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RETIREES RETURNING TO THE RESCUE: REEMPLOYING ANNUITANTS IN TIMES OF NATIONAL

NEED

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

JULY 25, 2006

Serial No. 109–235

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

BRIAN P. BILBRAY, California

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

LAWRENCE HALLORAN, Deputy 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

SHANNON MEADE, Professional Staff Member

ALEX COOPER, Clerk

TANIA SHAND, Minority Professional Staff Member

(III)

C O N T E N T S

Page

Hearing held on July 25, 2006 ............................................................................... 1

Statement of:

Fallis, Charles, president, National Active and Retired Federal Employees Association; and Duncan Templeton, national legislative vice president, Federal Law Enforcement Officers Association ................................ 55

Fallis, Charles ........................................................................................... 55

Templeton, Duncan ................................................................................... 65

Kichak, Nancy, Associate Director for Strategic Human Resources Policy

Division, Office of Personnel Management; Patricia Bradshaw, Deputy

Under Secretary of Defense, Civilian Personnel Policy, Department

of Defense; Barbara Panther, Associate Deputy Assistant Secretary

for Human Resources and Management, Department of Veterans Affairs, accompanied by Donna Schroeder, Director, Compensation and

Classification Service, Department of Veterans Affairs; and Ronald

Sanders, CHief Human Capital Officer, Office of the Director of National Intelligence ......................................................................................... 13

Bradshaw, Patricia .................................................................................... 21

Kichak, Nancy ........................................................................................... 13

Panther, Barbara ....................................................................................... 34

Sanders, Ronald ......................................................................................... 42

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

Bradshaw, Patricia, Deputy Under Secretary of Defense, Civilian Personnel Policy, Department of Defense, prepared statement of ....................... 25

Cummings, Hon. Elijah E., a Representative in Congress from the State

of Maryland, prepared statement of ............................................................ 76

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

of Illinois, prepared statement of ................................................................ 11

Fallis, Charles, president, National Active and Retired Federal Employees Association, prepared statement of ....................................................... 57

Kichak, Nancy, Associate Director for Strategic Human Resources Policy

Division, Office of Personnel Management, prepared statement of .......... 16

Panther, Barbara, Associate Deputy Assistant Secretary for Human Resources and Management, Department of Veterans Affairs, prepared

statement of ................................................................................................... 36

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

Nevada, prepared statement of .................................................................... 7

Sanders, Ronald, CHief Human Capital Officer, Office of the Director

of National Intelligence, prepared statement of ......................................... 45

Templeton, Duncan, national legislative vice president, Federal Law Enforcement Officers Association, prepared statement of ............................. 68

(1)

RETIREES RETURNING TO THE RESCUE: REEMPLOYING ANNUITANTS IN TIMES OF NATIONAL NEED

TUESDAY, JULY 25, 2006

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON FEDERAL WORKFORCE AND AGENCY

ORGANIZATION,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The subcommittee met, pursuant to notice, at 2 p.m., in room

2247, Rayburn House Office Building, Hon. Jon C. Porter (chairman of the subcommittee) presiding.

Present: Representatives Porter, Schmidt, Davis of Illinois, Norton, and Cummings.

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

deputy staff director/chief counsel; Jessica Johnson, OPM detailee;

Shannon Meade, professional staff member; Alex Cooper, legislative assistant; Tania Shand, minority professional staff member;

and Teresa Coufal, minority assistant clerk.

Mr. PORTER. I would like to bring the meeting to order. We are

going to continue on an initiative that I began last week that is

recognizing some unsung heroes that are part of the Federal family. But unlike last week’s recipient, today we are going to pay tribute to Mr. John Euler, who is connected to us via satellite from his

duty station in Iraq where I understand it’s about 10 p.m.

We appreciate you being with us.

Mr. Euler is a Vietnam veteran and retired U.S. marine; went

on to a distinguished career at the U.S. Department of Justice from

which he retired after 26 years of service. But his sense of duty

could not allow him to stay retired. In January 2004, he volunteered to go to Iraq, where he served as Director of International

Council. Here he faced the daunting task of building a new legal

system for the country from the ground up. He overcame the loss

of legal records destroyed by war, established a new court system,

and helped Iraq defend itself in over 70 international cases.

He returned home upon the completion of his mission, but his

strong passion for public service overcame his personal interests,

and he recently volunteered again to return to Iraq where he is

serving as deputy legal counsel for the U.S. Embassy.

Mr. Euler’s bravery, his compassion and his dedication are an inspiration for all of us, and it is a privilege to say thank you.

2

Mr. Euler, I am not sure of the time lag if you can hear OK. But

again, I want you to know that there is about a 5-second delay

from what I say to you reaches Iraq.

But again, I want to say thank you very, very much for your

dedication to the Federal Government; more importantly, your

dedication to every man, woman and child in this country. So it is

the least that I can do to honor you in a small way as a Member

of Congress we are able to place into the Congressional Record individuals that we think exemplify the great American spirit. So I

have entered into the record your history and those things that you

have done to make our world and our country a safer place, and

we will be getting you a copy of the statement of the Record which

is dated July 25, 2006. And I do believe that with us today, Jerry

is going to be accepting the plaque on your behalf.

So, John, congratulations, and again thank you for all that you

have done for the United States of America. Thank you.

Mr. EULER. Mr. Chairman, I want to thank you very much for

this honor. I am very honored and gratified, and particularly thank

you and the subcommittee for this wonderful initiative in recognizing some of the contributions of Federal public servants.

I think that one of the significant and good stories and untold

stories about Iraq are the thousands of public servants who have

indeed volunteered to come over here to help try to develop this democracy and the freedom of this new nation, and I think several

people have probably come in to the government just to do that

kind of mission because they are inspired by the challenge and the

promise. So I want to thank you again, and really I accept this

tribute and this recognition on behalf of all of them. So thank you

very much.

The CHAIRMAN. Thank you.

Mr. Davis.

Mr. DAVIS OF ILLINOIS. Thank you, Mr. Chairman. Let me just

commend you, first of all, for your creativity and sensitivity in initiating and implementing this program. I, like you, feel that far too

often there are many individuals who contribute significantly to the

further development of our country, and indeed to our world, who

go unrecognized. So I join with you in recognizing the contributions

of Mr. Euler and also praise him for being willing to come out of

retirement to go into obviously a dangerous, in many ways, situation, and yet continue to give of himself in such a way that he uses

his experiences and all of his ingenuity to try to help make not only

Iraq, but the world a better place in which to live. I commend you,

Mr. Euler.

I thank you very much, Mr. Chairman, and commend you for

your creativity.

Mr. PORTER. And understanding that you are just a few miles

away from home, we would like to make this presentation to a

friend of yours. Jerry is here today. I would like to make the presentation to Jerry.

I’ll come down there, Jerry. I don’t know if you can see us from

here, John, but we could probably make this a roast. Maybe there

are some things that you need to know.

Mr. SHAW. I would be happy.

3

Mr. PORTER. Jerry wants to say a few things, so maybe there are

some stories you can share with us. Is there anything you want the

say about John?

Mr. SHAW. Well, besides being a great marine and a great public

servant, he is also a great minister of his church. He is a leader

that all of us have looked up to for years, and other than being a

marine, he is probably the most intelligent, well-adjusted one we

have ever met.

So, John, congratulations to you. It’s an honor to be able to accept this award on your behalf. Thank you very much.

Mr. EULER. Thank you, Jerry, and thank you very much, Mr.

Chairman.

Mr. PORTER. Before I begin the hearing, there are a few folks

that I would like to thank that have worked very hard to put this

satellite connection in place. We have Mr. Bill Bransford; Mr.

Mitch Herckis of the Senior Executives Association; staff of the

State Department including their video conference coordinator Sandra Bruckner. I thank you very, very much; and, of course, our own

staff here at Government Reform Committee, and I appreciate all

that has gone into this today.

Again, we are here today to actually talk about something that

probably is very appropriate. John, you are welcome to stick it out

for a couple of hours and listen if you would like, but it has to do

with encouraging folks to be able to return from retirement to Federal service, so that is what today is all about. Again, I know you

are a few miles away, but again, thank you very much for your

time.

Mr. EULER. Thank you, Mr. Chairman. It is 10:30 at night here.

So with your kind permission, I think I will let these good folks

who have helped so much be on their way as well. I want to thank

all of you and all of the subcommittee. This is a great honor.

Mr. PORTER. You can take the rest of the day off. No problem.

Retirees returning to the rescue: Reemploying annuitants in

times of national need, and again, I would like to thank everyone

for being here today on this all-important topic.

All too often Federal Government loses experience in highly

qualified retirees not just to quiet, private life, but to the private

sector where they get their full earned annuity, and many times,

top salary. Work shortages highlight the need for management

flexibilities that permit agencies to bring back the right people to

fill an important need. We don’t have to look further than to recover from Hurricane Katrina last year to demonstrate how important it is to deploy experienced Federal employees without delay in

times of national crises. In the final report of the House Select Bipartisan Committee to Investigate the Preparation for and Responses to Hurricane Katrina, ‘‘A Failure of Initiative,’’ the committee found that both the Department of Homeland Security and the

Federal Emergency Management Agency lacked adequate training

and experienced staff for the Katrina response.

We are here to today to examine whether existing flexibilities are

enough to bring back valuable retirees to Federal service in a timely manner to fill voids, and whether additional flexibilities should

be established that allow experienced Federal employees to phase

into part-time service without negatively affecting our annuity so

4

we don’t unnecessarily incentivize them to leave government service prematurely.

There has been much attention given lately to the anticipated retirement wave which is projected that roughly 60 percent of the

Federal work force is eligible to retire in the next 10 years. The

baby boomer trend seems to be that many of those Federal annuitants return to work past retirement, and I would hope that the

Federal Government would be their Federal—be their employer of

choice. The Federal Government has lost and will continue to lose

our more seasoned employees. Perhaps more can be done to facilitate a return to Federal service by retirees in times of national

need.

There are several provisions under the law that allow annuitants

to be reemployed in the Federal sector; however, several barriers

exist. There is evidence that the current law on reemployed annuitants is not accommodating the national need or not being implemented wisely. One problem associated with reemploying annuitants is even being felt in my home district of southern Nevada

and in Las Vegas where we are fortunate to have a quality veterans hospital. Unfortunately, this VA hospital is facing a nursing

shortage. To counteract this shortage, the VA hospital has contracted with staffing companies that recruit licensed nurses on behalf of the hospital.

Considering these conditions, I want to relate a story of how our

current system of reemploying retired annuitants is hurting the

Federal Government. A nurse in my district retired from the VA

and began receiving her annuity. After a few years of retirement,

this woman felt that she had more to offer, and, hearing of the

nursing shortage, attempted to return to the job at the hospital.

Unfortunately, because she was receiving her annuity payments,

she was discouraged from returning to work because her salary

would be offset by the amount of her hard-earned annuity.

Not easily thwarted, this determined woman contacted a private

staffing company that had a contact with the VA hospital, and because of her immense experience and talent, was immediately

hired and placed back in the veterans hospital.

Now on the surface this may seem like a logical solution. However, the woman earned $35 per hour as a Federal employee. The

bill rate to the hospital from the staffing company was $55 per

hour for the exact same service she performed 2 years prior, and

she could continue to receive her annuity. In a time when the nursing shortage was at its most critical.

If the hospital had returned her to service and requested a waiver so she could receive both the full amount of her annuity and salary, the government could have saved $20 an hour, or it should

have made an extra $20 going to the employee. In addition to the

savings in salary, the government would save by hiring a retired

nurse because the hospital would not have to make any additional

retirement contributions and would avoid the training cost associated with hiring a new employee.

This is just one example that highlights where there is a need

for enhanced flexibilities to reemploy annuitants and for a greater

willingness to recognize retirees as truly valuable human capital

resources.

5

Another example, just 2 weeks ago I had an opportunity to travel

to Nogales, Arizona, to visit the border between Arizona and Mexico. I met an individual who is in the Border Patrol that is soon

going to have to retire, who specializes in technology as a law enforcement agent. His hobby and background is technology. Well, as

we traveled and visited the border security, the very law enforcement officers that are charged with protecting our borders are

changing tires, are building fences, are repairing vehicles because

we have a shortage of staff on our borders between here and Mexico. So the very same people that we would want to spend time in

law enforcement are literally having to repair vehicles.

Now, on the surface that doesn’t seem like a bad idea if, in fact,

we had plenty of people that were available. But we don’t. This individual literally is being forced to retire, would like to come back

and stay in the system and do some of the clerical work that currently law enforcement agents are having to do because of a shortage. That is just another example.

Another example is the option that was available to former retired Federal agents to return to work for the Federal Government

as Federal law enforcement instructors. Under the first scenario,

the former Federal agent receives her regular salary minus the

amount of her annuity. The result of this reemployment system is

that it is difficult to attract and retain Federal law enforcement

personnel most experienced in working in the Federal law enforcement system to be Federal law enforcement instructors. Contrast

this with a former retired State or local law enforcement officer

who takes the same Federal law enforcement instructor position

and continues to receive his or her State or local retirement with

no penalty.

Under the second scenario, a former retired Federal agent returns to work for the Federal Government as a Federal law enforcement instructor with a waiver of the offset requirement. This

former Federal agent receives both her annuity and salary while

teaching. She brings to her new employment 20-plus years in Federal law enforcement experience and training. Added to her career

as a Federal law enforcement officer is the teaching, training and

experience gained over the 4 years as a Federal law enforcement

instructor. However, this highly trained and experienced Federal

law enforcement instructor has to leave the job when her 4-year

limited appointment comes to an end.

At present, the effect of this restriction is to discourage America’s

most qualified former Federal law enforcement officers from returning to Federal service. It is an unnecessary loss of potential

antiterrorist resources at a time of war, and in these troubled

times it seems logical to want our best and brightest in the field

of law enforcement and intelligence to be readily available to assist

in areas of critical need. Unfortunately, many of our best and

brightest are already retired or quickly nearing retirement age.

Seasoned Federal employees on the brink of retirement have

much to offer: Incomparable technical skills, vast institutional

knowledge, wisdom, maturity, and a principled commitment to public service. In a market where we are competing with the private

sector for limited talent and expertise, we must not ignore those

experienced professionals that are eager to work longer in partVerDate 11-MAY-2000 10:09 Nov 12, 2008 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 C:\DOCS\34772.TXT KATIE PsN: KATIE
6

time service or come out of retirement and lend their expertise to

the Federal Government.

So to address the current unintended adverse effects on employees who perform part-term service at the ends of their careers, and

to eliminate a disincentive for employees nearing the end of their

careers who would like to phase into retirement by working parttime schedules, I will be introducing legislation as proposed in the

President’s fiscal year 2007 budget that would allow agencies to

keep senior staff on board as part of a succession planning effort.

This is a much needed fix that has been a long time coming.

As you know, there was a day when 55 was the goal, or 65 was

the goal for retirement. Literally today 65 is not unlike 55 of decades ago. So I really believe that we need to encourage and find

incentives for our soon-to-retire or those who have retired as a way

to get back into the Federal system. We need their talent. We need

their abilities.

So having said all of that, again, I want to thank you all for

being here.

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

7

8

9

10

Mr. PORTER. I would like to recognize our ranking minority member, Mr. Davis.

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

and as one who is approaching the age, I want to thank you for

calling this hearing.

Under the current law, a retired Federal employee who is reemployed by the Federal Government may not simultaneously receive

a Federal retirement annuity and a Federal salary. The Civil Service Retirement System and Federal Employees Retirement System

of title 5 stipulate that the Civil Service Retirement and Disability

Fund annuity amount a reemployed Federal employee receives

shall be deducted from his or her pay.

There are exceptions to this regulation. In cases of emergencies

that pose an immediate and direct threat to life and property or result from unusual circumstances, the Office of Personnel Management has the authority to grant waivers to the dual compensation

ban on a case-by-case basis or to delegate waiver authority to agencies.

Federal agencies should be able to hire Federal retirees without

penalizing retirees; however, we must understand the impact of the

reemployment of annuitants on new hires and whether or not agencies are effectively using human capital strategies to ensure that

they have a work force in place to accomplish the goals and missions of the agency.

I hope that the witnesses today will be able to provide us with

insight on these matters related to reemployment of retirees, and

thank them for taking the time to testify before this subcommittee

about this issue.

I thank you, Mr. Chairman, and yield back the balance of my

time.

Mr. PORTER. Thank you, Mr. Davis.

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

11

12

Mr. PORTER. Congresswoman.

Ms. NORTON. Well, Mr. Chairman, I appreciate this hearing. We

are presented with an unusual situation, it seems to me. Federal

employment is not what it was when we were young and foolish.

And, therefore, many of the best and brightest—I am speaking for

myself, Mr. Chairman. I understand that you are both still young

and still foolish, and I won’t tell you which of those I still am. But

seriously, Mr. Chairman, the competition for the very highly qualified Federal work force that we have on board now not—is awesome, so awesome. There is every incentive to leave early with

early retirement, not to mention the many employees who came in

at the prime of their careers and are leaving already for usual retirement. Then let us take the new group of young people for whom

Federal employee is one of many options, and very, very often not

the most attractive when you consider all the career options and

other benefits that come with Federal—with private employment of

very highly skilled, often rarely skilled people.

So as we look now at what amounts to a mixed message, yes, we

will hire you under some circumstances, but at the same time we

are going to penalize you through your annuity. We have to somehow come to grips with what is our message. Do we want to be able

to hire these Americans who once worked for the Federal Government? When you consider the skill levels and occupations of many

of them, I think the answer would be clear. We certainly have to

look at the total picture. But as we look at the baby-boom generation and how huge it is, and how many of them were a part of the

best and the brightest Federal work force we have ever seen, and

see them offload often not to go home, but to go to work somewhere

else, we have to be very, very clear when we need them and how

we attract them.

That, I think, is as much a problem as anything, particularly in

occupations where I would be most concerned. And those are occupations where it is easiest for the trained Federal employees, people in whom we have heavily invested, to leave an occupation

where we would want under some circumstances at the same time

to have an annuitant reemployed because of the scarcity of labor.

So I think what we have now before us, for most agencies at

least, is a product of the old Civil Service, and among these things

we have been trying to do in this, you know, double dipping and

making sure that we make room for new people. What new people?

New people that we still are not attracting in nearly the same levels and in nearly the same occupations as we once did. And we

have to look with fresh eyes at the annuity question especially

when we consider some of the occupations involved.

Look at the DOD experience, and I think of a governmentwide

policy on particularly what to do when we need people and how to

attract them and how to make it possible for them to make a decision that is consistent with their own future and consistent with

the needs of the Federal Government.

So I thank you, Mr. Chairman, once again.

Mr. PORTER. Thank you very much. And I understand since you

are 29, there is a long time before you have to worry about that.

Ms. NORTON. I’ll take that.

Mr. PORTER. Thank you very much.

13

The first thing I would like to do is some procedural matters, and

ask unanimous consent that all Members have 5 legislative days

to submit written statements and questions for the hearing record.

Any answers to the written questions provided by the witnesses

will also be included in the record. Without objection, it is so ordered.

I ask unanimous consent all exhibits, documents, other materials

referred to by the committee members and the witnesses may be

included in the hearing record; all Members be permitted to revise

and extend their remarks. Without objection, so ordered.

And as I think most of you know, it is the practice of this committee to administer the oath. I know you wanted to do it earlier,

but I thought you could rest for a little bit. So would you please

stand.

[Witnesses sworn.]

Mr. PORTER. The record will reflect that all have answered in the

affirmative.

Now we have the first panel. They will begin today. As you know,

you have approximately 5 minutes, and, of course, you can add

fuller statements to the record as you wish.

And again, I know some of you are experienced at the committee

process. Some of our Members will probably come and go because

of different hearings. So understand that all information is made

available to all of those Members.

On our first panel today we have Nancy Kichak, Patricia Bradshaw, Barbara Panther and Dr. Ronald Sanders.

Ms. Kichak is Associate Director for Strategic Human Resources

Policy Division at the U.S. Office of Personnel Management. Mrs.

Bradshaw is the Deputy Under Secretary of Defense for Civilian

Policy and Personnel with the Department of Defense. Ms. Panther

is Associate Deputy Assistant Secretary for Human Resources and

Management with Department of Veterans Affairs, and Dr. Sanders is Chief Human Capital Officer for the Office of Director of National Intelligence.

So again, welcome. We appreciate you being here.

Ms. Kichak.

STATEMENTS OF NANCY KICHAK, ASSOCIATE DIRECTOR FOR

STRATEGIC HUMAN RESOURCES POLICY DIVISION, OFFICE

OF PERSONNEL MANAGEMENT; PATRICIA BRADSHAW, DEPUTY UNDER SECRETARY OF DEFENSE, CIVILIAN PERSONNEL POLICY, DEPARTMENT OF DEFENSE; BARBARA PANTHER, ASSOCIATE DEPUTY ASSISTANT SECRETARY FOR

HUMAN RESOURCES AND MANAGEMENT, DEPARTMENT OF

VETERANS AFFAIRS, ACCOMPANIED BY DONNA SCHROEDER, DIRECTOR, COMPENSATION AND CLASSIFICATION

SERVICE, DEPARTMENT OF VETERANS AFFAIRS; AND RONALD SANDERS, CHIEF HUMAN CAPITAL OFFICER, OFFICE OF

THE DIRECTOR OF NATIONAL INTELLIGENCE

STATEMENT OF NANCY KICHAK

Ms. KICHAK. Mr. Chairman and members of the subcommittee,

I appreciate the opportunity to represent the Office of Personnel

Management and Director Linda Springer for this discussion of

14

how retirees might be used to assist the Federal Government in

times of national need.

Reemployed annuitants can and do make major contributions to

ensuring that the vital work of the Federal Government can be carried out effectively. As you mentioned in your opening statement,

the demographics of the work force show that approximately 60

percent of the government’s 1.6 million white-collar employees and

90 percent of the 6,000 Federal executives will be eligible for retirement over the next 10 years. OPM is working closely with Federal

agencies to assure that if its valued employees choose to retire, the

work of agencies can continue uninterrupted.

We have worked with agencies to develop sound human capital

strategies including work force planning, succession planning and

leadership development. The steady focus on the strategic management of human capital is helping agencies identify and close skill

gaps, meet mission needs and plan for the future.

Despite the best planning efforts, there are times when the services of the men and women who have retired from the Federal

work force are needed to increase work force effectiveness. Currently agencies other than the Department of Defense may rehire

an annuitant at any time with the salary offset. Under limited circumstances, non-DOD agencies may request a waiver to the salary

offset. The statute provides that OPM may grant a waiver to agencies faced with emergencies, exceptional difficulties in recruiting or

retaining qualified individuals, or emergencies from other unusual

circumstances.

In 1998, OPM reminded agencies of this authority to waive the

salary offset to hire critical computer specialists for the Y2K conversion efforts, and OPM quickly approved 16 delegations to meet

this need. More recently, agencies have successfully used this authority to deal with the September 11th attacks, Katrina, and the

tsunami. And we recently approved a delegation to allow Border

Patrol agents to come back for training, as you mentioned.

There are also people, reemployed annuitants now with the Department of Agriculture working to prepare for the avian flu outbreak if it occurs. OPM dual compensation regulations tie emergencies and unusual circumstances together, the result being that

delegations can only be granted in emergencies.

On Friday, July 21st, we published a proposed change to the rule

to allow for OPM to grant such waivers in situations resulting from

emergencies or situations resulting from unusual circumstances

that do not involve an emergency. The comments we receive from

those proposed regulations will be very helpful in shaping the final

regulations on salary offset waivers. As we modernize the regulations, we will be mindful that because waivers result in compensation from both the retirement fund and salary, they must be used

judiciously.

Last month OPM introduced the new Career Patterns approach

for hiring. In recognition of the changes in career patterns in the

work place, OPM is studying a broad range of options that will encourage employees to extend their careers with part-time employment. These options will include a proposal to reemploy annuitants

without salary offset on a part-time basis.

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In addition, we have included provisions in the Federal Employees Retirement Improvement Act that would remove the penalty to

the calculations of the high three salary upon which annuities are

based that result from part-time service at the end of the career.

OPM values contributions that annuitants make in support of

the work of the Federal Government. We welcome the opportunity

to continue the dialog with this committee to review options to improve the use of retirees to meet the Nation’s needs. I am happy

to answer any questions you may have.

Mr. PORTER. Thank you very much.

[The prepared statement of Ms. Kichak follows:]

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Mr. PORTER. Ms. Bradshaw is next. Approximately 5 minutes.

STATEMENT OF PATRICIA BRADSHAW

Ms. BRADSHAW. Good afternoon, Mr. Chairman and members of

the subcommittee. I am very pleased to be here today on behalf of

the Department of Defense to discuss the reemployment of annuitants within DOD.

On behalf of the Department, I am very grateful and appreciative

of the flexibility that Congress has granted DOD with regard to

managing its civilian resources. The National Defense Authorization Act for fiscal year 2004 actually provided us with the authority

to reemploy Federal retirees without requiring that their salaries

be reduced as a result of their annuity payments. Our goal in asking for this authority was to give us rapid access to critical skills

for both emergencies and ongoing critical needs.

Balancing the infusion of new talent at all levels with access to

critical knowledge and expertise that will be lost as the aging work

force retires, the authority was intended as an additional tool for

the Secretary of Defense to use judiciously to support the defense

mission.

I would like to provide just a little background.

After one leaves Federal service, reemployment within the Federal sector can be much less attractive than private sector employment, as has been noted. A Federal retiree working for the private

sector receives a full salary commensurate with the level of work

he or she is expected to perform, and there is no impact on one’s

Federal annuity payment. Contrast that with reemployment with

the Federal Government where prior to enactment of our authority,

an employee’s salary was typically reduced, sometimes significantly, by the amount of that annuity.

Prior to the enactment of the NDAA, fiscal year 2004 saw all

Civil Service retirees were subject to a salary offset unless a specific waiver had been granted by the Office of Personnel Management. And until September 11, 2001, virtually all of the Department’s reemployed annuitants were subject to that offset.

After 9/11, OPM took a very proactive approach to identifying

flexibility that would be useful in combating the new threat.

Among the flexibilities that OPM granted was a waiver of the salary offset restriction for retirees whose skills were critical to address 9/11 issues.

This policy proved to be very helpful. In the 2 years after 9/11,

we hired approximately 400 annuitants, and all but 8 percent of

those were subject to the offset. In the 2 years after the 9/11 authority, we hired more than 800 annuitants; 34 percent of those annuitants were not subject to a reduction.

However, the OPM 9/11 waiver could only be used to fill positions and functions directly related to the aftermath of 9/11. We believed it was still necessary for the Department to seek OPM approval for waiver of salary offset to hire annuitants to fill any other

urgent defense personnel need.

In the NDAA fiscal year 2004, Congress also recognized that

need for DOD to have its own authority. The authority and flexibility granted by Public Law 109–108 provides the Department of Defense with the unique ability to quickly attract a pool of experiVerDate 11-MAY-2000 10:09 Nov 12, 2008 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 C:\DOCS\34772.TXT KATIE PsN: KATIE
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enced candidates to meet critical and emerging needs. This authority is a key tool in ensuring the Department’s ability to recapture

skills that were developed through government employment and

government expense.

Additionally, with almost 30 percent of the DOD Federal work

force eligible for retirement by 2011, it provides a method for managing the resulting loss of skills and corporate history without disruption to the mission.

The Department is continuing with its transformation to meet

the threat of the future, and we recognize that succession planning

is critical to ensure leadership continuity for all key positions. But

we see this tool as a crucial method to support our efforts.

The Department was very grateful to receive the authority and

mindful of the need to use it appropriately. We established Department policy that allows its use only in certain circumstances, such

as for hard-to-fill or critical positions, positions requiring unique or

unusual qualifications when necessary, to provide continuity during transitions and for mentoring.

From November 2003, when we received the authority, until May

31, 2006, we have hired more than 1,500 annuitants using the authority. As expected, this number represents a very small portion,

actually less than 1 percent, of our total hires during the same

time period. Approximately 50 percent of these annuitants were

placed in critical or hard-to-fill positions. Approximately 25 percent

were placed in positions requiring unique skills or qualifications.

And the remainder were used for mentoring and providing continuity for leadership during organizational transition.

We believe this authority is working well for us. It enables the

Department to attract the services of highly qualified annuitants

who might otherwise have been deterred by the salary offset. We

believe that perhaps the greatest benefit of authority will be seen

in connection with the base realignment and closure, the upcoming

BRACS, that we will be executing when the services of reemployed

annuitants will ensure continuity of operations and result in organizational stability at our closing sites.

Although the Department has used this tool effectively, we believe that one change to the law would make it even more effective.

As currently written, any annuitant hired by the Department is entitled to receive both full salary and annuity. Since the payment of

both salary and annuity becomes mandatory once an annuitant is

employed, the Department has been managing use of the authority

via policy that limits the reemployment of annuitants to specific

situations which I have outlined.

We believe it would be more appropriate to manage the authority

by limiting the application of the salary offset rather than limiting

the actual employment of any annuitant who would like to come

back to the Department of Defense. This change would enable the

Department to use the waiver of the salary offset as a discretionary

recruitment tool without generally limiting when retirees are given

the opportunity to work for the government.

Providing discretionary authority to the Secretary would also

allow us to address unintended consequences of our current law.

For some of our annuitants, receiving full salary in addition to

their annuities is actually disadvantageous. Under current law,

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any reemployed annuitant who receives full salary is excluded from

the retirement provisions of title 5 and therefore cannot continue

to contribute to the retirement system, cannot earn additional service credit no matter how long they are employed.

While this may not affect employees who have voluntarily retired, employees forced into early retirement as a result of an voluntary separation such as reduction in force frequently receive significantly reduced annuities. This category includes employees that

are separated by reduction in force. In these cases, it may be more

beneficial for the employee to actually be covered by the retirement

provisions of title 5 than to receive a full salary and annuity.

Let me give you a quick example, a hypothetical situation. It’s

not hypothetical. It happened. A 48-year-old CSRS annuitant takes

early retirement because his position is abolished. His annuity is

reduced by 14 percent because he is subject to an age reduction by

the law. He applies for our Priority Placement Program within the

Department of Defense and is matched with a position and is rehired. However, upon reemployment, his annuity continued as required, and he was not able to make additional contributions to the

retirement system. He was also ineligible to make TSP contributions. Had he been reemployed in another agency other than DOD,

his annuity would have terminated, he would have been covered by

the retirement system and been able to make TSP contributions

unless the agency had sought a waiver on his behalf from OPM.

Upon his second retirement, he would have received his full annuity with no reduction, and he could have significantly more earnings in the TSP fund.

For FERS employees, the situation can be even more problematic. As you recall, there are three components of the FERS retirement plan: the FERS annuity benefit, which is significantly less

than the CSRS annuity benefit; Social Security benefits; and the

Thrift Savings Plan, TSP. In some instances such as RIF, employees are forced to retire early. When this happens, first benefits are

reduced, and the employee may not yet be eligible to receive TSP

or Social Security benefits. If reemployed under the current DOD

law, these employees are unable to increase their benefits on either

FERS or TSP.

Another hypothetical example. The position of a 57-year-old

FERS employee with 12 years of service is eliminated because of

BRAC. Because of the retirement eligibility structure under FERS,

the employee was only eligible for about 75 percent of her full annuity and accepted that annuity with the reduction in order to

maintain her health benefits. The employee was later reemployed

within a DOD component and worked for an additional 5 years.

However, due to our law, she was not eligible to earn additional retirement credit or have additional government contributions made

to the TSP. Prior to our law, she would have been eligible for a redetermined annuity after reemployment. And at the age of 62, her

new annuity would no longer be subject to age reduction, plus she

could have significantly more TSP funds for her second retirement.

If the laws were revised to provide the Department discretionary

authority, our intent would be to allow employees the flexibility to

determine whether a salary offset is in their best interest when

they are being offered a position meeting our salary offset waiver

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criteria. We would continue to apply the criteria we use today in

determining whether a salary offset waiver is in the best interest

of the Department. Annuitants who did not meet that criteria

would be free to accept positions under the terms available in the

rest of the Federal Government; that is, with the salary offset comparable to their annuity payment. As the Department positions

itself to deal with the current BRAC, the revision of the current authority would meet both the needs of the Department and our employees.

Thank you for the opportunity to discuss this important tool

available to the Department. I’ll be happy to answer any questions

that you have.

Mr. PORTER. Thank you very much.

[The prepared statement of Ms. Bradshaw follows:]

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Mr. PORTER. Next Barbara Panther, Associate Deputy Assistant

Secretary for Human Resources Management, Department of VA.

STATEMENT OF BARBARA PANTHER

Ms. PANTHER. Thank you, Mr. Chairman. Good afternoon. First

I would like to introduce Ms. Donna Schroeder, who is accompanying me today. She is the Director of our Compensation and Classification Service and is our program expert on how annuities are affected by the offset.

Thank you for the invitation to appear before you this afternoon,

and I request that the written testimony be entered into the record.

Before I describe VA’s experience with reemployment of annuitants, I would like to note the emphasis that this Department

places upon work force planning. Since 2003, VA has operated according to a Strategic Human Capital Plan that aligns with our departmental Strategic Plan as well as the President’s Management

Agenda. VA has created and implemented a departmentwide system that ensures that work force planning activities are conducted

throughout all levels of the organization.

VA success in attracting, developing and retaining top talent has

resulted in numerous benefits to veterans. Outside sources are giving kudos for services and products that demonstrate the quality

of VA’s work force. For example, VA recently was awarded the

prestigious 2006 Innovations in American Government award for

its electronic patient records data base. This award, sponsored by

Harvard University’s Ash Institute for Democratic Governance and

Innovation at the Kennedy School of Government, honors excellence and creativity in the public sector. On July 17, 2006, VA’s superior health care was highlighted in a Business Week article entitled ‘‘The Best Medical Care in the U.S.’’ These accolades recognize

the work of employees who have a special dedication and commitment to serving veterans. More likely than not, it is this sense of

dedication to the unique and honorable VA mission that would encourage retirees to reconsider reemployment with VA.

There are a number of instances when VA has sought to reemploy annuitants in order to better serve veterans. In the Veterans

Benefits Administration, retired veterans service representatives

are required to provide training, to mentor, and to transfer institutional knowledge which was gained over the course of decades of

service. In 2005, VA needed additional healthcare professionals to

provide care to veterans who were displaced from New Orleans and

Mississippi when Hurricanes Katrina and Rita hit the Gulf Coast.

There are two primary reasons for reemploying annuitants in

VA. First: to facilitate and complement succession planning. VA retirees with institutional and professional knowledge are reemployed to transfer that knowledge to the next generation of employees, to train and monitor them, allowing regular staff to focus on

their workload.

The second primary purpose for rehiring annuitants is for true

critical immediate needs ranging from shift coverage, to IAEA, to

assisting in VA’s fourth mission of support to the Nation during

emergencies.

From 2000 to the present, VA has hired 434 retired annuitants,

with 92 in the nursing field, including registered nurses, licensed

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practical nurses and nursing assistants. We currently have 201 annuitants employed at VA facilities with the dual waived for 44, including 14 nurses.

VA has received OPM’s approval to waive the salary offset for

certain occupations on several occasions. In 2001, OPM delegated

to VA the authority to waive the reduction for up to 250 veteran

service representatives in the Veterans Benefit Administration. In

2002, VA received delegated authority to waive the offset for RNs.

In 2003, VA was given the authority to waive the offset in certain

other medical occupations within that Veterans Health Administration. In addition, VA has requested two waivers from OPM for particular individuals with unique qualifications.

The need for waivers of the salary offset varies with the development and resolution of emergency situations, the market for specific professions, and individual retirees’ personal situations. In

general, the waiver of the offset facilitates the employment of retirees, especially those with highly sought skills. However waivers are

not always needed and do not always result in retirees returning

to work for VA.

Of the 201 current annuitants at VA, only 44 have been approved for a waiver of the offset. The remaining 157 annuitants

have their salaries offset by the amount of their annuities.

Mr. Chairman, thank you again for the opportunity to be here

today, and I am prepared to respond to any questions the Members

may have.

Mr. PORTER. Thank you very much.

[The prepared statement of Ms. Panther follows:]

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Mr. PORTER. Next, Dr. Ronald Sanders, Chief Human Capital Officer, Office of National Intelligence.

STATEMENT OF RONALD SANDERS

Mr. SANDERS. I do appreciate the opportunity to appear before

you today to address this important and urgent topic: reemploying

Federal retirees in times of national need by allowing them in certain circumstances to return to the public service without any penalty. The Intelligence Community [IC], has some experience in this

regard as well as some special authorities, and both may help inform the subcommittee as it considers ways to better leverage the

skills and talents of former Feds, a critical but, I believe, underutilized national resource.

The ability to reemploy retirees to meet mission exigencies has

proved increasingly critical to the IC in large part because of our

demographics. The OPM Director Linda Springer talks about the

retirement tsunami, and the metaphor is apt. Our work force is literally shaped like a wave front. On the one hand the majority of

our work force has more than 20 years of service. By 2010, more

than half of our employees will be eligible to retire, with even

greater percentages among our senior technical experts, managers,

professionals and executives. On the other hand, 30 percent or

more of our work force has less than 5 years of Federal service, the

result of our post-9/11 hiring surge, and that percentage is growing.

Our growth is intended in part to cover the capability we lost

during the downsizing of the 1990’s in part to deal with the brutal

operating tempo that our current mission demands. In between

those two steep population peaks is a substantial trough at our

middle grades, precisely where we would look for our next generation of senior analysts, case officers, technical experts and leaders.

Rebuilding our bench strength is made even more difficult by the

nature of our work. Operational and analytical tradecraft is far

more art than science. It literally takes years of experience and

training to develop a single seasoned intelligence analyst or case officer, and even longer to prepare someone to lead them effectively.

Yet the seasoned professionals who can teach our next generations

those operational and analytical arts are ready to retire.

The ability to bring back some of those artisans without penalty

is critical to our human capital recovery plan, and parts of the IC

have already seen the benefit of this flexibility, albeit in limited

fashion. For example, those IC agencies under the Department of

Defense have had dual compensation waiver authority since 2004

and have used it to great effect. The NSA has been especially strategic in employment of retirees. The CIA has exercised similar authority, but only with respect to those former Agency employees

who retired under a special retirement system. For all other annuitants, including its own, the CIA is set to rely on authority delegated by OPM. And while Congress gave the FBI the flexibility to

do something similar as part of the Intelligence Reform Act, it may

only reemploy its former employees. These various authorities limitations are problematic when one is trying to integrate and

strengthen the Intelligence Community as a whole.

The Congress recognized this when it also included section 1053

of the Intelligence Reform Act. That section provides the Director

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of National Intelligence authority to establish a National Intelligence Reserve Corps, NIRC, for the temporary reemployment on

a voluntary basis of former civilian employees of elements of the

IC during periods of emergency as determined by the Director of

National Intelligence.

The statute further ensures that the salary of a former employee

appointed to the Reserve Corps who is receiving an annuity under

the Civil Service and Disability fund will not be offset. In other

words, the Intelligence Reform Act granted dual compensation

waivers to those retirees reemployed under the auspices of the Reserve Corps. And in that regard, it is discretionary under DOD, we

can also reemploy a retiree outside of the confines of the Corps and

avoid some of the complications that Pat Bradshaw mentioned.

Thus under the statutory authority I have described, the FBI can

reemploy a CIA retiree and vice versa, leveraging the individual

expertise of our former employees for the good of the entire Intelligence Community and the Nation as a whole.

When you’re trying to integrate the talents of current and former

intelligence professionals in 16 separate intelligence agencies and

6 different Cabinet departments, an IC-wide Reserve Corps has the

potential to become one of our most powerful human capital tools.

Accordingly, I am pleased to announce that just yesterday Ambassador Negroponte took official action to establish that Reserve

Corps, issuing a policy memorandum governing use of this authority across the Intelligence Community. In so doing, the Director

has also determined that a period of emergency exists for the Intelligence Community, as required by the law, and has delegated authority to make appointments to the Reserve Corps to the heads of

our IC agencies under certain limited conditions and subject to certain mission-based criteria.

For example, the authority requires the head of one of our agencies to make a specific written determination that the appointment

of a reemployed annuitant to the Reserve Corps will meet a requirement critical to the agency’s mission during the period of the

emergency. It also requires the agency head to notify my office in

writing of every such determination.

In order to build a robust communitywide talent pool to support

the Reserve Corps, the DNI has also required each IC agency to

provide employees who separate with an opportunity to place their

names on a roster of volunteers. However, former employees who

are not on that roster may also be reemployed if they are otherwise

eligible and the agency’s head determines, again in writing, that

they meet a mission-critical need. The policy does not allow a retired employee to be brought back to his or her former position except under extremely narrow circumstances, nor does it permit a

former employee to come back at a higher General Schedule grade

or step. The policy also excludes employees who were separated for

cause, who resign upon notice of proposed separation for cause, or

who are terminated upon revocation of their security clearance.

And it provides that an individual appointment may be terminated

at any time and for any reason by the head of the agency or the

DNI.

In establishing the National Intelligence Reserve Corps, we seek

to reemploy exceptional people to meet exceptional circumstances,

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to leverage their priceless experience and intellectual capacity

without having to ask them to suffer a financial penalty to the salary we pay for additional service or the annuity that they earned

for past. In so doing, we believe our former employees can continue

to make valuable contributions to the U.S. Intelligence Community’s agile, all-source work force of military, civilian and contractor

personnel as we prosecute the global war on terror.

Mr. Chairman, that concludes my testimony. I would be happy

to answer any questions you may have. Thank you.

Mr. PORTER. Thank you very much for your testimony.

[The prepared statement of Mr. Sanders follows:]

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Mr. PORTER. A staggering statistic that I failed to mention in my

opening comments that really helped drive my interests in this

issue is that we are going to be short 800,000 civilian nurses in the

next 10 years; 800,000, which, if I bring it closer to home in Nevada, which started my investigation and my research, we are

short 1,000 healthcare professionals today in the nursing field. We

hire about 2,500 new teachers a year.

Some of you may have heard me talking about our challenges of

growth, but some of our issues specific to growth are not related

just to Nevada, and that is, as I looked at the nursing shortage,

also spent some time in the Middle East meeting with healthcare

professionals that were in the different branches of service, and

some volunteering their time around the world, and what we could

do to keep nurses in the Federal service, you know, prior to going

into the civilian corps.

So I guess it’s been a rude awakening. I think tsunami is well

said. Not only do we have a shortage in the Federal Government

of qualified new employees, we are having a problem keeping them

within the system. And as we look at the competition today for the

private sector, if we are—we need 800,000 civilian nurses in the

next 10 years. Imagine the pressure that is going to be putting on

our Federal employees to jump ship and to go into the civilian work

force.

So today as we have heard from each of you in your specific

areas, some of your challenges and some of your support and some

ideas—Patricia, I know you mentioned that you really lack flexibility when it comes to the program is one size fits all, and it sounds

like you would prefer that if and when this is available, as it is in

some cases, that you have some flexibility, correct? Would that help

you in recruiting and/or keeping folks to stay in the system?

Ms. BRADSHAW. Yes, Mr. Chairman. We believe that if we had

the flexibility that I described, we would have access to other employees that would prefer to come back and be able to add to their

annuity stream for the future. It is one of those costs of opportunity

here. We just don’t know how many people know about the DOD

policy, and so therefore they don’t even bother to inquire about opportunity or make themselves available because they go to a Federal agency where they can be hired back; especially if you have

been continued, you can go back as a regular employee and start

contributing back into the retirement system and into your TSP account. So that is the kind of flexibility that we would like to have.

Mr. PORTER. And this is really for all of you. Do you find that

a lot of these folks don’t understand or do not know of some of the

options that are currently available? Do you find that to be part of

the problem? Because it sounds like there are areas where they fit

into the right box. Are you finding that they need to understand?

Is that one of the challenges?

Mr. SANDERS. I think the rules have been so deeply embedded

that, generally speaking, you are going to have a salary offset unless there is an exception to the rule granted by OPM or granted

by law, and I think that may inherently discourage employees.

One of the things that the FBI has done about its own Reserve

Corps is it literally posts vacancy announcements on its Web site

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looking specifically for retired law enforcement officers, and they’ve

had great success in that regard.

Mr. PORTER. Well, if I were to ask each of you to give me one

solution—Patricia, you already have, because you have given us

one, so you have to come up with a second one—what would you

suggest that we do to fix this?

Ms. Kichak.

Ms. KICHAK. We think the great need that we want to address

is to allow people to transition in—to stay in the workplace longer

by transitioning to part-time work instead of retiring. So we are

looking for a way to use this authority to encourage people to stay

with us on a part-time basis.

Mr. PORTER. OK. That is good.

Do you need a moment Patricia? We will come back if you like.

Ms. BRADSHAW. I would second that. We would support that. I

think it is absolutely critical to find a way to help people transition.

I think when you reach that—an interesting number, we discovered, is that 20 percent of people who become eligible within DOD

actually retire. They actually tend to stay about 3 years on average

beyond their eligibility date. And I think that is about the point

that people really start to burn out. And so if we know that as a

number, if we had a tool that would say, OK, we know that you

are about to move on at some point, how can we make that transition easy for you, and allow us to use those individuals for mentoring, organizational, transition on a part-time basis, I think that

would be most helpful to us.

Mr. PORTER. Ms. Panther.

Ms. PANTHER. I, too, would have to agree with Nancy’s proposals,

particularly the proposal that she described with regard to annuitants who come back on a part-time work schedule automatically

getting a waiver of the offset. That would be particularly helpful

because we do have many retirees who aren’t interested in work

full time; they are really only interested in coming back on a parttime basis. And that particular proposal from OPM would be very

helpful.

Mr. PORTER. Doctor.

Mr. SANDERS. Ditto, ditto, on the part time and the discretion to

offer this or not. And I am also going to be presumptuous as a

member of the OPM alumni association to encourage OPM to establish criteria for the delegation of this authority; I think if agencies are going to make this a permanent part of their strategic

human capital planning, they need to be able to count on it. OPM

should say, these will be the conditions under which we will grant

the delegation and then they ought to be able to get that delegation

for an extended period so they can use it over time. That is in addition to the one-time emergency use, but for the unusual circumstances, the longer term, I think more predictability in that

delegation of authority would be useful.

Mr. PORTER. And I alluded to it earlier, but this is not just a

problem for Federal employees. It is a problem nationwide in many

specialized areas, as I mentioned, in healthcare. And I would like,

as I am preparing legislation, a lot of it, it really is what OPM is

suggesting and the language we are working on. If we could find

a model, although the civilian work force is different than Federal,

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but if we could find a model that could be used in the private sector

also because they are experiencing the very same challenge as far

as this wealth of talent that is retiring. And I am not an actuary.

I know a little bit about annuities, but I am certainly not an expert, but it seems to me we could even establish a separate annuity

process for those retirees who want to come back in the system. Because I know the first system is established with certain actuarial

scales and certain dollars. I would like to look at setting up a simplified retirement program that retirees could use, separate, of

course, in the private and public but maybe the model could be

used in both. So thank you very much.

Mr. Davis.

Mr. DAVIS OF ILLINOIS. Well, thank you very much, Mr. Chairman.

I must confess that this is somewhat of a perplexing problem,

and I find it perplexing because it deals with some of what I consider to be the great contradictions in our society. I mean, here we

are on one hand talking about, how do we let individuals who have

worked, developed, gained experience, continue to work without

punishing them, and then on the other hand, we talk about the unemployment rate that exists, and we talk about other individuals

who can’t find a job. I mean, this seems to be one of the real paradoxes. I live in a community, for example, where unemployment in

many instances is 25, 30 percent. And there are thousands of people in our society, who for all practical purposes, will never work

and will never have a meaningful job at all. And on the other hand,

we have not found a way to make sure that those individuals have

access to the workplace and make sure that they have the kind of

training, the kind of education and develop the skills to make them

an integral part of work force and workplace development.

And on the other hand, I remember a few years ago, when we

were talking about the whole question and the whole issue of leisure time activity, because there were people who thought that individuals were going to have too much leisure time and were going

to retire, everybody when they were 55, and they wouldn’t have

anything to do with themselves after that. So we needed to create

all of these additional opportunities.

Let me ask if any of the agencies have given—is there a way to

mix the conversation that we are having right now with the development of approaches to generating the personnel that we would

need so we wouldn’t have to have this kind of discussion?

Ms. BRADSHAW. I will take a crack. Sir, I would offer that your

observation is a very legitimate one in that we see that there are

multiple ways in which we need to be preparing for the future.

Succession planning is key. We see that using reemployed annuitants is but one source for a critical emerging need because the

pipeline has not provided for us perhaps the talent that is immediately—that we need immediately.

On the other hand, that is part of our responsibility to ensure

that we only use this authority appropriately so that we do not inhibit the development opportunity, that we ensure that we are tapping into the work force that is not employed that is available and

bringing them into the work force, training them so that we are

building the pipeline. So we have absolutely had conversations

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with DOD around that delicate balance between ensuring that you

are using all the multiple tools available to you, targeting new

hires, ensuring that you have developmental programs in place,

building that pipeline so that, as you watch for the tsunami to hit,

you have people in the pipeline. But oh, by the way, we have so

many emerging needs within DOD, that is not always possible and

because we are still competing with the private sector for these opportunities, we may need those people immediately, and we are

willing to pay the offset and the salary for those individuals. So we

see that you are absolutely right. There are multiple ways to address our emerging needs, and that is certainly part of the discussion that we have within DOD.

Mr. DAVIS OF ILLINOIS. And I certainly appreciate that because

I think the comprehensiveness of planning—I mean, I can think of

school districts, for example, that developed incentives for their

more experienced teachers to retire so they would have more

money left, and then they could hire people at lower rates of pay.

I can also think of some businesses and industries that have done

essentially the same thing; that is, try and usher out those individuals at the high end of the pay scale so that there is more room.

Of course, you sacrifice quality. You sacrifice experience. You jeopardize other kinds of things at the same time. And it seems to me

that we really have some serious, serious challenges.

And then there are those individuals who seemingly are afraid

that, if we have the wrong kind of immigration policies, that we are

going to have just a flood of individuals in our country, and there

is not going to be enough work opportunities for them. Granted

that individuals often come in at the lower end of things, but then,

you know, they manage to go to college and learn some things and

get some skills and develop and get an opportunity to move up.

And so it seems to me that we need to always be thinking comprehensively about these issues when we are trying to plan for continuous development.

And, Mr. Chairman, if I could just ask one additional question.

For example, with DOD, if we are going to hire the same individuals in some instances, I am saying individuals, have we made

some determinations of, relative to cost effectiveness, what would

be most cost efficient, is the most cost-efficient way to handle this

and try and get the same level of productivity while keeping costs

down—I hate to use the term minimum—but keeping the cost at

the point where we would most likely want it to be?

Ms. BRADSHAW. Yes, sir. Part of our policy and the reason we

have put policy in place, even though the law is very broad in the

authority it granted the Secretary, our policy is very specific about

the circumstances in which you may use this authority to reemploy

someone, and part of the reason we did that was to ensure that we

are not bringing back people into positions where we could fill it

with someone that is already in-house that has been growing and

just promote that person or move that person into the job or that

we couldn’t perhaps recruit someone from the outside at a lower

salary. So we are very conscious of being judicious in our use of

this authority for one of those reasons.

Mr. DAVIS OF ILLINOIS. Well, thank you very much.

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And Mr. Chairman, let me thank you. Because I am afraid it

seems to me that we are creating a society where we are going to

have a bunch of people up here, and we are going to have a bunch

of other people down here, and a lot of other people floating in between. And I think that we have to find ways to try and ensure

and make sure that does not happen and that we don’t end up in

a situation where, in my community, we often talk about whether

we are helping the needy or the greedy. And I think we have to

keep people out of that needy category and keep others from becoming too greedy. I mean, I have friends who have retired from

places and all, and then they just decide to go back to work, and

of course, when they go back to work, they prevent other younger,

less experienced people, I think, from having the opportunity to do

so.

So I thank you very much, Mr. Chairman.

Mr. PORTER. And along that line, what we are finding is that in

entry level in the work force, we have a lot of young folks that have

chosen not to study math and science, for whatever reason, whether it be their choice or a lack of parental involvement or encouragement. So we are trying to find incentives to get people into the

work force in specialized areas, whether it be math, science instructors, nurses. So I know, in Congress, we are trying to find ways to

encourage folks to go into these different areas. There is another

reason we want to keep——

Mr. DAVIS OF ILLINOIS. I am not running out on you. I just have

to go manage a bill.

Mr. PORTER. Go take care of it. We can talk about you. That is

OK. We need to find a way to encourage them into the work force,

and in the meantime, we have this talent in the private and public

sector, especially in those areas that are leaving. So it is another

reason why today is so important.

Having said all that, thank you very much for your testimony.

We appreciate your being here and look forward to working with

you in the future. Thank you.

And we do have a second panel.

Charles and Duncan, will you join us, please?

I am not sure if you guys stood for the swearing in. I am not

sure. Why don’t we do the formal portion here? Please raise your

right hands.

[Witnesses sworn.]

Mr. PORTER. Let the record reflect that the respondents have

agreed in the affirmative.

Thank you, gentlemen, for being here.

In our second panel, we have Mr. Duncan Templeton, national

legislative vice president, Federal Law Enforcement Officers Association; and Mr. Charles Fallis, president of the National Active

and Retired Federal Employees Association.

Welcome, gentlemen. I have a list of about 300 questions for you,

so get prepared. No, not really.

Charles, please.

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STATEMENTS OF CHARLES FALLIS, PRESIDENT, NATIONAL

ACTIVE AND RETIRED FEDERAL EMPLOYEES ASSOCIATION;

AND DUNCAN TEMPLETON, NATIONAL LEGISLATIVE VICE

PRESIDENT, FEDERAL LAW ENFORCEMENT OFFICERS ASSOCIATION

STATEMENT OF CHARLES FALLIS

Mr. FALLIS. Mr. Chairman, members of the subcommittee, I am

Charles L. Fallis, President of NARFE, and I am very pleased to

be here today to testify on behalf of the members of our association,

and I want to thank you for inviting us to testify. NARFE has long

held that Federal retirees returning to government service should

receive the full salary of their new job without any offset against

the retirement annuities they earned through prior Federal service.

Under current law, the wages of reemployed annuitants are generally offset by the amount of their annuity. However, OPM and

certain Federal agencies can offer waivers, which allows select returning retirees with critical or crucial skills to keep both sources

of earned income. The needs of the war on terror and homeland security underscore their importance. While no one complains about

receiving a waiver, the inability to add retirement credit from their

reemployment often creates dissatisfaction. Without a waiver,

many retirees will not consider reemployment since the offset of

their Federal pay would make their reemployed salary unacceptable.

As a practical matter, many of them would be working for free.

Sometimes we hear that waivers are not applied equitably. Indeed,

the real challenge of recruitment and retention is whether incentives are used fairly. As you know, many Federal workers with crucial skills avoid the waiver process by working for a government

contractor where their Federal annuities present no barrier to

being paid full salary. Additionally, working for a contractor means

one can earn more quarters in Social Security, and that is Social

Security covered employment, thus mitigating the reduction of

their Social Security benefits by the unfair and arbitrary Windfall

Elimination Provision. In addition to reemployment, we are

pleased, Mr. Chairman, that you are examining the application of

the 1986 COBRA budget law which unfairly reduces the annuities

of thousands of Federal employees who worked part time in the

final years of their careers. This reduction occurs when actual parttime wages instead of full-time equivalent salaries are used to calculate the employee’s highest 3 years of salary. President Bush’s

2007 budget recognized this inequity and proposes using full-time

equivalent salary to compute the annuities of future retirees who

work part time. We agree part-time work near retirement encourages skilled, talented and experienced workers to remain employed.

Unfortunately, the President’s proposal does not remedy the inequity for current retirees whose annuities were lowered. For that

reason, NARFE supports Representative Jim Moran’s bill, H.R.

480, which would modify the President’s proposal to include and

correct the annuities of current affected retirees and survivors.

H.R. 480 would alleviate any potential administrative complication

in several ways. First, it would put the burden on annuitants to

identify themselves as eligible for the correction rather than directVerDate 11-MAY-2000 10:09 Nov 12, 2008 Jkt 000000 PO 00000 Frm 00059 Fmt 6633 Sfmt 6633 C:\DOCS\34772.TXT KATIE PsN: KATIE
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ing OPM to go out and find them. Upon enactment, annuitants

would have 18 months to apply to OPM for a prospective, and that

is a prospective calculation of their annuities. H.R. 480 would require that the newly calculated annuity amount become effective

after the annuitant applied for a recomputation.

Equity is also warranted for certain Veterans Administration

nurses, and you mentioned that earlier, Mr. Chairman, nurses

whose annuities were unfairly reduced by their part-time service.

Before 1986, the Veterans Administration promised full-time retirement credit for part-time work to satisfy nurse staffing shortages.

They have made that promise. Unfortunately, the VA did not keep

that promise. Perhaps they couldn’t, but they didn’t keep that

promise. Some nurses have never received their promised full-time

retirement credit. This inequity was corrected prospectively in 2002

by the 107th Congress, but the new law did not extend full-time

credit to VA nurses who retired between April 6, 1986, and January 23, 2002. Now, in this connection, NARFE supports Representative Tammy Baldwin’s legislation, H.R. 4298, which would fix this

inequity.

Mr. Chairman, NARFE urges that in any part-time retirement

computation, in any bill that the subcommittee addresses, we urge

that you please include, No. 1, equity for all retired VA nurses and,

two, fairness for all current retirees whose annuities were wrongly

reduced because of their part-time service.

Finally, Mr. Chairman, we commend you for your interest in enabling Federal annuitants to continue making critical contributions.

Thank you for inviting us to testify, and if you have questions, I

would be glad to address them.

[The prepared statement of Mr. Fallis follows:]

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Mr. PORTER. Thank you very much.

Mr. Templeton.

STATEMENT OF DUNCAN TEMPLETON

Mr. TEMPLETON. Chairman Porter, I want to thank you for the

opportunity to appear before you today to testify about the need for

Federal law enforcement to utilize an invaluable resource commonly referred to as retired annuitants.

My name is Duncan Templeton, and I am currently the National

Legislative Vice President of the Federal Law Enforcement Officers

Association [FLEOA]. I am here today on the part of ART Gordon,

FLEOA’s National President.

FLEOA is the largest nonpartisan professional association exclusively representing Federal law enforcement officers. I am here

today representing over 25,000 Federal agents from over 50 different agencies. Some of our members are rehired annuitants who

are currently employed by the Transportation Security Administration and the Federal Air Marshal Service. All FLEOA national officers, like myself, are full-time Federal law enforcement officers who

conduct FLEOA business on their own time. I am a criminal investigator with the U.S. Department of Justice, but I am here today

on annual leave representing members of FLEOA.

Ever since the tragic events of September 11, 2001, it is obvious

that rehired annuitants have and continue to play a critical role

within Federal law enforcement. Both the Transportation Security

Administration, TSA, and the Federal Air Marshal Service, FAMS,

utilize many experienced Federal law enforcement personnel, retired annuitants, to initially set up and operate these two new and

important Federal agencies. Many retired annuitants currently occupy critical management positions within both TSA and FAMS.

These positions include Federal security directors and assistant

Federal security directors for the law enforcement within TSA as

well as most middle level, upper level and executive level management positions within the FAMS. Since both TSA and the FAMS

have only existed for 4 years, the loss of these key management

personnel retired annuitants within these agencies and the lack of

experienced personnel to fill this void will have a devastating effect

upon public safety.

OPM encourages agencies to utilize retired annuitants, and Congress recently passed legislation to enable the Defense Department

to take advantage of this unique personnel practice. Since most

other departments were already utilizing this valuable resource,

this personnel practice actually saves the agencies money. Since

they don’t have to pay any fringe benefits to retired annuitants, it

saves about 40 percent or $40,000 per employee and bridges the

knowledge and skills gap between the newer employees and the

highly experienced employees.

FLEOA recently urged Secretary Chertoff to act now and authorize a 2-year extension for all retired annuitants within TSA and

FAMS to avert major problems resulting from the potential loss of

over 100 retired annuitants within these two agencies. This is just

one example of how effective it was and continues to be to utilize

retired annuitants within the Federal law enforcement agencies.

Some Department of Justice agencies have sporadically utilized reVerDate 11-MAY-2000 10:09 Nov 12, 2008 Jkt 000000 PO 00000 Frm 00069 Fmt 6633 Sfmt 6633 C:\DOCS\34772.TXT KATIE PsN: KATIE
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tired annuitants to fill the void within critical areas of their agencies as well. Most Federal law enforcement officers retire at age 50

with over 20 years of dedicated law enforcement service and are

not allowed to return to the Federal work force unless they have

received dual compensation waivers for a specific period of time,

usually no more than 3 years.

These Federal agents have received thousands of hours of training during their careers and honed their investigative skills over

many years while conducting complex investigations. These talented individuals then take their skills and expertise with them

and move on to the private sector in higher-paying positions within

Homeland Security, crisis management, forensic investigations, private security or with a State or local law enforcement agency. This

is necessary because they are prohibited from starting a second career within the Federal Government.

However, it should be noted that there is one exception to this

rule of dual compensation and rehired annuitants. Over the past

20 years, hundreds of U.S. Secret Service agents have retired from

Federal law enforcement service and retired under the Washington

Metropolitan Police retirement system and, therefore, are allowed

to start a second Federal law enforcement career with another Federal agency. They are not required to get dual compensation waivers. There are hundreds of retired Secret Service agents currently

employed by TSA, FAMS, Department of Defense, Department of

Justice and many of the Inspector General offices. FLEOA would

like to see these same benefits, the same benefits reaped by Secret

Service agents, extended to all Federal law enforcement retirees.

Currently, the law regarding waivers appears to be implemented

differently by agency and by position for different periods of time.

There does not seem to be any uniformity. Indeed, within the entire Federal law enforcement community, the need for rehired annuitants is great, and the need for more widely utilized—and the

need to be more widely utilized if we plan to continue to beef up

Homeland Security agencies and to develop a higher level of intelligence gathering that relates to potential terrorist attacks or

groups wishing to harm our great Nation.

The skills of experienced criminal investigators and intelligence

analysts take many years to develop and cannot simply be taught

in a classroom environment. These assets cannot continue to be ignored. Dual compensation waivers for retired annuitants should become the norm within Federal law enforcement until each agency

is satisfied that we have adequately highly skilled and trained personnel to adequately perform their mission.

This becomes even more critically important when you get into

the management ranks of the Federal law enforcement agencies.

Inexperienced leaders within Federal law enforcement can result in

disastrous consequences for the safety and security of our Nation.

Competent law enforcement leaders are bred over a period of many

years. They move up through the ranks of their respective agencies. With newly created agencies like TSA and FAMS, this is not

possible. So the use of retired annuitants is a necessity. The waivers should be based on the demonstrated skills of the individuals,

law enforcement retiree and the needs of the agency. Timeliness

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should not be set for the waivers. However, uniform policies need

to be established.

FLEOA has proposed a Federal law enforcement reserve force to

be utilized in times of extreme agency emergency to supplement

Federal law enforcement resources. This proposal has previously

been submitted by FLEOA to Congress and the administration but

has never been implemented. This is feasible, since the Law Enforcement Officers Safety Act of 2004 authorizes retired Federal

law enforcement officers to carry firearms anywhere in the country

as long as they qualify with the firearm annually.

FLEOA President Gordon has asked that I attach a copy of his

letter to DHS Secretary Chertoff dated February 12, 2006, regarding the issue of rehired annuitants within the Department of

Homeland Security. To date, no action has been taken by DHS on

this request. In addition, FLEOA President Gordon has asked that

I provide this committee with a copy of FLEOA’s proposal for a

U.S. Homeland Security reserve force. Thank you for allowing me

to testify today, and I would be happy to take any questions as

well.

[The prepared statement of Mr. Templeton follows:]

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Mr. PORTER. Thank you very much.

First, Mr. Templeton, just reiterate my agreement that the current pay benefits situation really is a hodgepodge, and that is part

of what is driving my concern and comprehensive review in developing policy. So I appreciate your comments again, and I look forward to some more ideas from your groups as we move forward because it absolutely is a hodgepodge, and I understand that something must be done. So as we move forward looking at retirees, getting them back in the system or remaining, know that the primary

goal of mine is to see if we can correct some of that problem. It is

very confusing. And we are doing everything we can to correct that.

From a question perspective, I guess if you could both just share

with me some of the trends that you are seeing. What is happening

with the retirees, Charles? And what is happening as far as wanting to get back to work or choosing not to? Are you seeing an increase in those that want to come back into the work force? And

if so, do they want to come back full time or part time, or what

are you sensing happening?

Mr. FALLIS. We have had concerns expressed to us about people

who want to go back to work, but there are barriers in coming back

to work for the Federal Government, that is the issue we are talking about now. There are also barriers that face those who want

to go back and work in the private sector. And that falls into the

WEP situation, Windfall Elimination Provision. We have people

who will only work if they are paid under the table. They do not

want to contribute into a fund, which in this case, it is Social Security from which they have no hope of receiving any benefit, or if

they do receive a benefit, it will be a reduced benefit. And so that

is the concern we see. I am sure that we have members who would

be happy to go back to work if the conditions were right.

I must say, though, that as far as I am concerned, it is not a

burning issue. I can’t say that, you know, I get calls every day on

this. Our people, for the most part, are happy to be retired. I might

be the exception. I retired 21 years ago, and I was retired for 14

years before I came back to work.

Mr. PORTER. You should know better.

Mr. FALLIS. I should know better, right. But I happened also to

be one of those folks who was eligible to retire before January 1,

1986. And so I am exempt from the ravages of WEP.

Mr. PORTER. And Duncan, what do you sense? What are you

hearing?

Mr. TEMPLETON. Well, the Federal law enforcement system is

unique in that you can retire with 20 years of service at age 50.

Also in that, you have to retire by age 57 regardless, unless you

get a waiver. You could get a 1-year waiver to stay 1 extra year.

I think people, you know, are desiring to—I know people who are

retired and are desiring to come back and work in a law enforcement function. It is a passion for them, not just a financial issue.

And I can speak for myself specifically. At this point, I have 19

years of service. In a year, I will be totally vested with 20 years.

I can continue to contribute at 1 percent to my retirement after

that, but I currently contribute at 1.7. If they were to increase that,

it would make it more attractive for me to stay, but I am eligible

to retire myself in 3 years. I certainly won’t be ready to stop at that

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point, but I think that our retired Federal law enforcement officers

have a lot to offer and should be given a chance to come back and

contribute for all of us.

Mr. PORTER. Where are you finding a lot of the law enforcement

officers going after their retirement?

Mr. TEMPLETON. I think predominantly to the private sector, to

banking investigative positions, internal banking investigative positions, private investigation positions, that kind of thing, from my

experience. To go to a—you know, realistically, to go to a local law

enforcement position where you would be an officer for a person of

retirement age is not that realistic, but there is a wealth of knowledge there and an incredible brain drain from all the people who

are retiring and not being replaced by as experienced employees.

Mr. PORTER. Charles, I would like to talk for a moment about the

nurses and those that retired between April 1986 and January

2002. So that group was left out of a correction, or what happened?

Mr. FALLIS. There was—it was fixed, as I indicated, prospectively. There was no retrospective coverage. So they left that 16

years between 1986 and 2002. Those nurses still have received

nothing even though they were promised that they would receive

full credit for their part-time work because they had a critical

shortage problem. They persuaded them to stay on with this promise, and they took that in good faith. They really did. And they are

terribly, terribly disappointed today in the Federal Government

that they have fallen short of that promise.

Mr. PORTER. So, Charles, these were folks that could have retired

and chose, because of the need, to stay on in a part-time basis or

full time or both?

Mr. FALLIS. Yes. Some, both, yes.

Mr. PORTER. And they weren’t able to contribute at all into the

retirement system or just partially?

Mr. FALLIS. Well, I think they might have been able to contribute

into the retirement system, but it was on—when they figured their

retirement, they didn’t include what—let’s say, you know, the full

salary for the position. These people were working part time. They

worked part time, but they were not given full-time credit for the

time that they worked, and that was what they were promised.

They said, if you will come back and work 4, 6, 7, anything short

of 8 hours a day, we will see that you get full credit on your retirement, full-time credit for the time and the hours and the days and

the months and the years that you put in. And then it was not delivered.

Mr. PORTER. Have there been numbers run on what effect, what

the impact is financially? Is there like—I don’t know if the term

is scoring in this case, but has there been information available on

the cost to correct these problems?

Mr. FALLIS. These nurses have been valiant in pressing for justice here, but they are small in number. Normally, the Congress responds to situations that involve millions of people. We have small

numbers now, and they have not been able to generate the kind of

support for the legislation that they would like to see passed to

make them whole.

Mr. PORTER. And that is Tammy Baldwin’s H.R. 4298?

Mr. FALLIS. That is it, yes.

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Mr. PORTER. And it corrects the problem?

Mr. FALLIS. It does.

Mr. PORTER. So after 2002 then, they made a correction for anyone that is in that capacity? Or what happened after——

Mr. FALLIS. Prospectively, the nurses from 2002 are taken care

of. Those before 1982 back to—I mean, before 2002, back to 1986

are the victims.

Mr. PORTER. And the H.R. 480, you mention Mr. Moran’s, that

has to do with not having a waiver or—if you could explain to me

what we are trying to fix with that, with Mr. Moran’s? What does

it do?

Mr. FALLIS. Well, Mr. Moran’s bill is bill No. 480. It is a bill that

we support, and it would modify the President’s proposal that came

out in his 2007 budget. His proposal, you know, recognized that we

had an inequity here as opposed to using full-time equivalent salary to compute the annuities of future retirees who would work

part time. But it fell short of the mark, and the inequity that was

left there is covered by Representative Jim Moran’s bill, H.R. 480,

it would modify the President’s proposal to include and correct the

annuities of current affected retirees. It is the retirees who would

be left out in terms of the President’s proposal. Here, again, we are

talking about fixing it prospectively, but not fixing it retrospectively because there are victims here who are—I won’t call them

victims. There are people here who have been penalized unfairly.

Mr. PORTER. Like my mom who is a notch baby. I hear——

Mr. FALLIS. These are all notch people. That’s exactly it.

Mr. PORTER. Well said. I want to thank you very much for your

testimony. I appreciate you both being here and to the other members of the panel. And with that, we will adjourn the meeting.

Thank you very much.

[Whereupon, at 3:52 p.m., the committee was adjourned.]

[The prepared statement of Hon. Elijah E. Cummings and additional information submitted for the hearing record follow:]

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