Rivlin acknowledges burden of cuts is unfair


WASHINGTON -- One of President Clinton's top economic advisers admits that the administration's budget proposals place an unfair burden on federal workers, but she says the salary freeze and other measures are necessary to prove that the government is also making sacrifices.

"There is no question, when all the calculations are looked at, that federal employees are being asked to sacrifice more than the country at large," Alice Rivlin, deputy director of the Office of Management and Budget, told a House civil service subcommittee last week.

"The president's message is that the government must tighten its belt first to prove it can run its own operation efficiently," Ms. Rivlin said. But she added that the administration is open to alternative proposals as long as they provide equivalent savings.

Mr. Clinton's budget plan, which includes a freeze on federal salaries, reduced cost of living adjustments, and a 20 percent increase in federal insurance premiums, came under heavy fire from subcommittee members, including Maryland's Rep. Constance A. Morella, R-8th.

Lawmakers and witnesses from the General Accounting Office and Congressional Budget Office were particularly critical of the proposal to delay implementation of regional pay adjustments until 1995. The government for years has had difficulty recruiting and retaining high-quality employees because its salaries average 25 to 30 percent below comparable private-sector jobs.

After several years of negotiations, Congress and the Bush administration agreed to the locality pay raises in 1990. The plan is being implemented first in the metropolitan areas of New York, San Francisco and Los Angeles.

Mrs. Morella, who said that the proposed locality pay delay "is making many people very, very jittery," asked Ms. Rivlin if the administration had considered applying it only to employees in the upper grade levels. Ms. Rivlin replied that the idea had been considered and rejected because it "would save less money. . . . We were driven by the bottom line."

Ms. Rivlin was adamant that the locality pay increases are necessary. "There is no question [the delay] is unfair," she said. "We believe in locality pay, [but] we believe we cannot afford to implement it this year."

Her boss, OMB director Leon Panetta, may be more flexible on the issue, however, according to Del. Eleanor Holmes Norton, D-D.C., subcommittee chairwoman.

Ms. Norton, a Democrat, said that in a meeting last week with Mr. Panetta, the former House Budget Committee chairman "indicated that he, too, was concerned and said he was willing to work with this subcommittee."

Both Mr. Clinton, in his budget address to Congress, and Ms. Rivlin, in her testimony, offered to consider alternatives to the administration proposals. These alternatives were proposed at the hearing:

* James L. Blum, deputy director of the Congressional Budget Office, suggested a one-time, 2 percent pay cut for all federal workers rather than the 1994 pay freeze and COLA reduction in 1995-1997. His proposals would reduce wages by only 2 percent, however, compared with the Clinton plan's 5 percent.

* The administration could cut agencies' budgets to a targeted level and let agencies decide where the cuts would come, Mr. Blum said. This would encourage administrators to streamline operations and become more efficient.

* The government could cut entire programs to eliminate 165,000 employees on top of the 100,000 proposed by Mr. Clinton, said Mr. Blum. This would accomplish the same savings as all of the proposed wage and benefit reforms.

* Ms. Norton also suggested deeper cuts in the federal work force -- 150,000 instead of the proposed 100,000. Other savings could come from scheduling government-wide furlough days, and by reducing the use of private contractors and the ratio of managers to other employees from the current 5-1 to the private-sector average of 11-1.

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