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Perennial issue of pay parity returns


FIGHTS OVER two issues that threaten civilian jobs and pay raises already are beginning in Congress just months after last year's wrangling ended.

The first, and perennial, debate is over pay parity. President Bush has again proposed a larger raise for members of the military than for civilian employees in his 2006 budget -- 3.1 percent versus 2.3 percent.

It is the president's fifth such attempt, but so far Congress has overturned the disparity every year.

Despite the streak, civilian workers worry -- and fiscal conservatives hope -- that the pattern will cease every year. Civilians have not received smaller raises than the military since 1986, according to the 2005 Federal Employees Almanac.

But Beth Moten, of the American Federation of Government Employees, warns that new leadership of key congressional committees makes this year's fight more unpredictable.

Pro and con: Advocates for lean government consider smaller civilian raises a necessary cost-saving measure amid a rising federal deficit and budget. Last year's discrepancy, if Congress had approved it, would have saved $2.2 billion, said Pete Sepp of the National Taxpayers Union, a group pressing for smaller government and tax cuts.

The White House and some Republicans also have argued that members of the military deserve more because of their efforts in Iraq and Afghanistan.

Proponents of pay parity, however, said that soldiers already receive combat and hardship pay, and that annual raises for the civilians supporting or working beside them should be equal.

"This is just a way for the president to submit a budget that's lower than it's going to be in the end," said Rep. Chris Van Hollen, a Maryland Democrat. "It's part of the budget dance."

Recent history: In 2005, Bush proposed a 1.5 percent raise for civilians. Congress made it 3.5 percent. The year before that, Bush proposed 2 percent. Congress made it 4.1 percent.

Action so far: Rep. Tom H. Allen, a Maine Democrat, and Democratic Sen. Paul S. Sarbanes of Maryland tried to bump up the civilian raise in budget committees in March, but then dropped their proposals after the committees' chairmen opposed the idea.

Timeline: House and Senate appropriations subcommittees will take up the measure next, likely next month.

Key players: Sen. Thad Cochran, a Mississippi Republican, and Rep. Jerry Lewis, a California Republican, are chairmen of the Senate and House appropriations committees, respectively.

Lewis took control of the influential committee at the beginning of the year as part of a GOP effort to tighten control over spending. However, Jim Specht, a spokesman for Lewis, said he has not taken a position on the issue.

Health costs and contracts

The second issue resurfacing this year is whether health care costs should factor into outsourcing decisions.

During standard competitions, which typically affect more than 65 jobs, the federal government hires a contractor solely because it can do the job for $10 million, or 10 percent less, and little attention is paid to how that is achieved.

But unions allege that those savings often come from companies offering cheaper retirement and health insurance benefits than the federal government.

Last fall, federal unions pushed a clause into a Defense Department spending bill that prevents contractors from getting a competitive advantage by offering inferior health insurance plans.

The bill would also require the Pentagon to consider whether a contractor's employees would pay for a greater portion of their health care than federal workers.

The new rule has not been tested because the Defense Department has not completed a competition since the bill passed, said Joe Sikes, the department's director of competitive sourcing and privatization.

Pro and con: Sikes said the rule is too onerous and could potentially skew competitions in federal workers' favor and drive away small businesses, who cannot afford as heavily subsidized health plans as the federal government.

Sikes said that to implement the rule, contractors would be required to submit a break-down of labor costs.

If the contractor won the competition, but its health plan was deemed insufficient, Sikes would then raise the contractor's health insurance costs to match the feds'.

If, with the higher health insurance, the contractor still won, then the job would be outsourced. If the contractor lost, the in-house team would win, despite the fact that an outside group could do it cheaper.

"Whenever we have to take a proposal and do arbitrary adjustments, it's a problem because the losing side assumes we cheated," Sikes said.

However, John Threlkeld of AFGE said that the policy makes the process more fair.

"The federal government shouldn't be adding to the number of under-insured workers in America," he said.

Recent history: AFGE tried to get this provision passed governmentwide last year but failed.

Action so far: The Office of Management and Budget and the Small Business Administration have written Congress lobbying to omit the rule this year, and 22 Democratic members of Congress have written Defense Secretary Donald H. Rumsfeld saying that they will oppose such efforts.

Timeline: Last year, the rule was inserted in June during a House subcommittee's adjustments to the bill.

Key players: Rep. C.W. Bill Young, a Florida Republican,, and Republican Sen. Ted Stevens of Alaska, chairmen of the House and Senate defense appropriations subcommittees, respectively.

The writer welcomes your comments and story ideas. She can be reached at or 410-715-2885.

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