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27–513 PDF 2006

OPM’S 2007 BUDGET AND NEW STRATEGIC AND

OPERATIONAL PLAN: A DISCUSSION WITH THE

OPM DIRECTOR

HEARING

BEFORE THE

SUBCOMMITTEE ON THE FEDERAL WORKFORCE

AND AGENCY ORGANIZATION

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

MARCH 28, 2006

Serial No. 109–141

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

TOM DAVIS, Virginia, Chairman

CHRISTOPHER SHAYS, Connecticut

DAN BURTON, Indiana

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

GIL GUTKNECHT, Minnesota

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

JOHN J. DUNCAN, JR., Tennessee

CANDICE S. MILLER, Michigan

MICHAEL R. TURNER, Ohio

DARRELL E. ISSA, California

JON C. PORTER, Nevada

KENNY MARCHANT, Texas

LYNN A. WESTMORELAND, Georgia

PATRICK T. MCHENRY, North Carolina

CHARLES W. DENT, Pennsylvania

VIRGINIA FOXX, North Carolina

JEAN SCHMIDT, Ohio

——— ———

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

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

BRIAN HIGGINS, New York

ELEANOR HOLMES NORTON, District of

Columbia

———

BERNARD SANDERS, Vermont

(Independent)

DAVID MARIN, Staff Director

TERESA AUSTIN, Chief Clerk

PHIL BARNETT, Minority Chief of Staff/Chief Counsel

SUBCOMMITTEE ON THE FEDERAL WORKFORCE AND AGENCY ORGANIZATION

JON C. PORTER, Nevada, Chairman

JOHN L. MICA, Florida

TOM DAVIS, Virginia

DARRELL E. ISSA, California

KENNY MARCHANT, Texas

PATRICK T. MCHENRY, North Carolina

JEAN SCHMIDT, Ohio

DANNY K. DAVIS, Illinois

MAJOR R. OWENS, New York

ELEANOR HOLMES NORTON, District of

Columbia

ELIJAH E. CUMMINGS, Maryland

CHRIS VAN HOLLEN, Maryland

EX OFFICIO

HENRY A. WAXMAN, CALIFORNIA

RON MARTINSON, Staff Director

CHAD BUNGARD, Deputy Staff Director

ALEX COOPER, Clerk

TANIA SHAND, Minority Professional Staff Member

(III)

C O N T E N T S

Page

Hearing held on March 28, 2006 ............................................................................ 1

Statement of:

Springer, Linda M., Director, Office of Personnel Management .................. 11

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

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

of Illinois, prepared statement of ................................................................ 8

Porter, Hon. Jon C., a Representative in Congress from the State of

Nevada, prepared statement of .................................................................... 4

Springer, Linda M., Director, Office of Personnel Management, prepared

statement of ................................................................................................... 16

(1)

OPM’S 2007 BUDGET AND NEW STRATEGIC

AND OPERATIONAL PLAN: A DISCUSSION

WITH THE OPM DIRECTOR

TUESDAY, MARCH 28, 2006

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON FEDERAL WORKFORCE AND AGENCY

ORGANIZATION,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The subcommittee met, pursuant to notice, at 10 a.m., in room

2154, Rayburn House Office Building, Hon. Jon C. Porter (chairman of the subcommittee) presiding.

Present: Representatives Porter, Davis of Virginia, Davis of Illinois, Norton, Cummings, and Van Hollen.

Staff present: Ronald Martinson, staff director; Chad Bungard,

deputy staff director/chief counsel; Chad Christofferson, legislative

assistant; Patrick Jennings, OPM detailee/senior counsel; Tania

Shand, minority professional staff member; and Teresa Coufal, minority assistant clerk.

Mr. PORTER. Good morning. I’d like to bring the meeting to order.

Linda, you were supposed to bring coffee and doughnuts for everyone in the audience today.

Ms. SPRINGER. They’re a little late.

Mr. PORTER. Just checking.

Again, thank you all for being here today. A quorum is present.

The Subcommittee on Federal Workforce and Agency Organization

will come to order. Again, Director Springer, thank you for being

here today and for your help and for all that you have accomplished in the last year.

Today I know you’re here to talk about your 2007 budget request

from the President and the release of an aggressive, Strategic and

Operational Plan for OPM by yourself.

The time is right to examine the OPM’s goals and its progress

of ongoing initiatives. Let me be the first to say that I’m quite impressed with OPM’s new strategic and operational plan for the next

5 years. Quite frankly, it takes a lot of guts to move a Federal

agency in this direction with a to-do list that’s pretty substantial.

I am very impressed, and I realize that you’re moving OPM into

being one of the model Federal agencies here in D.C.

So I appreciate it.

The Director has committed OPM to specific goals, with target

dates for each goal. The plan is a concise roadmap for accountability. It’s a vast improvement over OPM’s old strategic plan. To illusVerDate 11-MAY-2000 10:06 Jun 29, 2006 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 D:\DOCS\27513.TXT HGOVREF1 PsN: HGOVREF1
2

trate, let me contrast the previous plan with the new plan by focusing on similar objectives with regard to hiring. OPM’s old strategic

plan stated the following objections with regard to hiring: ‘‘increase

the effectiveness and efficiency of the Federal hiring process and

make Federal employment attractive to high quality applicants of

diverse backgrounds.’’ This is not really very informative, and the

page of descriptive text that follows doesn’t clarify the statement.

Again, it’s very broad. Contrast the statement I have just read with

the example from OPM’s new plan, decrease hiring—pardon me,

‘‘Decrease hiring decision timeframes to 45 days from the closing

date of job announcement to date of offer for 50 percent of hires

by the end of fiscal year 2006, and increasing by 10 percent per

year thereafter to 90 percent in 2010.’’

That’s very concise, very specific, and that’s something we’re not

accustomed to, so I appreciate that.

And there are 170 of these specific goals in the plan. Again, it

takes a lot of courage to publish a plan like that in Washington

and I commend you, Director Springer, for your efforts and hope

that you can complete all of your goals on time. However, I suspect

some of these target dates may be adjusted as the year goes on.

But that’s to be expected. I’m willing to give you some room in recognition of the risk you have taken to commit OPM to specific target dates.

But turning to the budget report, the President requests a budg- et allotment of $256 million for OPM, an increase of $17.2 million

for OPM’s fiscal year 2006 post-recession budget allocation. The requested $17.2 million increase consists of $26.7 million for the new

OPM initiatives, primarily OPM’s Retirement Systems Modernization Initiative, and $13.7 million in offsets. OPM’s budget allocation also includes $17.7 million for OPM’s Office of Inspector General.

I’m pleased that the President has allocated new funding to move

forward with the Retirement Systems Modernization Initiative.

Last year I signed a letter to you, Director, expressing my experience about the reports of delays with the finalization of retirement

claims. As you indicated in your response to that letter, the Retirement Systems Modernization effort promises to bring needed improvements to the speed and accuracy of retirement claims processing, and should greatly improve OPM’s customer service for Federal retirees.

I am concerned about some of the program reductions that OPM

is absorbing. Although the President’s 2007 budget requests a

budget increase for OPM, primarily for retirement systems modernization, I think we should consider the obvious question, what

is being cut?

The fine print of OPM’s budget mentions that OPM will be observing $13.7 million in program offsets. This may seem like a tiny

amount in budget terms, but when considering the enormity of the

Federal budget, it’s all too easy to lose sight of the impact. However, I think the potential offsets that OPM may be forced to absorb are not insignificant. I would like to have more information

about where OPM plans to absorb these reductions.

In this regard, I think it’s important to realize the Federal work

force is facing an unprecedented period of change. As noted, the

3

Federal work force will experience a ‘‘retirement tsunami’’ caused

by the retirement of the Baby Boom generation.

The Federal Government must be able to recruit and retain new

employees in an increasingly competitive technologically innovative

environment. You must have sufficient funds and resources to

allow you to continue to provide human resources and leadership

in this environment.

I look forward to working with the congressional appropriators to

assure that OPM receives the funds it needs to accomplish its mission. In addition, the budget allocation for your Office of Inspector

General is facing a $452,000 cut. Again, this may seem like a tiny

amount in budget terms. The Inspector General, however, achieves

an extraordinary return with the funds he has available.

In 2005, the Inspector General reported that they recovered ap- proximately $122 million. This amount includes $54.6 million recovered for the Federal Employees Health Benefits Plan from the

civil settlement of a case involving allegations of false claims and

kickback charges against a company that managed the pharmacy

benefit programs of several Federal Employees Health Benefits

plan carriers.

The Inspector General recovered these funds using an oper- ational budget of approximately $17.9 million after an adjustment

for certain expenses. That is a return on investment of approximately $8 for each dollar budgeted. If that rate is an indicator, a

$452,000 cut means the Inspector General will recover approximately $3.6 million less in fiscal year 2007 than he otherwise

would have recovered.

Although the Inspector General is not here today to answer questions, I think that amount deserves further consideration.

With that said, Director Springer, thank you again for being here

this morning. I look forward to our discussions. And I’d like to recognize our ranking minority member, Mr. Danny Davis. Thank you

for being here.

[The prepared statement of Hon. Jon C. Porter follows:]

4

5

6

Mr. DAVIS OF ILLINOIS. Thank you very much, Mr. Chairman. I

want to thank you for holding this hearing today. It gives us the

opportunity to discuss the impacts of the fiscal year 2007 budget

on Federal workers.

The proposed 2.2 percent pay raise is markedly lower than the

raises Congress has enacted for the past several years. Federal pay

raises have averaged more than 3 percent since 1999. Additionally,

Section 836A in the appendix of the President’s budget proposes

that, in addition to annual and locality payments, the 2.2 percent

pay raise should include special pay rate. Federal white collar employees receive an annual pay adjustment and the locality-based

comparability payment in January of each year. Under the administration’s plan, a special pay adjustment which would go only to

employees in hard-to-fill jobs or locations would be included in the

pay formula. Currently, Federal agencies must fund higher pay

rates for hard-to-fill jobs from the existing personnel budgets rather than from the overall pay raise that Congress approves each

year. This action, if taken, would diminish the amount of money

available for annual and locality pay adjustments.

The President’s budget also proposes $3.4 billion in savings from

the Federal Employees Health Benefits Program over the next 10

years. The savings reflects a change in FEHB that would allow the

governmentwide fee-for-service plan offered by Blue Cross/Blue

Shield the ability to offer more than two levels of benefits. One

likely result of expanding the governmentwide plan to allow for

three levels of benefits is that the governmentwide plan would include a high deductible health plan that is coupled with tax advantaged health savings accounts [HSAs]. And in 2005, the FEHBP

began offering such HDHP options in employee-organization sponsored plans and comprehensive medical plans which are not governmentwide.

The Government Accountability Office [GAO], recently issued a

report evaluating the experience of the 14 FEHBP HDHPs in the

FEHBP. The reports find and suggest that Congress should proceed with caution and not expand the use of HDHPs until the impact of the Federal Employees Health Benefits Plan is better understood.

Finally, the administration continues its call to grant all agencies

the personnel flexibilities received by the Department of Homeland

Security and the Department of Defense in 2002 and 2003 respectively. There are serious concerns regarding the extension of these

flexibilities throughout the Federal Government. One of the main

concerns regarding the extension of these personnel flexibilities is

that to date there is an insufficient basis for assessing the effectiveness.

Personnel flexibilities granted to DHS and DOD are being challenged in the courts, thereby delaying the implementation and

evaluation of these new systems. It is therefore impossible for Congress to measure and to evaluate their impact on the work force

and to understand the cost associated with the design, implementation and training related to these new systems.

I have serious concerns about the administration’s recommendations and of course look forward to Director Springer addressing

7

them. Again, I thank you for having this hearing and yield back

the balance of my time.

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

8

9

Mr. PORTER. Thank you, Mr. Davis. I do have a question. You

handled all those acronyms quite well in one sentence. You did

really well. Thank you for your opening.

Congresswoman, do have you an opening statement this morning?

Ms. NORTON. I very much appreciate this hearing, Mr. Chairman, and the collegial way in which you run this subcommittee.

And I want to welcome Director Springer. I’m pleased to hear what

she has to say today, and I feel for her because I think she has

come to the agency at a problematic time; when many of the issues

that are most troublesome were decided before Ms. Springer even

got there. It’s her job to somehow take these issues and grapple

with them and make them work, and some of them present huge

challenges that would be very difficult to deal with.

I do want to say a word on the pay raise. Pay raise has been consistently controversial in Congress. Every time it equalizes the pay

between the civilian and the military work force, there are very

good reasons; particularly after September 11th, the distinction is

very much without a difference. So this time, everybody’s pay raise

is less than it should be. There’s a saying, I’m sorry to have taken

all of you all down with us, but it looks like we took the military

down with us.

Since the administration got the message that Congress is not

going to abide a disparity in pay between people who all serve the

Federal Government, so everybody is supposed to take less than

they are due. Let’s see how the appropriators deal with that one.

For this committee, Ms. Springer’s tenure thrusts her in the middle of a set of huge experiments that one might have expected to

be done dose by dose, and already many of the issues that the committee pointed out have surfaced the last place the Federal Government wants them to surface, and that is in the courts. Entire sections of the very controversial personnel and pay changes are now

being held up in the court. Collective bargaining, personnel flexibilities.

The one thing that would seem to be wise would be for the Federal Government not to extend these major changes in the Civil

Service system until they have had an opportunity to see whether

they are workable at all. Not whether they work but whether they

are workable at all.

Already, more than half the work force is involved because we

have the Homeland Security Department, and we have the Department of Defense. That’s a very big experiment. So one wants to figure out what works and what doesn’t. It’s not as if one has a small

cohort and we’re ready to go further. In fact, on the contrary. What

we have is more than half the work force being subjected to personnel changes, personnel and pay changes of a kind that have not

taken place in 100 years, and they’re in the courts now. Some of

them are so bereft of due process that I predict that they’ll be in

the courts for some time.

The administration forgot one cardinal principle, that is the difference between a private work force and a government work force,

and yes, I’m sad to say, perhaps, although, I think there is a very

good reason for it, that due process does attach to certain parts of

government employment that would not be the case if one worked

10

for Google. And in many ways, these reforms were treated as if, in

fact, everybody in the Defense Department, from the worker who

perhaps is least important to the mission of the Department all the

way to the very top, should be treated in the same way, with the

same personnel and pay flexibilities, with collective bargaining

thrown overboard so that there was no way in any real sense to

protect a worker, at least if we are to understand the decisions of

the courts thus far.

The committee was one that, after September 11th, there needed

to be changes in certain parts of the personnel system and with respect to certain personnel of the Federal Government. This is a moment, it seems to me, particularly since the matter has wound up

in court, for us to look very seriously at what has happened and

for OPM to think very seriously before proceeding on any next

steps.

Finally, Mr. Chairman, here we go again with health benefit

plans proposed to be extended. There have been some experiments

here, and experiments that confirm the obvious, that the people

who take advantage of these plans are young, healthy and high

paid. And I say to you, Madam Director, that is not a characterization of the Federal work force. It is what, almost 3 million person

work force, and no one would say that it was like a high tech work

force, young folks who might in the high tech parts of Virginia

want to take advantage of such a change, so that in looking at a

health benefits plan, we are obligated to look at the entire work

force, and I must say that what the GAO tells us so far is that it

would be—what the GAO has had to tell us thus far seems to indicate that we would move at our own peril to spread, or should I

say at the peril of Federal employees, to spread health benefit accounts through this kind of a work force.

It is a work force where people are given pensions and benefits

designed to keep them on the job for long periods of time. That’s

another difference between the Federal work force and other work

forces. The Federal Government isn’t doing such a good job at that

today. Not only are we not able to recruit people; we train people

and we find that, particularly with the contracting sector right out

there ready to pay them more, they are gone. This puts the Federal

Government, particularly with its missions, its multiple missions

after September 11th, not to mention its usual missions, at a point

when it should be rethinking personnel policy, trying to reinforce

what personnel it has, particularly as the Baby Boom generation

opts very often not even to wait for retirement but to go with early

retirement and then to go someplace else and make money in the

private sector.

It is an issue that got the attention of this committee that is so

serious, that this committee in this very room before Ms. Springer

came had a joint committee of the House and the Senate, so concerned are we that there are no natural reasons for people to come

to the Federal work force as there were before.

In many ways, we need these people, particularly people in certain categories, more than ever, and the Federal Government is not

taking—making steps that would encourage people not only to

come but to stay. So I have very serious personnel concerns, some

of them above your pay grade, but certainly, Ms. Springer, some of

11

them within your purview, and I very much look forward to hearing your testimony today.

Mr. PORTER. Thank you very much.

Mr. Van Hollen, do you have anything you’d like to add this

morning?

Mr. VAN HOLLEN. Thank you, Mr. Chairman. Looking forward to

the testimony.

Mr. PORTER. We need to take care of some procedural matters.

I ask unanimous consent that all Members have 5 legislative days

to submit written statements and questions for the hearing record.

Any answers to written questions provided by the witness will also

be included in the record. Without objection, so ordered.

I’ll also ask unanimous consent that all exhibits, documents,

other materials referred to by Members and witnesses may be included in the hearing record, that all Members be permitted to revise and extend their remarks. Without objection, so ordered.

It’s also the practice of the subcommittee to administer the oath

to all witnesses. I’d ask that you now stand.

[Witness sworn].

Mr. PORTER. Let the record reflect the witness has answered in

the affirmative.

Our first panel today, and our only panel here, we’ll hear from

Director Linda Springer, the Director of the Office of Personnel

Management. She has been with us before and it’s always a privilege to have you here, and we appreciate it very much. Ms. Springer, if you’d like to proceed with your opening comments.

STATEMENT OF LINDA M. SPRINGER, DIRECTOR, OFFICE OF

PERSONNEL MANAGEMENT

Ms. SPRINGER. Thank you, Mr. Chairman. What I’d like to do is

make my comments with the aid of some charts and we’ll provide

copies of those charts to the members. I would ask that the full

text of my written statement and the attachments be submitted for

the record.

The first chart is actually just the cover of the plan, but by way

of openers, I’d just like to say that as you mentioned earlier, Mr.

Chairman, this is a different plan. It has 170 actual to-dos. We

have given complete visibility into the operations of OPM, what we

intend to do over the course of this plan period, and each of those

to-dos has a due date, which makes it very unique. The whole

world can see what we’re trying to do, when we expect to have it

done, and they can hold us accountable.

This is accountability taken to a degree that I think is rare, certainly in the Federal Government. So we are very proud of this

plan. And the starting point for it obviously was to redefine our

mission statement.

If you’ll see on the next chart, essentially our job is to ensure

that——

Mr. PORTER. Excuse me, Director. Traditionally we hold testimony to 5 minutes, but please, know if you need extra time.

Ms. SPRINGER. Thank you, sir. Appreciate that.

The mission is to ensure that the Federal Government has an effective civilian work force. That is OPM’s job. It’s a big job. We

have nearly 2 million men and women in the Federal work force.

12

Most of those are outside of Washington, DC. So it’s a worldwide

effort, and it stems from the front end with background investigations, all the way through the retirement administration process.

So if OPM does its job well, every other agency will be able to serve

the American people better for it.

Now we have developed this plan at the same time that we were

developing our 2007 budget. So there’s great consistency and harmony between the two. This next chart shows the budget priorities

that were presented in the congressional budget justification, and

there are 11 of them, and they’re all very important to us, and it’s

exactly the same, and we took this right out of the CBJ.

Each of those has to-dos in this plan; 53 of the 170 are lined up

with these 11 priorities that we presented in the budget. And in

the attachment to my statement is a page for each of these 11 with

some very specific to-dos, and, as I said, with due dates for each

of them. So you can take a look at those, and you’ll get an idea as

to how we’re going to make these things happen.

There are some highlights I want to give you here. On the retirement benefits administration, there are 2 million people, over 2

million people now covered by our retirement administration process. That includes members of the legislative branch, includes all

of you when you get to the point of needing a retirement calculation. So we have a strong common bond in making sure OPM does

a good job.

When it comes to health benefits, we have in the neighborhood

of 8 million people covered by the FEHBP. That includes present

and former employees and dependents. When it comes to things

like the FEHBP, we’re looking at ways to deal with health information technology. I know, Mr. Chairman, that’s an important effort

which we are grateful for your interest in that and looking forward

to the hearing on that, but we’re very involved there and share

your interest in it.

Attracting employees for the future. That is a very, very important part of making sure that we continue to have an effective civilian work force in the future. Appendix E of our plan deals with a

concept and an approach to that called career patterns. Again, I

would direct your attention to that.

In addition to all those things, we want to make sure OPM’s

management makes it a model of performance across the Federal

Government. So those budget priorities again are really where our

focus will be not just in 2007, but beyond.

On the next chart, you will see a snapshot again consistent with

what we’ve already given you in our CBJ of our 2007 appropriations request. I know the print is small, and there is a copy of this,

I believe, in the material that you have received.

Just to highlight it, the total request is for just short of $37 billion; 99 percent of that is for trust funds. It’s mandatory. So it’s

only about 1 percent of what we request that is actually discretionary and is used to run the operation of OPM. That discretionary portion shows an increase this year of roughly $17 billion.

$17 million. That’s the net of a $27 million increase for a new retirement modernization project, which I’ll explain in a minute, offset by a decrease of roughly 10 million.

13

That difference, that decrease, that offset, a portion of it is related to staffing. We’re going to be running with 26 less people.

Doesn’t sound like a lot in the Federal Government, but that

amounts to several million dollars. We’re going to be holding back

and delaying some other systems enhancements. We’re going to be

cutting back on some contractor support. And those are the three

main areas that will allow us to cut back and to fund a portion in

effect of that retirement modernization project. So this year, we’re showing an increase of roughly $17 million in

that small 1 percent of the total of our budget request for 2007.

I’d like to go to the next page, the next chart, and talk a minute

about this retirement systems modernization project. Again, the

reason why I’m zeroing in on this is twofold. One, it’s the one area

where we’ve asked for more money in 2007, and the second thing

is, everybody in this room who works for the Federal Government

cares about this if we’re going to retire some day, or at least have

a—leave with a vested retirement benefit.

OPM does this process manually today. We take too long. We got

a letter from many of you late last year, signed by nine members,

many of whom are present today, saying that we’ve got to do a better job. We can’t have delays of 90 days; we can’t be putting out

benefits for 2, 3, 4 months until the calculation is final with benefits that have a hair cut of 15, 20, 35 percent until we get all the

information to do our calculation.

Part of that is a function of getting information from the agencies. Part of it is a function of the fact we’re doing these calculations manually. You see this drawer over here. I’m doing a little

show-and-tell here, and I hope I don’t abuse my opportunity, but

this is a sample of what our people have to work with.

We have 28,000 file cabinets; five drawers in each cabinet;

144,000 of these drawers, packed, that our people have to go

through to get personnel records when someone retires and then do

a calculation manually. It is a shameful way of doing this.

If we took all the drawers for our retirement office and put them

end to end, starting in this room, we could go all the way to Baltimore and come back again and not run out of drawers. That’s how

bad it is.

Mr. PORTER. Excuse me, Director. That would be just Ron

Martinson’s file, right?

Ms. SPRINGER. Some files are bigger than others.

And looking ahead to the increased number of people that are

going to be retiring, this is not a sustainable situation. So we’re

doing two things: In the short run, we’ve asked for some money in

this budget, a little bit, about a million plus to bring back some

people who are experienced. We’re working on some process refinements so we have the more experienced people doing the more complicated retirement calculations, the easier ones with the newer

people. We’re working with agencies on a pilot to make sure that

they can get us information maybe even before someone retires so

we can get a head start.

Those are all just bandaids until we can get this new system. This year, we’re asking for about $27 million. That’s this year’s installment. OPM had made an attempt in the past to try and come

up with a new system. They tried to build one from scratch. It

14

didn’t work. There was some money left after. We put it in the

bank, in effect. We were able to use that, plus this, plus some other

money that we think we will be able to get a good start on getting

this system in place. We hope by 2009 that we can have the new

system up and running.

In the meantime, we have been making some progress through

some of the basic process improvements in getting that wait time

down to getting a final accurate payment. But the ultimate answer,

that is, we’ve got to have this new system. We can’t keep using this

file system that we have today. It’s just not going to work.

Now let’s go to the next chart, if you can. The question is, it’s

great to have a plan, all these to-dos, visibility, but it doesn’t mean

anything if you can’t get these things done. We believe the American people and all of you expect us to get things done.

So the question is, how do we do that? One of the things—we

have it in a chart, and we’ve given you a copy—is that we have put

together a chronological list. Now this is the 2007 page, but I have

this starting from this month right on forward through the whole

5 years of this plan, is a chart that essentially says, for each

month, here’s what we’ve got to get done; next to that, not in your

copy but in my copy, who at OPM is responsible; and next to that

is a column that says the date that it was completed.

And this is my score card to make sure that everything gets

done, everyone knows what they need to get done, so it takes this

plan and puts it onto a tracking sheet. Now beyond that, each

member of the SES at OPM has these goals in their performance

contract. That means that every executive at OPM has their pay

on the line for getting these things done.

We can do that in the SES. We can’t do that through the rest

of the organization, as you know, but we can do it in the SES. That

means executive comp at OPM is tied to achieving the goals in this

plan. So that is accountability.

I have reviewed this with Comptroller General Walker, he said

it’s really pretty impressive to go from a plan to a tracking sheet

to how people are actually paid in their SES performance contracts.

Beyond that, it’s not just a stick issue; there’s a carrot to this.

We’re going to reward people. We’re going to congratulate them.

We have all kinds of ideas to keep the momentum going as we

achieve these goals.

There’s also obviously public pressure because people have this

plan; it’s visible. No one likes to be embarrassed. I certainly don’t,

and neither do the people in OPM. So they’re excited about getting

these goals done and showing that this kind of system can work.

Just two more quick charts. That’s the second half of 2007. We

couldn’t get it all in 1 year; there are so many goals.

Next to the last chart shows two areas that I want to highlight

for you that relate to legislative proposals that are in the President’s budget. One is, there’s a fix in there that we hope you will

take up that relates to a penalty in effect for people who want to

stay on in their government job on a part-time basis after they’ve

retired. We have many people, and I go around the country; I have

been to a dozen cities, talked to the Federal executive boards. People don’t want to go from working full-time to no time, in many

cases. They’d like to stay with the Federal Government. We’d like

15

to get the benefit of their knowledge and that knowledge transfer.

But they can’t do it if they’re in the CSRS without a penalty to

their pension. That’s a bad answer.

So there is in the President’s budget a fix for that. We hope that

you will be able to take that up and pass that.

The second thing is that we are looking to expand health care

options. I understand that there’s some concern about that, but we

believe that the Blue—first of all, half the people are under the

Blue Cross/Blue Shield system, and so we believe that those people

deserve the same choices that other people in the private sector

have, and the Blues offer these type of arrangements in the private

sector.

We believe people in the Blues who really want to stay with Blue

Cross and Blue Shield as they have for decades deserve to have

that option. So we are looking to expand to have that third option.

So I just want to finish up by saying as it says on this last chart,

we view this as a partnership. This is the largest font size I could

find to fit on the chart.

But we believe that our success is tied to the partnership that

we have with you. We can only accomplish the things that are in

this plan if we get the funding for them. We believe that it is a

tight budget year. It will be a challenge for us, but we believe that

the amount that is in the President’s budget will allow us to do the

things that are under this plan. We think they’re the right things

to do, and we believe that we can get that done.

So, again, we look at it as a partnership, and we’re glad to have

the opportunity, certainly I am, to visit with you today, and we’ll

make ourselves available in the future as well.

Thank you, Mr. Chairman.

[The prepared statement of Ms. Springer follows:]

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Mr. PORTER. Thank you very much. Before I get into the question-and-answer period, Mr. Cummings, would you like any opening comments today?

Mr. CUMMINGS. No, Mr. Chairman.

Mr. PORTER. Thank you. Very impressive. I appreciate that you

have set some pretty major goals, and you’re putting not only yourself but your employees in a position where performance is going

to have to happen, and I appreciate your goals.

I’d like to go back to the 28,000 file cabinets. As an example, you

mentioned having to search out information for retirees. How does

that work today? Literally their file can be in multiple places? How

does it work today?

Ms. SPRINGER. The starting point is the request that comes into

OPM from the agency where the individual is retiring from. Now

that person may have worked at three or four other different agencies and there may be a paper trail that follows them around. We

have some of the records, but there’s other information we need to

get from that final agency, and so until we get all of that information, then we can’t really start the process.

For the month of February, which is the last complete month I

have, we have about 11,000 or 12,000 cases where someone has requested a retirement calculation, but we’re still waiting on an average of 30 days for agencies to complete the information that we

need. So we can’t even start our part of it until we get that. But

there’s paper information that we have, paper information from the

agency.

Mr. PORTER. The Blue Cross/Blue Shield, of course, has been increasing substantially over the past 10, 15 years. Is it 50 percent

now?

Ms. SPRINGER. That’s right.

Mr. PORTER. Do you see that as a problem with one major carrier

that’s the bulk of the enrollees?

Ms. SPRINGER. I don’t see it as a problem, no. I think that certainly if you were talking about 80, 90 percent, you would have to

view that more of a monopoly situation. I don’t believe that the

Blue Cross/Blue Shield system even approaches that. In fact, it’s

made of, as you know, of local Blue organizations so it really isn’t

like it’s just one organization in the way we traditionally think of

it. So, no, I don’t find that to be a problem.

Mr. PORTER. Again, I think there is a lot of pleased participants.

I just wanted to have your perspective.

Ms. SPRINGER. There are choices throughout the country so it’s

not as if that’s the only choice that’s offered.

Mr. PORTER. The health benefit plan does a good job in competing or providing for competition to keep the premiums low and the

cost low for our employees. Are you able to do that soon with the

dental and vision plans, where we can maybe have some competition?

Ms. SPRINGER. We do hope to do that. We’ve had a request out

obviously for some time for people to—or for organizations to apply

throughout the country. We’re looking to regional carriers as well

as national carriers. We will be introducing the coverage in the

next open season, which will be in the latter part of calendar 2006.

Under the law, we had to get that done by the end of 2006.

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We believe there will be choice, and choice is what leads to—and

competition leads to cost containment. So that’s an important factor.

Mr. PORTER. This global economy also has global challenges, and

one of those is, as our work force, of course, is aging in certain

areas, a key component of retirement today in this economy is longterm care. It’s a huge challenge for our retirees.

Can you address plans for long-term care and those provisions

for employees as options?

Ms. SPRINGER. There’s no question that long-term care is important. I think it’s going to become increasingly important. We have

the aging of the population generally, in addition to the Federal

work force population and our own dependence. We believe we

have a good program. The carriers that we partner with on that,

John Hancock and, I believe, Met Life are leading carriers in this.

They have been in the forefront of this for many years.

So we believe we’re doing our due diligence with respect to providing strong plans and strong options to the Federal work force.

I believe we have more people in the Federal work force plans than

in any other—compared to any other employer in the country. So

people are, while it’s not large, it’s growing, and we’ve gotten good

response to it. It’s something we’re going to have to continue. It’s

very, very important.

Mr. PORTER. Do you think there is any way we can find additional incentives to help our employees to invest in a long-term

plan. Are there some other things to help. I mention that because

I see this as a critical part of retirement. If there’s anything else

we can do to get incentives to have the employees sign up.

Ms. SPRINGER. It’s an area that we need to continue to look at,

I agree with you. It’s got such—in addition to the individual level,

the economic value of having long-term care provisions in place is

just going to become more and more important.

Mr. PORTER. I’d like to, not necessarily today but in the near future, chat with you or someone with your staff and see what else

we can do to help encourage incentives to keep the costs reasonable. Again, I think it’s a priority for us.

Ms. SPRINGER. Glad to do that.

Mr. PORTER. Mr. Davis.

Mr. DAVIS OF ILLINOIS. Thank you very much, Mr. Chairman.

Madam Secretary, this is actually one of the most comprehensive

and most clearly delineated management tools that I have seen,

and I want to commend you and the agency for having developed

it.

Since there was no mention in your fiscal year 2007 budget, I’m

assuming that OPM does not intend to apply to the Centers for

Medicare and Medicaid services for the $1 billion a year employer

subsidy your agency is entitled to under the Medicare Modernization Act, since Federal annuitants receive drug coverage through

the FEHBP that is at least equal to the new Medicare part D benefit.

I also understand that you have said that the agency did not

need to take advantage of the subsidy since you did not intend to

significantly change the drug coverage Federal annuitants age 65

or older receive through that Federal Employees Health Benefits

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Program plan for the 2006 contract year. Why should OPM opt out

since the Medicare law does not require CMS to determine if employers applying for the subsidy would have retained their retiree

drug coverage with or without the payment?

And, finally, I have heard that OPM has said that you do not believe it is appropriate for the Federal Government to be paying

itself for this purpose. As you know, payments to OPM, unlike

other employers, would not result in new spending on the Federal

budget rules since they would not be spent outside the government.

Furthermore, such inter-governmental transfers are not unusual.

In fact, the Federal Government pays itself for the future retirement obligations when Federal agencies make contributions to

their own budget retirement trust on behalf of their employees.

If the government regularly pays itself for other purposes, why

not apply for this subsidy and use it to help mitigate costs in the

Federal Employees Health Benefits Program?

Ms. SPRINGER. The way OPM views it is that there’s a principle

involved with respect to that subsidy that we believe doesn’t apply

here, and that is that we believe that subsidy was intended to ensure that plans who might otherwise start to draw back from what

they would offer their employees would get that to help preserve

the level of benefits that they were being offered. As you say, we

have no intention of drawing back from that.

Now one could say that, why not still take advantage of it? And

in that case, we view it that it would be taking out of one part of

the government as you say and giving it to another. The FEHB

plan is heavily subsidized already from the employee standpoint

and so, again, both from the standpoint of the cost to the employee

and to the member, as well as to the preservation of our benefit

offerings, we just didn’t feel that it met that test and so we did not

elect to take advantage of it.

I know that there are some people who might say even with the

subsidy that you have, and even though you’re not planning any

cutbacks, you should still take it. If we were to do that, as you say,

from an overall Federal Government standpoint, it would be neutral because it would be taking from one part to another. So we

haven’t elected to do it, and we followed the principle that’s being

applied that we think when that was designed in the first place.

Mr. DAVIS OF ILLINOIS. Are you suggesting the annuitants would

be well covered without it, that there is really not the absolute

need?

Ms. SPRINGER. I don’t believe there is an absolute need, no.

Mr. DAVIS OF ILLINOIS. You also mentioned that, in the future,

we can look forward to getting rid of the part-time penalty. Would

you elaborate a bit on that?

Ms. SPRINGER. I’m sorry, could you repeat that?

Mr. DAVIS OF ILLINOIS. The penalty that——

Ms. SPRINGER. In the CSRS, yes. Currently, if I retire from the

Federal Government and if I were in the CSRS, which is the plan

in effect for employees hired before 1984, if I wanted to elect to

stay on on a part-time basis, the high three benefit calculation or

high three compensation salary calculation that leads to my benefit

would be adversely affected by that part-time service, the way it’s

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treated. So that would bring down the benefit that I would ultimately get when I fully retired.

So that is driving people away from part-time service if they

were covered by the CSRS. So this fix makes an adjustment to how

part-time service is counted.

Mr. DAVIS OF ILLINOIS. Thank you very much.

Thank you, Mr. Chairman.

Mr. PORTER. Not a question, but it’s a problem Nationwide where

we have a work force, I know the public employees in Nevada are

penalized if they come back in the system, and there are so many

folks out there that are talented and would like to remain part of

the work force and provide so much information and talent. I think

it’s great. We have to make sure that we continue not only in the

Federal program but other programs so there’s an incentive.

Congresswoman, do you have any questions?

Ms. NORTON. Thank you, Mr. Chairman.

I want to commend you as well, Ms. Springer, on laying out your

objectives. I ran a very troubled agency; when I came, it was troubled, and we put in place management by objective and held to it,

and it really is the only way to kind of monitor yourself.

Some of what you’re monitoring looks like it may be out of your

control. Let me ask you the status of the appeal from the district

court decision almost a year ago that threw out the collective bargaining regulations in the Department of Homeland Security system.

Ms. SPRINGER. Well, let me go back to how we deal with those

things in our plan. There are a couple of references in the plan to

personnel reform, and one specifically is DHS and to the DOD. We

are monitoring those, we’re holding ourselves accountable for monitoring the results to the extent that they move forward. We are

looking to, and there is specific language in here to build the case

for personnel reform, further reform.

Now the parts that have been most contentious of the two existing relate predominantly to the labor management sections, as you

know.

Ms. NORTON. You have two cases; you have two cases that—one

has thrown out the DOD’s new personnel regulations, and of

course, these were the two agencies that were before the committee

and where the changes were going on. And then another involving,

yes, collective bargaining. That was a wholesale throwing out of the

entire set of regulations.

Ms. SPRINGER. Yes. So with respect to those, and I can’t comment

actually on where we are with respect to appeals and things like

that.

Ms. NORTON. Wait a minute, I’m not asking—as I understood it,

the government—you can comment, seems to me, on the status of

the case. Has the Government appealed the collective bargaining

case to a higher court as yet?

Ms. SPRINGER. Not in DOD.

Ms. NORTON. I’m sorry?

Ms. SPRINGER. Not in the Department of Defense, I’m told. That

appeal to a higher court has not occurred in the Department of Defense case.

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Ms. NORTON. All right. The Department of Defense case involved

personnel regulations. If you haven’t appealed, the time for appeal—that involved something where the regulations—Mr. Chairman, you may remember, we had this very complicated hearing

where somebody in an effort to deal with the appeals processes

wanted to put everything together. It was extremely complicated.

One of them was labor relations. The labor relations sections, the

appeal sections. DOD regulations and all of the collective bargaining of Homeland Security regulations have now been thrown out by

district court. The labor relations ones were a total disgrace. They

simply collapsed everything into the chairman of the commission.

It didn’t have a ghost of a chance of surviving. But all of that was

predictable.

The reason I ask these questions is, if we’re going to get regulations and then everything is going to be on hold for years because

you’re in court, it doesn’t make much sense to issue such regulations. So what I want to know is both of these cases are old; one,

August 2005, the other, I don’t have the date in which it was decided. All I want to know is, is the department appealing these

cases or is it going back to the drawing boards to try to in fact conform to the court decisions?

Ms. SPRINGER. Let me answer that with two pieces. One is that,

in the case of DOD, while an appeal has not been filed yet, it’s

being considered.

Ms. NORTON. You mean, the time for appeal hasn’t——

Ms. SPRINGER. That’s a more recent one. There’s a little bit more

time for the DOD one. The DHS one has been appealed, I believe.

And there are some oral arguments next week. The lawyers handle

that.

Ms. NORTON. So, what, the present collective bargaining is in

place, or we’re on hold?

Ms. SPRINGER. The present one is continuing in place. But, if I

may, we had a hearing with this committee a few months ago

where we talked about the future of personnel reform, and given

what was going on with DOD and DHS, did that bear on our thinking for the future? One of the things that I remember having discussion when the comptroller general was here and his recommendation was to focus on the personnel, the pay parts, rather

than on the labor management parts. And so I think that was

something that several of you had thought might be fruitful, and

so in accordance with this plan, as well as that hearing, that’s an

avenue that we’re looking at as well.

We are continuing to work with the existing DOD and DHS as

those go through the courts, but we’re continuing to review and

build the case and see how we can make the business case, particularly with respect to the pay portion. And what I’m finding as a

validation for that type of thing is how that’s helping me to get our

things done, our plan done, because in the SES, at least I can tie

the actual goals to compensation.

Ms. NORTON. I’m very pleased that you’re working on the pay

parts. Perhaps—I can think of nothing more controversial that I

have ever heard in the committee than the notion that there would

be pay for performance but there were no regulations describing

26

how an employee would be notified in writing what was expected

of the employee whose pay would be conditioned on performance.

I have to ask you, particularly since you say you’re working, and

I’m very pleased to hear that, on the pay parts of the reform; are

you working on that particular threshold notion of notice to the employee in writing on how the employee is to be evaluated and pay

is to be therefore conditioned?

Ms. SPRINGER. The answer to that is, yes, and that’s nothing

new. That has actually been in our proposal. I feel very strongly

if someone won’t put it in writing what they expect of you, then

you should question why you’re working for that person.

Ms. NORTON. There was a huge defense given, and I don’t know

who it was, about why this wasn’t necessary, and it took a lot of

time of the committee.

Ms. SPRINGER. That is in the version that we put out last summer, that the requirements should be in writing, that they need to

be in writing. So, yes, that is important. I agree with you.

Ms. NORTON. Thank you very much.

Now let me ask a question about whether you intend—you say,

on page 8, implementation of Civil Service reform across the Federal Government monitoring report on demonstration projects at

agencies. We know there are all kinds of demonstration projects

going on. My question is, do you intend to implement the reforms

or the changes that were passed for DOD and for Department of

Homeland Security anywhere else in the Federal Government at

this time?

Ms. SPRINGER. There is no proposal right now like the DOD or

DHS proposal, other than the kind of straw man, if you will, that

we put out as a discussion piece last summer.

Ms. NORTON. There’s a great deal of anxiety in the Federal work

force about that. As I said in my opening statement, you really do

have a huge number of employees to figure this out with, and it

does seem that since you have the majority of the work force already, that ought to be enough for now, and then if there is to be

implementation, if you can show that this works, you would have

shown it because you have most of the people to show it on.

What is the average age of the Federal work force?

Ms. SPRINGER. I believe it is in the mid 40’s.

Ms. NORTON. I ask that question because I want to know why

you think that a work force of that age would—sorry, whether the

FEHPB, which has seen rising premiums, to much of our consternation and yours, for years, would benefit if in fact large sections of the work force, young and highly paid, were to opt for these

health benefit plans, and what condition do you think that would

leave the health benefit—the FEHBP in?

Ms. SPRINGER. First of all, with respect to the work force population, it’s a little bit of a barbell population, if you will. We have

a lot of people in the upper age group and we have been trying to

bring people in at the younger age group. I’d like to have people

at every age group come to the Federal Government.

Ms. NORTON. You got what you got.

Ms. SPRINGER. But we have a little bit of a barbell now.

Ms. NORTON. What?

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Ms. SPRINGER. A barbell effect, where we’ve got a lot at the

upper end, fair amount at the younger end, not quite as much in

the middle. I believe that choice is good, and limiting choice is usually not good. Now when you have as we have right now in the

Federal Government only a few options for that one type of the

high deductible, it’s only in a very few plans, then you can’t really

give a fair assessment in my opinion of what the response will be

and who will respond to it.

We have somewhere around 7,000 to 14,000 I believe people who

have responded. That’s a very small portion of a plan that covers

8 million people. So to draw conclusions just on that small sample,

I think is a little bit premature.

Ms. NORTON. Although we do know that they’re young and

among the highest paid.

Ms. SPRINGER. That’s true, but the fact is that most of the people

who might be interested from those other age groups are covered

by Blue Cross and Blue Shield.

Ms. NORTON. If what you want to do, if your answer to me then

is, premiums won’t go up, and choice is what we’re after, then you

need some kind of control group. And are you trying to get that.

Because so far that’s not what you have.

Ms. SPRINGER. I’m not saying the premiums will go up.

Ms. NORTON. Do you think premiums would not go up if substantial numbers of young and highly paid parts of the Federal work

force were to opt for health benefit plans. Do you not believe that

the premiums for everybody else would in fact go up?

Ms. SPRINGER. I don’t know. I don’t know for sure what that

would do. It would depend on who it was and——

Ms. NORTON. I have just said who it was.

Ms. SPRINGER. I understand who it was. That’s not necessarily

the case. There are different things that drive that, whether it’s

prescription drug use or whatever the procedures are and the cost

of those procedures. We care about costs. As a matter of fact, our

people negotiated a $700 million lower overall premium cost in the

2006 FEHB as a result of some pretty tough negotiations. So we’re

interested in cost, but I also believe choice is important. That’s a

state-of-the-art choice. And for us to not offer that in our largest

plans, I think is doing disservice to many people in the Federal

work force.

Ms. NORTON. Mr. Chairman, I don’t have another question. I’d

just like to ask Ms. Springer, and I appreciate your answers to

these questions, I’d like to ask you if perhaps you and I could have

a conversation concerning a bill that the chairman of the full committee and I have introduced involving what we can only believe

is an oversight and another one of those things that came long before you came, and that was in 1997.

That was in 1997 when the Federal Government took over some

District of Columbia functions, and those functions mostly had to

do with the criminal justice system. Included were some court employees who were—because the court system, they took over the

courts. They didn’t take over the implementation of that system.

Included were some court employees. These employees lost all the

time they had put in as public employees; and, of course, they lost

their annuity.

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The bill that the chairman and I—Chairman Tom Davis and I

had put in has nothing to do with the annuity and nothing to do

with the Federal work force in general, although these are Federal

employees for purposes of pay. In order—and it was done to relieve

the District government of great State costs that only the District

carried. It really does not involve the Federal work force as such

in any case. The chairman’s bill that I co-sponsor only would allow

employees to retain their time in service so that, for example, if

you retired—if you get to retirement age, you can retire.

We have employees, for example, who are close to retirement

age. Now they have to start all over again, so they have lost their

time.

I don’t think that OPM has anything to gain or—but there was

somebody in your Human Resources Department that apparently

there were negotiations with at the State level over a long period

of time, and those negotiations failed, and the chairman and I have

introduced a bill. I would like to be able to have a conversation

with you, rather than send my staff to talk to the Human Resources staff who could not see that the Federal Government had

nothing to lose by letting these employees who work for the D.C.

Superior Court retire on retirement age. We have people 60 years

old who have been told, well, you have to work 12 more years because you got transferred to the Federal Government, and I’m just

wondering if you would be willing to sit down with us.

Ms. SPRINGER. I would. I would be glad to do that.

Mr. PORTER. Chairman Davis.

Chairman TOM DAVIS. Thank you. Good to see you.

In 2004, as you know, Congress enacted legislation creating a

new dental-vision benefit. Proposals have been submitted, and

award is scheduled for late May. I think one of our intentions at

that point was that an option be available to Federal employees to

include a low-cost option such as a dental HMO. Is that coming,

do you think?

Ms. SPRINGER. I will check and get back to you on that, Mr.

Chairman.

Chairman TOM DAVIS. I think that is very, very important, as

they compete with their dollars for what they are going to do, to

have some benefit there in the low-cost range.

Telecommuting, this is an area where the Federal Government

continues to lag far behind the private sector. I go out to some of

the leading technology companies in the world out in northern Virginia, and their workers are able to telecommute from their homes,

from any kind of equipment they have, wherever they are in the

globe. They are not required to be there and punch a clock from

9 to 5, and they are some of the most productive workers in the

world. And yet, at the Federal level, we see ourselves floundering

at this.

Being a Federal employee is different than it was 100 years ago

when the Civil Service rules were written. When are we going to

get with the program and what do we have to do up here to spur

agencies on to allow some of their sophisticated employees to telecommute? Not only will this help the traffic in the region, it is a

lifestyle issue, but it’s a recruitment and retention issue. Some of

my staff—my staff director was telecommuting for 3 months after

29

her child was born and was just as effective. I wanted to keep her

here. I think we are losing good people sometimes because we don’t

show this kind of flexibility.

Ms. SPRINGER. Well, I couldn’t agree with you more. We do need

to do it. It is proven that it works. We, I think, are doing a good

job of convincing managers that it does work.

There was, obviously, a natural reticence to it. If you didn’t see

people in the office, there were people that felt that they didn’t

have control or accountability. That’s changing. So that’s the first

step. But we need to go beyond that. We need to make sure that

agencies are including that in their recruiting options.

As you know, in this particular plan one of the career patterns

that we are establishing is for remote employees. So if someone

wants to get up at 4 a.m., and work from their home for the Federal Government, that’s fine. We want that person. Not only should

we say, well, we can accommodate that, we should go out and look

for that person if they are going to be a good worker for the Federal Government. And that involves telecommuting.

And I would go further to say that it’s even more and more a requirement as we plan for the potentiality of possible pandemics or

other types of events where maybe there might be a period of time

where people do have to work from a remote location. So I would

say there is even more of an urgency today than we’ve had in the

past to make telework an important component of our employment

structure.

Chairman TOM DAVIS. I agree with that, and I just think we are

missing the boat in so many ways. We recently changed the law

so that Federal contractors are allowed to charge the government

for time their workers are telecommuting. They don’t have to be in

the office 9 to 5 to do that. And you find some of the most productive workers. When you are home, the phones aren’t ringing around

you. If you have to leave in the middle of the day for a doctor’s appointment or your kid’s school play or something like that, it’s a

lot easier. You can be more productive. It can be abused, and I recognize that as well. But we have to be able to work out some guidelines to enable these agencies to allow their employees more opportunities to telecommute. I think it will lead to more productivity if

it’s done right.

Ms. SPRINGER. I agree with you.

Chairman TOM DAVIS. The Federal Government is notoriously

slow and inefficient in its hiring. We have to have a better hiring

process. Can you explain how you plan to reduce the time required

to hire an employee down to 45 days or less?

Ms. SPRINGER. Well, we’ve had an ongoing effort with that. We

are monitoring how well we’re doing, and it’s been uneven. One of

the pieces to that is not just that you get to the point of processing

and arriving at a decision but to let people know what the decision

is. We have hundreds of thousands of people who apply for the

jobs. Let’s say 1,000 people apply for a given job, and 1 person’s

accepted. We don’t get back to the 999. So that hurts our reputation for anyone who might want to apply a second time or a third

time for another job.

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So one of the things that’s in this plan is a requirement that

agencies will notify all applicants of decisions at the end of that 45-

day period. That’s a requirement.

We are also asking and putting into place for managers and applicants to fill out a very brief 10 or 12 question survey on how the

process went. What can we learn? Did managers get everything

they needed to make that decision quickly? Did applicants get everything they needed, or were we easy to deal with?

We are also trying to get more and more of our positions that are

available up on USAJOBS. USAJOBS is a good tool, but it’s not

used to the fullest extent yet by all agencies. So we’ve got a goal

in here to have their position requirements conform to the

USAJOBS structure so that it can get put up on there and have

broader access. That will allow for a more timely process for going

through the whole application and decision.

So those are some of the steps in addition to what we are already

doing.

Chairman TOM DAVIS. Thank you very much.

Mr. PORTER. Thank you.

Mr. Cummings.

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

Director Springer, just a few questions. Right now, if we were

trying to sell the Federal Government to young people and they

said, well, what’s the advantage, Director, of me coming into the

Federal Government as opposed to going into private industry,

what would be your best pitch?

Ms. SPRINGER. If I were doing that today, I would say that you

can come to the Federal Government and do almost anything you

want to do. If you don’t know yet what you want to do in your career, if you come to work for us and you change your mind, you

are still in the same system of opportunities. You can go to anyplace you want. If you want to get into science and research, fine,

we can do that for you. If you want to become an engineer, that’s

great. If you want to find a cure for cancer, we’re big enough to

give you the funding to do it. If you want to clean up the Everglades, that’s great. If you want to work in a park, we can do that

for you. Anything that you want to do in your career, you can do

with the U.S. Government; and, at the same time that you are

doing that, you are serving your country and other people. So it is

really fulfilling, and it’s a great place. You can do anything you

want.

Mr. CUMMINGS. And if they said in response to what you just

said, ‘‘I notice that there is a 2.2 percent raise. I think I can do

better than that perhaps in private industry,’’ what would you say?

Ms. SPRINGER. I’d say that, first of all, that 2.2 percent is tied

to an index. So we think that keeps it competitive. But what we

are going to do in this budget, the President has proposed that we

should be able to start to look occupation by occupation and see if

we need to do some special adjustments to make sure that we are

competitive.

Mr. CUMMINGS. And if they said, ‘‘When are you going to do that?

Because my life is going by. I am about to get married, and I want

to have children, and I need to have some kind of a way to plan

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my future’’—and let me give you the rest of it—‘‘and I know how

slowly the Federal Government works.’’ That’s it.

Ms. SPRINGER. If you are getting married and you are thinking

of having children, then one thing you are really thinking about,

in addition to just your salary, is your health benefits. You want

to get with an organization that has good health benefits. You are

going to get with an organization that’s going to let you plan for

the future. Companies today out there, you have no assurance

they’re going to keep that health benefit program or that you are

not going to have to pay. We pay 70 percent of the premium. Not

only that, we have a great retirement for you to start to be planning on. Not only do we have a defined benefit plan, we also have

our equivalent of a 401(k). You are lucky to find either one of those

in the private sector.

So I am glad you care about your family, because we care about

them, too; and that’s why we’ve got a great benefit structure. The

salary part is competitive, and we are making it even more competitive. Do you want a job?

Mr. CUMMINGS. That’s pretty good.

Now what happens when they say, ‘‘I notice that the increase has

been 3 percent over the last several years, and it looks like we are

dealing with 2 percent and 2.2 percent now. Why should I have a

lot of optimism about this pay raise situation?’’

Ms. SPRINGER. Well, if it turns out that—we think 2.2 is in line.

But if it turns out that it’s not, the U.S. Congress will take care

of it for you.

Mr. CUMMINGS. But—OK. Let’s talk about that 2.2 percent. We

have tried to have some kind of equity between the military and

the civilian population, is that right? And this is a part of all of

that?

Ms. SPRINGER. Yes.

Mr. CUMMINGS. But we are also going down, am I right, as compared to in the past, the pay raises?

Ms. SPRINGER. It’s a lower percentage.

Mr. CUMMINGS. And that is because of the overall budget situation?

Ms. SPRINGER. Well, it’s not so much as that it is tied to an employment cost index. That’s what we look at. If that employment

cost index had been higher, then it would have been a higher proposal in the budget. But the idea is that we are trying to preserve

the relative position of the Federal Government in the labor market. We don’t think we lose ground if we can stick to that index.

The index happened to be lower.

Mr. CUMMINGS. And the locality based payment, how does that—

in the past—where does that money come from?

Ms. SPRINGER. The locality-based portion is—that’s part of the

2.2.

Mr. CUMMINGS. That’s part of the 2.2.

Ms. SPRINGER. Mm-hmm.

Mr. CUMMINGS. And that has always been a part of the 2.2?

Ms. SPRINGER. Yes.

Mr. CUMMINGS. So you said to that employee—I see my time is

up. I do want to ask you this last question, though.

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Ms. Norton was asking you a question about the health insurance situation and this high-deductible situation. And you have—

you described your work force as one like a barbell. That means

we’ve got a few people in the middle, is that right?

Ms. SPRINGER. Less in the middle. Yeah.

Mr. CUMMINGS. So we’ve got the high-deductible folk at the one

end, and they are paying a lot of money, and they are basically,

I guess, probably the younger folk because they are not so much

worried about having to pay that deductible. Is that a reasonable

assumption?

Ms. SPRINGER. There are some people that will react that way.

Mr. CUMMINGS. Well, what have been your findings? Have you

done any research on that?

Ms. SPRINGER. It’s limited so far. Because we’ve, first of all, only

offered this recently. And, as I said, it was either 7,000 or 14,000

people, which is a very small subset of the whole 8 million that are

covered in the plan. So we are still studying it. GAO has issued the

first report on it. And it is true that younger people have made up

a greater portion of those who have been attracted to it. It remains

to be seen whether or not that will continue to be the case as it

is offered more broadly.

Mr. CUMMINGS. And the GAO report talks about insufficient information being given to the employees to make a decent decision.

You are familiar with that, are you not?

Ms. SPRINGER. I’ve heard it. Yes.

Mr. CUMMINGS. Well, I hope you’ve more than heard it, because

that’s a big deal. Because I think the same person that I talked to

you about a little earlier would be concerned about that whole

issue of having sufficient information to make a decision for the

family. And, you know, you talk about how concerned the Federal

Government is about them. I think it would be a sad day when

somebody goes to try to get the information that you need to make

a decision—any of us—to make a decision, and the GAO, which I

have a tremendous amount of respect for, comes back and says:

These people are trying to make a decision for their families. A lot

of these people are young people planning to have families. And

then they look and come to find out they don’t have sufficient information.

I guess what I am asking you is you are the person who has

the—you carry a lot of weight—I am almost finished, Mr. Chairman. You carry a lot of weight. And I believe that if you said, look,

there’s something wrong with this picture, insurance companies,

we in the Federal Government want you to give our people sufficient information so that they can make decent decisions. I think

just you saying that, if you haven’t already said it, would make a

phenomenal difference.

As my pastor always said, he says: Words can create. And I believe that the next time GAO looks at that, after you have said

these words that create a better circumstance for those Federal employees to select, then that won’t be a part of the report.

Ms. SPRINGER. Well, I agree with you. The next time GAO does

look at that, that won’t be a part of the report. We, I think, historically have done a good job on education. To the extent that we need

to do a better job on this piece of it, we are going to do it.

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One of the things, incidentally, that’s in this plan—I’ll just take

a second—is that we are trying to—and starting with this call letter that goes out right now for the carriers of the next season—is

to ask them to give us more transparency, particularly with specific

procedures. So that if you are trying to make a decision, well, on

an appendectomy—if we know that an appendectomy costs this if

we go this way or this if we go this way, that will help allowed for

more informed choices.

So I agree with you 100 percent. That won’t be there in the next

GAO report.

Mr. CUMMINGS. Thank you very much.

Ms. SPRINGER. Thank you.

Mr. PORTER. Thank you very much. We appreciate your testimony today.

I’d like to leave a couple thoughts. One, regarding more information and health technology. And I appreciate your help at least in

partnering with us with that language where my bill has to do

with information technology. I understand we are trying to make

it as transparent as possible for the employees, and I appreciate

your help.

Twofold. What I would like to work on, whether it is in a comprehensive bill, those that you’ve mentioned, or free standing, two

areas that I am very concerned about, one is long-term care, as we

mentioned, looking for some initiative there. But also a priority is

the part-time piece, and we have to make sure that we address

that nationwide and even in the private sector and local governments to make sure we can encourage those—especially those

areas of significant need from teachers across the country to Federal employees.

There is such a wealth of talent in our retirees that would like

to remain in the work force, and I would like to spend a little bit

of time understanding why the scoring is the way it is, and not for

today but in the future, so I can better understand if it is an actuarial question or if it’s a policy question or an administrative question. I would like to find an incentive to allow our Federal retirees

or soon-to-retire and even the private and local government sector

to be able to stay in the work force.

Ms. SPRINGER. Glad to do that.

Mr. PORTER. And I am also looking forward to the garage sale

when we sell all those cabinets. That’s 28,000 cabinets. So let me

know when that is.

Ms. SPRINGER. Will do.

Mr. PORTER. Thank you very much for an outstanding hearing.

The meeting is adjourned.

[Whereupon, at 11:30 a.m., the subcommittee was adjourned.]

[Additional information submitted for the hearing record follows:]

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