Discussions on the federal workforce since the late 1990s have focused on the management ofhuman capital. The term "human capital" refers to "a concept that views employees as assets in thesame sense as financial capital ... [and] presupposes that an investment in human potential will yieldsignificant returns for the organization." (1) Humancapital also "describe[s] what an organizationgains from the loyalty, creativity, effort, accomplishments, and productivity of its employees." (2) Theeconomist Lester C. Thurow defined human capital as: an individual's productive skills, talents, and knowledge. It is measured in terms of the value (price multiplied by quantity) of goods and servicesproduced. Since consumption is the ultimate goal of our economic system, the value of a man'scapital is the same as the value of the consumption goods and services which he directly or indirectlyproduces. When the value of goods and services rises, the value of human capital rises. When thevalue of goods and services falls, the value of human capital falls. (3) To the General Accounting Office (GAO), human capital is "an organization's people," "its most critical asset in managing for results," and "assets to be valued." (4) In January 2001, GAO addedstrategic human capital management to its list of high-risk areas in the federal government. According to GAO, human capital challenges met the three criteria for high risk: they "are evidentat multiple agencies"; they "affect a significant portion of the government's total budget or otherresources"; and they "should be monitored and addressed through individual agency actions as wellas through OMB [Office of Management and Budget] and OPM [Office of Personnel Management]initiatives, legislative action, and/or congressional oversight." GAO found that federal workforcereductions were conducted without sufficient planning for their effects on agency performance. Agencies also reduced investments in performance rewards, enabling technologies, and training andprofessional development programs. GAO also determined that many agencies anticipate rapidturnover of top leadership and managers. About 45% of the career Senior Executive Service willbecome eligible to retire by FY2005 and are expected to retire. (5) In a January 2003 update of the high risk designation, GAO acknowledged the administration's placement of strategic management of human capital at the top of the President's managementagenda and the authority for a new personnel system and additional governmentwide personnelflexibilities enacted in P.L. 107-296 , the Homeland Security Act of 2002. "Nevertheless, despitebuilding momentum for comprehensive and systematic reforms," according to GAO, "[t]he basicproblem, which continues today, has been the long-standing lack of a consistent strategic approachto marshaling, managing, and maintaining the human capital needed to maximize governmentperformance and assure its accountability.... [T]he problem is a set of policies that are viewed bymany as outdated, overregulated, and not strategic." (6) As the 106th Congress was drawing to a close, the then-chairman of the Senate Committee on Governmental Affairs, Senator Fred Thompson, and the then-chairman of the Senate Subcommitteeon Oversight of Government Management, Restructuring, and the District of Columbia, SenatorGeorge Voinovich, published committee and subcommittee reports that included recommendationsto address challenges in managing the federal government and its human capital, given the possibilitythat a significant number of federal employees would be eligible to retire by 2004. (7) The Administration of President George W. Bush submitted a legislative proposal entitled The Managerial Flexibility Act of 2001 to Congress on October 15, 2001. OMB described the proposalas "a key component of the Bush Administration's 'Freedom to Manage' initiative ... to eliminatelegal barriers to effective management." (8) Theproposal included provisions on personnelmanagement flexibilities, including voluntary separation incentive payments, voluntary earlyretirement, recruitment and retention bonuses and relocation allowances, academic degrees, theSenior Executive Service, personnel management demonstration projects, and direct hire. Provisions similar to those in the President's proposal were part of legislation to change various policies related to managing the federal workforce that were considered in the Senate and the Houseof Representatives in the 107th Congress. Senator Voinovich introduced S. 1603 , theFederal Human Capital Act of 2001, on October 31, 2001, and S. 1639 , the FederalEmployee Management Reform Act of 2001, on November 6, 2001. Senator Thompson introduced S. 1612 , the Managerial Flexibility Act of 2001, on November 1, 2001. (9) The bills werereferred to the Senate Committee on Governmental Affairs. The committee's Subcommittee onInternational Security, Proliferation, and Federal Services conducted two days of hearings on thelegislation on March 18 and 19, 2002, taking testimony from the Office of Personnel Management,the General Accounting Office, employee organizations, and several scholars who have studiedfederal workforce issues. (10) RepresentativeConstance Morella introduced H.R. 4580 ,the Good People, Good Government Act, on April 24, 2002, and it was referred to the HouseCommittee on Government Reform. Senator Daniel Akaka, chairman of the subcommittee, said that the hearings "continue[d] the dialogue on what needs to be done to make government service more attractive to young people andto inspire and compensate those who have chosen government as their job choice." He stated that"[t]here must be a commitment from the highest levels of government and a willingness to allocatethe resources necessary to achieve a strong and vibrant workforce." (11) During his testimony beforethe subcommittee on March 19, 2002, Paul C. Light of the Brookings Institution noted that "[p]astefforts to restore the luster of federal service have been hampered by a lack of interest in incrementalaction." He commented that the pending legislation "would clearly increase government's ability tocompete for talent" and should be "viewed as first, not final, steps in what will ultimately amountto an historic restructuring of the federal government's human capital system." (12) Following the Senate committee hearings, Senator Voinovich, joined by Senators Fred Thompson and Thad Cochran, revised some of the provisions in S. 1603 and S. 1639 , as introduced, and merged them into one bill, S. 2651 , the FederalWorkforce Improvement Act of 2002, introduced on June 20, 2002. Several of the S. 2651 provisions, including those on agency Chief Human Capital Officers, alternative ranking andselection procedures, voluntary separation incentive payments, the repeal of recertificationrequirements for the Senior Executive Service, academic degree training, and modifications to theNational Security Education Program, were enacted in P.L. 107-296 , The Homeland Security Actof 2002, signed by President George Bush on November 25, 2002, and are applicablegovernment-wide. (13) The Office of PersonnelManagement (OPM) is currently crafting a new humanresources management system for the department. No further action was taken on any of the other107th Congress bills. In the 108th Congress, S. 129 , the Federal Workforce Flexibility Act of 2003, passed the Senate with an amendment by unanimous consent on April 8, 2004. Senator Voinovichintroduced S. 129 on January 9, 2003, and the bill was referred to the Senate Committeeon Governmental Affairs. On October 22, 2003, the committee ordered the bill to be reported withan amendment in the nature of a substitute, after agreeing by voice vote to an amendment offeredby Senator Akaka making political appointees ineligible for the enhanced recruitment, relocation,and retention bonuses and adding reporting requirements on the bonuses. S. 129 wasreported on January 27, 2004. (14) The committeesubstitute, as amended, was agreed to by the Senateby unanimous consent on April 8, 2004. In the House of Representatives, the Subcommittee on CivilService and Agency Organization of the House Committee on Government Reform marked up S.129 on May 18, 2004. Before forwarding the legislation to the full committee, thesubcommittee agreed by voice vote to an amendment in the nature of a substitute offered byRepresentative Jo Ann Davis and en bloc amendments offered by Representative Danny Davis. Theen bloc amendments related to making political appointees ineligible for the enhanced recruitment,relocation, and retention bonuses and adding reporting requirements on the bonuses. On June 24,2004, the House committee ordered the bill to be reported to the House of Representatives by voicevote, after agreeing, by voice vote, to an amendment in the nature of a substitute offered byRepresentative Jo Ann Davis. Another bill related to management of the federal workforce was introduced in the House of Representatives on April 3, 2003. Representative Jo Ann Davis introduced H.R. 1601 ,the Federal Workforce Flexibility Act of 2003, and it was referred to the House Committee onGovernment Reform. As introduced, S. 129 and H.R. 1601 were identicalexcept for one provision relating to personnel demonstration projects. (15) Both bills include a numberof the provisions that were in S. 2651 (107th Congress). S. 129 , as passed by the Senate and as ordered to be reported to the House, would amend current law provisions on critical pay, civil service retirement system computation forpart-time service, agency training, and annual leave. The bill also would amend current lawprovisions on recruitment and relocation bonuses and retention allowances (which would be renamedbonuses). As ordered to be reported to the House, S. 129 would amend the current 5U.S.C. ï¿½ï¿½5753 and 5754 language on such bonuses and allowances. As passed by the Senate, itwould add new sections 5754a and 5754b on recruitment, relocation, and retention bonuses to Title5 United States Code .