The "Foreign Service Overseas Pay Equity Act of 2008," H.R. 3202 , as amended, would eliminate, over three years, the pay difference between those Foreign Service personnel serving in Washington, D.C. and those serving abroad who are not eligible for a locality pay adjustment. This bill was referred to both the House Committee on Foreign Affairs (HCFA) and the House Committee on Oversight and Government Reform (HOGR). On July 16, 2008, HCFA favorably reported the bill by voice vote. On August 1, 2008, an identical companion bill was introduced in the Senate, S. 3426 , and referred to the Senate Committee on Foreign Relations (SFRC). On September 23, SFRC considered and reported S. 3426 , without amendments. On July 16, 2008, the Senate Committee on Appropriations reported its FY2009 Department of State, Foreign Operations and Related Programs appropriations bill, S. 3288 . In its bill, the Senate Appropriations Committee met the Administration's request for funding needed to eliminate the existing 20.89% pay differential over two years. At a time when 55% of U.S. Foreign Service personnel are serving at a hardship and/or danger post, the 110 th Congress, in its closing days, may choose whether and how to address an issue that both the Department of State and the Foreign Service consider to be a high priority personnel issue—the elimination of a 20.89% pay difference between service in the Washington, D.C. and service abroad for the vast majority of the members of the Foreign Service below the Senior Foreign Service level. The pay difference is the result of federal locality pay laws not covering the salary of federal employees posted abroad. While opponents question the need for a change in the compensation system because of the other allowances and benefits that Foreign Service often get when serving abroad, proponents for the elimination of the pay difference contend that the disparity has negative implications on the morale of the Foreign Service, considerations about overseas assignments, and possibly eventually on retention. Both the Department of State and the American Foreign Service Association (AFSA), the professional association and the recognized bargaining agent for the Foreign Service, said the elimination of this pay disparity is very important to them. During the 109 th Congress, Republican and Democratic leadership of both the House Committee on International Relations and the Senate Committee on Foreign Relations worked to resolve this pay differential issue by developing a proposal called the Foreign Service Compensation Reform. The Administration had agreed to the creation of a new Foreign Service pay compensation system if it were performance-based. This proposal—developed through negotiations among the House and Senate committees, the Administration, and AFSA—would have (1) placed the Foreign Service compensation system on a pay-for-performance (PFP) basis with pay adjustments made only on the basis of performance and not longevity, and (2) eliminated the current pay difference by creating a new worldwide pay structure at the Washington, D.C., salary level over two years. However, reportedly due to concerns among the House floor managers as to whether there was sufficient support for passage, this proposal was not included in the final version of H.R. 6060 , the Department of State Authorities Act of 2006, which was originally intended to carry the Foreign Service Compensation Reform proposal and a few other provisions. H.R. 6060 was passed by the House and Senate, and enacted as P.L. 109-472 . For the 110 th Congress, the Administration, in its FY2009 budget request, urged the enactment of legislation creating a new performance-based compensation system for the Foreign Service along the lines of the 109 th Congress PFP compromise, and requested the appropriation of $35.9 million to implement the first of two phases of the new compensation system. On July 16, 2008, the Senate Appropriations Committee reported its FY2009 State Department/Foreign Operations and related programs appropriations legislation, S. 3288 . This bill provided sufficient funding levels to meet the Administration's request. On the same day, the House Committee on Foreign Affairs (HCFA) favorably reported the "Foreign Service Overseas Pay Equity Act of 2008," H.R. 3202 , as amended, which, without providing for a performance-based pay system, would eliminate the pay disparity over three years. This bill, which was introduced by Representative Chris Smith and has 29 cosponsors, was referred to both HCFA and HOGR. On August 1, 2008, Senator John Kerry, with five cosponsors, introduced an identical companion bill, S. 3426 , which was referred to the SFRC. On September 23, 2008, the SFRC considered and reported S. 3426 without amendments. The Foreign Service personnel system, like the Civil Service system, has salary ranges associated with various ranks, and within those ranges there are "step increases" in salary that a person can receive over time, even without a promotion. While the Administration is seeking changes to the personnel system to make it performance-based, Foreign Service personnel believe that its personnel system is already a performance-based system. Members of the Foreign Service point to elements of their personnel system, such as annual promotion reviews by independent promotion panels instead of by one's supervisor, an "up-or-out" system with specific time limits for promotions, and a mandatory five percent low ranking requirement that can lead to separation from the Service that, they believe, makes it performance-based. Former AFSA President, Ambassador J. Anthony Holmes, said, "The reality is that the present FS personnel system, with its rank-in-person, not in-job, annual evaluations, and competitive up-or-out system is inherently PFP already." The Foreign Service personnel system, which is separate and quite different from the Civil Service system, was created under the authorities provided by the Foreign Service Act of 1980 ( P.L. 96-465 ; 22 U.S.C. 3901 et seq.). In 2008, there are currently about 11,500 State Department Foreign Service Officers and Specialists, with two-thirds of them serving abroad at over 260 posts and missions at any one time. The remaining third is generally posted in Washington, D.C. Typically, members of the Foreign Service spend two-thirds of their careers abroad, serving at each post for one to three years before being assigned elsewhere in the world. Currently, about 55% of Foreign Service personnel are serving in posts designated as hardship and/or danger posts. Members of the Foreign Service cannot spend more than six years at a time serving in domestic assignments. The Director General of the Foreign Service, on a case-by-case basis, may provide a waiver of up to two years if a member of the Service seeks to extend his or her stay in the continental United States beyond six years. Foreign Service personnel carry their rank-in-person as opposed to rank-in-position as the Civil Service generally does. Thus a member of the Foreign Service can advance in rank on the merits of his or her performance, while a member of the Civil Service often can only advance beyond the rank designated for a position by successfully competing for an open position at a higher rank. Grades or ranks within the Foreign Service are divided into two major categories: the Senior Foreign Service (SFS), of which there are about 600 individuals, and the regular Service which is comprised of about 10,500 Officers and Specialists. The SFS is divided into five pay categories and, like the Civil Service Senior Executive Service (SES), requires a presidential appointment into the senior service. The regular Foreign Service is divided into nine ranks or grades with the 01 level the highest. Most Foreign Service Officers enter the Foreign Service at the 05 or 06 levels while some Specialists may enter at lower grades. Generally entering Officers serve for four to five years before being tenured and fully commissioned as Foreign Service Officers, usually at the 04 rank. Generalist Foreign Service Officers are assigned to one of five cones upon entry into the Foreign Service—Political, Economic, Public Diplomacy, Management, and Consular. However, during their career, they will do assignments outside of their cone. The personnel system for the Foreign Service is basically an "up-or-out" system that reviews the members of the Foreign Service annually for promotion unless they have been promoted within the previous year. Promotion panels, each usually consisting of four or five higher grade officers and a public panelist, are formed each year to consider the members of the Foreign Service at ranks of 04 and above for promotion. Those Foreign Service personnel below the 04 rank, who are neither tenured nor commissioned, receive Administrative Promotions at the discretion of the Director General. Promotion panels are generally organized to compare individuals in the same rank and cone. For instance, one promotion panel reviewed 02 political officers and management officers—160 Management and 240 Political Officers. Criteria or precepts for promotion are negotiated between the Department and the American Foreign Service Association (AFSA), currently the recognized bargaining agent for the Foreign Service. Promotion panels begin by reviewing the Employee Evaluation Report files, which can go back five years or to the previous promotion. In most cases, there are fewer available open positions than there are individuals determined to be promotable by the panel. The panel then rank orders those promotable to fill the slots accordingly. After making its promotion decisions, the panel makes its recommendations to the Secretary of State who reviews and forwards them to the Senate. The Senate has the responsibility of approving the promotion lists developed by the promotion panels and recommended by the Secretary of State. Promotion panels are also required to "low-rank" five percent of those reviewed for promotion. The panel then recommends to the Secretary of State whether those individuals should be referred to the Performance Standards Review Board for possible separation from the Service or should be provided a letter for the individual's file, instructing the individual to take career counseling.