t been implemented yet. As I understand it, when

DOD met with the staff, they met with them with strictly concepts.

It is not a done deal. It is strictly concepts. It is what they’re thinking. So now is the time to speak up to them and get them to correct

or work with you. That’s why I said please talk to the Secretary

of the Navy, because he has been appointed as the point man, if

you will, and is willing to work with you, so let him know your

frustrations and what you are unhappy with.

Again, it is just a concept is what I have been told. It’s just concepts, it isn’t in stone yet, so now is the time to fix it before it gets

in stone.

Thank you, Mr. Van Hollen.

Mr. VAN HOLLEN. Thank you, Madam Chairwoman.

Ms. DAVIS OF VIRGINIA. Sorry to keep you waiting, Mr. DeMaio.

We have the pleasure to hear from Mr. Carl DeMaio, president

of patient, and last but not least.

You have been recognized for 5 minutes. Again, we have your

written testimony in the record, so if you would summarize your

testimony in 5 minutes.

Mr. DEMAIO. Madam Chairwoman, members of the subcommittee, I appreciate the opportunity to be here this morning. I am

president of the Performance Institute, a private think tank that

focuses on reforming government through the principles of performance, accountability, transparency, and competition. We have extensive expertise in the area of Federal human resources management and recent reforms.

Last year the Institute surveyed all major Federal agencies to

catalog best practices in recruitment and retention. We compiled

those best practices in a report entitled, ‘‘Strategic Recruitment for

Government: Ten Innovative Practices for Designing, ImplementVerDate 11-MAY-2000 11:15 Aug 10, 2004 Jkt 000000 PO 00000 Frm 00183 Fmt 6633 Sfmt 6633 D:\DOCS\94772.TXT HGOVREF1 PsN: HGOVREF1
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ing, and Measuring Recruitment Initiatives in Government.’’ As

noted in our report and has been shown to the leadership of this

subcommittee, the Federal Government has a major human capital

crisis on its hands, and it is not just an issue of recruitment and

retention, it is a crisis of getting the right people with the right

skills in the right position at the right time to perform the right

function with the right compensation, all to be reviewed by the

right employee performance evaluation.

Now, that’s a lot of rights to get right, and many agencies are

still struggling in getting those rights right. But no matter how it

is spun, the reality is that more than half of all Federal employees

are now or in the next 5 years will be eligible to retire. Something

to note is that we have been talking about the human capital crisis

for many years, and GAO Comptroller General David Walker has

shown amazing leadership in this regard. We have not yet seen the

crisis materialize because of the downturn in the labor market. As

the economy recovers, the Federal Government will be facing a

monumental challenge in recruitment and retention.

This subcommittee has shown exemplary leadership on these

issues. I do hope that the focus on retention, recruitment, and relocation bonuses, the subject of the legislation, will not get overwhelmed by other H.R. issues facing the Federal Government.

These issues are very important for this committee to act on and

to deliberate over.

The subcommittee is considering legislation, H.R. 1601 and S.

129, to provide Federal agencies more flexibility in setting pay

rates for employees, providing bonuses for recruitment and retention and relocation, and improving the management of Federal

training. Proposed legislation has noble and worthy objectives;

however, it addresses only 2 of the 10 innovative practices for recruitment or retention.

Now, no legislation has to touch on all issues, but we do want

to propose several refinements to the legislation that we do support.

First, emphasize performance, not across-the-board pay increases. We are very supportive of the flexibilities for recruitment,

retention, and relocation bonuses for this very reason, but this subcommittee really should set as one of its objectives that through its

work Federal employees will start talking about my pay increase

rather than the pay increase. Across-the-board increases in Federal

salaries does nothing to recognize individual contributions to agency success. And if we are going to recruit and retain, we are going

to do it one individual at a time by valuing each individual’s contribution to agency mission.

For this very reason, I encourage this subcommittee to explore

other legislative vehicles to improve pay for performance. The committee could also look to the human capital performance fund as

an example. The President proposed a $300 million human capital

performance fund in his fiscal year 2005 budget, and we encourage

members of the committee to work to ensure that this funding survives the appropriations process intact.

We would urge the committee to consider alternatives to the

General Schedule system. Proposed legislation only provides flexibility within the existing GS system of pay grades. Many, including

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our organization, argue that a one-size-fits-all pay system with

rigid pay grades is not conducive to winning the war for talent. For

example, the Department of Defense wants to abandon the GS

schedule in favor of universal pay banding, the proposal that we’ve

talked about several times this morning, and it wants to give managers the ability to hire candidates on the spot for hard-to-fill positions.

We consider this proposal a first step in moving toward customized pay systems for each Federal agency reflective of their

agency’s mission, reflective of the labor market each individually

face.

Also, the subcommittee should consider market-based pay formulas. Again, currently in the Federal Government we ask OPM

to look at pay and look at locality adjustments and they apply a

one-size-fits-all schedule. Merely raising the pay grades can increase the government’s overall cost without a clear return on investment. It is worth pointing out here that employee recruitment

and retention battles we are going to face aren’t really going to be

with the private sector for most positions in most agencies. What

we are going to have to do is be ready to battle with the nonprofit

center and academics for our talent.

There is a different type of individual who comes into government—people who want to serve their community. They want to

help with social problems and have a sense of accomplishment or

purpose, whereas in the private sector there really is a profit or

bottom line basis. The only other area that these candidates or

these individuals can go to are the nonprofit world and academics,

so we have encouraged benchmarking pay against those two sectors

of society.

Finally—and this is very important to consider for this legislation—we need to link all HR initiatives to a fundamental strategic

human capital plan for each agency. We need accountability, and

we also need a set number of strategies that agencies need to pursue for winning the war for talent, and so we encourage you to

adopt language in the bill that would require each agency, when

providing a recruitment, retention, or relocation bonus, to measure

the effectiveness and the impact of those bonuses on recruitment

and retention and to tie that to skills gaps identified in the human

capital plan.

If the committee can act on these issues, you can strengthen this

bill which is already addressing very important issues.

Ms. DAVIS OF VIRGINIA. Thank you, Mr. DeMaio.

[The prepared statement of Mr. DeMaio follows:]

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Ms. DAVIS OF VIRGINIA. I just want to make sure that I understood you correctly when you said that these people would not—

people who work for the Federal Government would not go to private organizations, they would go to nonprofits. Are you comparing

pay grades there or what?

Mr. DEMAIO. We’re looking at the types of individuals who consider government service, and we have seen some polling done by

the Partnership for Public Service, Merit Systems Protection Board

has done some survey of Federal workers, as has OPM, and to basically suggest that we need to compete directly for every single position with the private sector pay is not an appropriate comparison.

There are some areas where certainly—for example, an accountant

at the Department of Treasury very well could go into the private

sector and get an accountancy job, but in other areas like Health

and Human Services their alternatives usually are going to be nonprofit organizations or academic organizations and institutions. So

one-size-fits-all pay comparisons is not what we are suggesting. We

would like to see, on each position that the agency is trying to recruit for, what is the competition offering, and sometimes that is

going to be a set of nonprofit organizations.

Ms. DAVIS OF VIRGINIA. I guess I will, No. 1, thank all four of

you for your testimony, and I guess I will just yield to myself for

questions.

Judge Dugan, can I ask you what percentage of ALJs now are

eligible for retirement and how many will be eligible in 5 years?

Do you have that?

Mr. DUGAN. Well, the figure we got—and we got it from OPM—

is that 91 percent are eligible. Now, I don’t—that’s figures we got

from OPM. I can’t speak for them.

Ms. DAVIS OF VIRGINIA. Eligible now?

Mr. DUGAN. That’s what we were told. Yes, that’s correct.

Ms. DAVIS OF VIRGINIA. OK. I guess that answers my next question then.

Mr. DUGAN. And then I looked around my office, and there were

a bunch of old people there. [Laughter.]

Ms. DAVIS OF VIRGINIA. You were the youngest guy in the room,

right?

Mr. DUGAN. Just about.

Ms. DAVIS OF VIRGINIA. Have you heard from any other agencies

or organizations? Have you heard any companies that ALJs decisions has declined because of recruiting and retention problems occasioned by the pay compression?

Mr. DUGAN. Well, I cited the FERC letter, but I don’t think we

have any particular studies that can quantify that. The problem is

that the register, OPM register, has been closed for over 5 years,

so when they talk about their views on recruitment it is a bunch—

it is guesswork, because right now the register is still closed and

they are right now creating a new test, so there really is no way

to know the quality that we’re going to get ultimately. The Commissioner of Social Security testified to Congress that she was light

about 200 ALJs because she hasn’t been able to hire. OPM, at the

urging of Congress——

Ms. DAVIS OF VIRGINIA. She’s short 200?

Mr. DUGAN. Right, short 200.

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Ms. DAVIS OF VIRGINIA. Which agency was that?

Mr. DUGAN. This was Commissioner Barnhart who testified before the Social Security Subcommittee in September, and they were

asking about addressing the backlog, of course. But what been done

now is OPM, through pressure from Congress, reopened the old

register that they have been holding and said they would give her

some names; however, she has expressed concerns about the quality of the remaining candidates and is only going to fill about 10

positions right now to fill that out.

In addition to that, we also have some major hiring that’s going

to have to be done because of the Medicare Act that has been

passed by Congress, so we’re looking somewhere between 400 to

500 ALJs we’re going to be needing as soon as possible. I think the

Medicare Act comes into effect in October 2005, the transfer to

CPMS.

Ms. DAVIS OF VIRGINIA. Do you know why the register was closed

for 5 years?

Mr. DUGAN. Well, it started off because of litigation, the Azdel

litigation, and there was a stay put on it by the Merit Systems Protection Board, but that ultimately was resolved and then OPM did

not reopen it. I don’t know why, but they said they were redoing

the test and they were going to put out a whole new type of test

for administrative law judges. So why they did not reopen it under

the old test I don’t know.

Ms. DAVIS OF VIRGINIA. What do you hear from amongst your

colleagues? Is pay a reason for them to leave and retire?

Mr. DUGAN. Well, the reason for the pay problem is more in the

cities that you were announcing. I’m in Charlotte, so the compression is not hitting us there, but the entry level, the new ones that

come in, we’re having a problem because if you are a GS–15 attorney you’re going to have to—you’re not coming in at the level. It’s

a 14 step 7 or 8 now. It’s almost a whole grade pay cut, so it has

to hurt. Even though we don’t have figures and OPM’s was guess

work, it just obviously has to hurt with recruitment.

Ms. DAVIS OF VIRGINIA. Thank you, Judge Dugan. We’ll do everything we can to work this bill through, but, as you heard, the administration is against this so it is an uphill battle.

Mr. Gage, you mentioned the demo project that you didn’t like.

Besides that, are there any other provisions of the bill, because we

want to be open with you and we want to know what you like and

what you don’t like.

Mr. GAGE. Well, in everything that I think we are going to be

looking at—and I’m sorry to harp on this again, but we hear a lot

of good-sounding cliches that end up in workers rights being abrogated, so we are going to go through everything that we hear with

new personnel changes, new ideas, pay for performance, and we’re

going to be looking at things very hard with the idea that these

can’t be excuses or high-sounding names for taking away employee

rights.

Ms. DAVIS OF VIRGINIA. Well, if you’ll take a good look at H.R.

1601 and compare it to S. 129 and let us know what you think before it is too late, I’d appreciate it.

Ms. Kelley, have you received a lot of complaints about the problems now experienced by the Federal employees who must travel

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for work yet receive no compensation other than the two that you

mentioned to me?

Ms. KELLEY. This is very far-reaching, particularly in the IRS. It

has been a longstanding problem, and as the IRS has reorganized

into business units so the taxpayers are served by specific business

units, it has required even more travel by employees than ever before, so these instances are multiplying every day. They are not decreasing. And, as I said, I know OPM has said there are circumstances where they can be compensated. There are, but not

these employees. There is no way under the current law that the

employees who are doing this travel can be compensated for doing

the work of the IRS, and that is what we were hoping to have

made fair.

Ms. DAVIS OF VIRGINIA. From the examples you gave me—I

mean, I haven’t studied it that closely, but just from hearing it it

seems to me like we’d be saving taxpayer dollars if we reimbursed

them for their time.

In your written testimony, as I read it, you didn’t say anything

about objecting to the demo project in H.R. 1601. I’ve already told

you I plan on taking it out of the manager’s amendment because

I’m not sure about it. Do I take it that you support it?

Ms. KELLEY. No. I wouldn’t necessarily take that. We have been

working with Senators Voinovich and Akaka on the many pieces

that are in this bill, because there are a lot of moving parts in it,

and there were, you know, things that we should have preferred

not, but as part of the package we were trying to work together as

we did with your office as you move toward the H.R. version, so

it is fine with us if you make the manager amendment.

Ms. DAVIS OF VIRGINIA. I’m going to charge you with the same

thing I charged Mr. Gage with. I would ask you to go through the

bill with a fine-toothed comb word by word, line by line, and if

there is any provision that is objectionable to you and your employees, let us know before it is too late.

Ms. KELLEY. I will do that. Thank you.

Ms. DAVIS OF VIRGINIA. Mr. DeMaio, in your view are there any

flexibilities in H.R. 1601 that you believe that we shouldn’t—I’ve

heard that you believe there is more we should be enacting, but are

there any provisions in there now that you think we should not be

enacting?

Mr. DEMAIO. Well, we are for more flexibilities, but the flexibilities that you are offering in the bill need to be accountable. We

have to show results with these recruitment, retention, relocation

bonuses, and so we do suggest not only the basis for all the bonuses to be tied back to the strategic human capital plan, but tied

to performance measures and evaluation, so if the agency is providing recruitment bonuses over a period of time for a specific position

class in their agency and it is not working, then they need to look

at other alternatives.

We also suggest longer-term contracts for employees who get bonuses. In one respect for the recruitment bonus you do require a

time of service contract, but for the retention bonus there is no

time of service. We would like to see some of those accountability

provisions woven into the flexibilities. It is OK to be flexible, but

you have to show results, and that’s what we are advocating.

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In terms of the demonstration projects, that really is the context

that we place our recommendation that the committee may want

to see the DOD and the Department of Homeland Security

progress. We think what is going on at DOD and Department of

Homeland Security is innovative, will provide substantial flexibility

and substantial incentives for recruitment, retention, and employee

management. That’s why we are, as of right now, supportive of the

proposals that we have seen. We think that they probably will offer

a template to take governmentwide and to have an overall change

in the Civil Service system based upon our experiences in those

two agencies.

Ms. DAVIS OF VIRGINIA. And, in my opinion, they may well do

that. Had I had my way, I would rather have waited to see if it

worked for DHS before we expanded it to the largest agency for

Civil Service employees, but I didn’t have my way.

Mr. DEMAIO. I think that’s our—our position here today is consistent with that. Let’s get these two massive restructurings under

our belt, let’s learn from them, and then let’s see where they would

apply elsewhere in the Federal Government. It may be that you

would want to take those two systems governmentwide or it may

be that you want to continue with the demonstration project route

of allowing individual agencies to customize their own system. I in

the past testified on our discomfort with having a choose-your-own

adventure Civil Service system where each agency comes up with

their own rules of the road.

Ms. DAVIS OF VIRGINIA. You’re not the only one uncomfortable

with that. That’s why I said that we will try to make sure that any

agency that’s wanting to make a change, that it’s looked at very

closely by this subcommittee, and I think I’ve said it in the past,

and I know I’ve probably said it to you, Ms. Kelley, that I would

like to see a model that we use agency-wide before we go willy-nilly

here and there and do something where folks don’t know what’s

hitting them tomorrow. But, again, I would hope that we don’t do

anything too quick. And I appreciate the comments that you’ve

made.

I will tell you that I don’t think we can go any broader in scope

with the bill that we have than what we have right now. We were

biting off a little bit at a time, but trying not to do anything that

damages or harms our——

Mr. DEMAIO. And I think that’s a role of good government groups

like ours. Our role is to try to present provocative ideas, knowing

that Congress will probably have to moderate a number of interests

and probably do something that moves us forward and gives us

progress.

Ms. DAVIS OF VIRGINIA. I’ll give you a for instance. I didn’t see

anything wrong with the ALJ bill, but I’ve met with resistance

within our Congress in great amounts, which surprised me.

Mr. DEMAIO. If I could point something out, also in response to

the testimony on the administration’s competitive sourcing initiative and contracting out, we have studied that initiative and——

Ms. DAVIS OF VIRGINIA. You might not want to talk about that

in this room right now.

Mr. DEMAIO. We have concluded that competitive sourcing actually is a tool for the human capital process, and if done properly

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can be used to redeploy agency workers to areas where we have a

recruitment challenge, and so that’s the way we look at competitive

sourcing. Rather than looking at arbitrary targets for out-sourcing

or privatization, which we do not support, we want to see competition as re-deploying agency work, human capital, to the area where

it is needed.

Ms. KELLEY. Madam Chairwoman, if I could just comment, I’m

glad you identified your suggestions as provocative. I don’t want to

start——

Ms. DAVIS OF VIRGINIA. I don’t think anybody is going to disagree

with that.

Ms. KELLEY. This is try—my point, the suggestions that have

come forth from Mr. DeMaio have to do with measuring, monitoring, ensuring that progress is made, that there are measures in

place. There is not a strong track record of that within agencies on

anything, whether it is on contracting out, and the list can go on

and on. And so if the agencies proceed with these various implementations, assistance from other such as your group on insisting

on the measuring, the monitoring, the moving slowly before implementing would be very much appreciated, because I know of no

agency that has a good track record with doing this, and they just

don’t know how, and we all have to help to make sure that happens.

Ms. DAVIS OF VIRGINIA. I totally agree with you, Ms. Kelley.

Mr. DeMaio, one last question for you. Are there any weaknesses

in the President’s management agenda in the Government Performance and Results Act which call for strategic human capital

planning that we should correct by legislation?

Mr. DEMAIO. Well, we believe that legislation exists, the entire

management agenda exists in legislation, and that agencies have

the statutory tools they need for effective management. The question now becomes: are we applying consequences for agencies that

are not engaging in performance-based management? I think the

President’s management agenda’s big impact is in that area. The

initiatives are not new. They have been in the Government for

many, many years, competitive sourcing since the Eisenhower administration. But what is needed is accountability. What is needed

is that results demonstration through performance evaluation, and

so that is where we are focusing, is on the implementation of the

President’s management agenda within agencies.

The Congress could formalize the development of strategic

human capital plans in legislation. That has not happened. The

creation of a human capital officer is certainly a very important

step. What it does is it brings HR to the management table in a

way that the chief financial officer and the chief information officer

have been brought to the table, but, just like with the ClingerCohen Act, which does the IT plan, and the GPRA, which does the

performance plan, the strategic plan, maybe that human capital officer should be responsible for developing in legislation, not just an

administration initiative, a strategic human capital plan with specific goals based on a comprehensive work force assessment of how

many employees do we have today, what are their skill sets like

today, and what is our mission going to require we have in 5 years,

so it would encompass recruitment, retention, training, succession

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planning, developing the next generation of government leaders.

All of these issues have to be spoken to in a formal way and in an

accountable way through human capital plan. I think this committee could enact that in this bill and require that recruitment and

retention, relocation flexibilities be tied to an analysis and a set of

goals and strategies articulated in a comprehensive plan.

We don’t know whether the next administration will require

human capital plans. We would like to see that formalized through

congressional action.

Ms. DAVIS OF VIRGINIA. Just so you know, we are having a hearing in May to address these issues and to see if we’re doing right

and what we need to do.

There’s a lot going on right now that affects all of our Federal

employees, and if we’re going to make the changes that apparently

seems to be the will of many around here to do—not necessarily in

this room—maybe this is the time to do it as we are having so

many people retire, so we don’t lose any of the current work force

that we have. Rather than going in and doing away with everybody

or anybody, just let people go by attrition and make our changes

at that point. But in doing so I want to work with all of you to

make sure that we do it right and that we don’t harm the quality

of life of our Federal employees, because you are a valuable asset

to us and not one that we want to lose.

I thank you all for being here today. Again, Judge Dugan, if you

have any comments about the legislation for the ALJs, anything

you want us to look at more closely?

Mr. DUGAN. I just wanted to add that the whole performance

issue and the SES issue, that was all mixing apples and oranges.

Ms. DAVIS OF VIRGINIA. That’s why I tried to point it out.

Mr. DUGAN. It really, really wasn’t getting to what we are dealing with, APA hearings and—I think you understand that.

Ms. DAVIS OF VIRGINIA. That’s why I tried to clarify with Mr.

Sanders that SESers are performance based. ALJs are not even allowed to be.

Mr. DEMAIO. Madam Chairwoman, if I could indulge, we did not

include our report in the committee record, but we include our Web

site address, www.performanceweb.org, where agencies can

download the report, suggestions on how to win the talent war. Ms.

Tara Short is our director of human capital strategy at the Institute and is available for questions just by going to the Web site.

Ms. DAVIS OF VIRGINIA. Thank you, Mr. DeMaio. Again, thank

you all for being here.

The hearing is adjourned.

[Whereupon, at 1:03 p.m., the subcommittee was adjourned, to

reconvene at the call of the Chair.]

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