Alternative drafted for pay system overhaul

A Senate bill introduced this week would kill President Bush's broad overhaul of federal civil service rules and, at most agencies outside of the departments of Defense and Homeland Security, preserve the General Schedule - a pay system that has provided workers with longevity-based raises for more than 50 years.

The bill, introduced by Sen. George V. Voinovich, the Ohio Republican who controls federal worker issues in the Senate as chairman of a key subcommittee, is not likely to appease federal unions entirely. But it does strip changes included in an unsponsored Bush administration proposal, called the Working For America Act, that would have gutted union rights.


Key members of Congress and their staffs have said that Bush's proposal is effectively dead, a victim of unions' victories in legal challenges at Defense and at Homeland Security.

At those agencies, the General Schedule is being wiped out and replaced with pay bands. Currently appeals courts are considering whether top-level officials at those two agencies have the right to override collective bargaining agreements.


For other civil service employees, Voinovich's bill likely would create an improved performance evaluation system on top of the General Schedule, and anyone who did not earn a successful rating or better would be denied a raise.

"This will require a significant commitment on behalf of managers and leaders," Voinovich said in a statement. "Instead of taking one giant bite at the apple, I believe it will be easier for federal agencies to implement enhanced employee appraisals first. ... I am optimistic this will create less anxiety among federal employees."

Paul C. Light, a New York University professor and an expert on the federal bureaucracy, said that without quotas - for instance, forcing managers to rank only 20 percent of their employees "outstanding" - Voinovich's proposal may not have enough teeth to achieve its goal of tying pay to performance.

"It's a laudatory goal, but I suspect that it will create a fair amount of cheating," Light said. "There has been hyper-inflation in federal workers' performance evaluation systems ever since they were created. If you don't attack that particular problem, almost everyone get will get the raise."

According to Light's data, of about 800,000 federal workers on a five-tier performance appraisal system in 2002, less than 2 percent were rated in categories that would have denied them raises under Voinovich's bill.

"You have to discipline the rating system itself and give federal managers the ability to constrain the top ranks," Light said. "If you don't, you haven't done much to change the dynamics within agencies."

Civilian raises

The House of Representatives approved a 2.7 percent pay raise for civilian employees Wednesday, matching the increase it passed for the military in May and adding a half-percent to President Bush's proposal.


The appropriations bill said employees at the Defense and Homeland Security departments were to get the 2.7 percent raise, despite the fact that the two agencies are switching to new personnel systems that eliminate automatic, congressionally set raises.

After the vote, the White House issued a statement saying that the language would "unnecessarily complicate" the new pay-for-performance programs.

In addition, Bush "strongly opposes" the 2.7 percent raise, saying it will cost $600 million more than he proposed for fiscal 2007.

"Any recruitment or retention challenges facing the federal government are limited to a few areas and occupations and are not addressed by arbitrary across-the-board increases," the statement said.

IRS collections

In that same bill, the House switched its position on an Internal Revenue Service program that would hire private collection agencies to go after delinquent taxpayers, voting to kill the program after September.


Fears for taxpayers' privacy, heightened recently by the theft of a government laptop holding data on millions of veterans, as well as failing grades for computer security at the IRS, generated momentum for the about-face.

Colleen M. Kelley, president of the National Treasury Employees Union, said this week that the IRS plan, which would allow contractors to keep up to 24 percent of collections, put "taxpayers' personal and private information at serious risk."

Kelley and other opponents also have argued that IRS employees, who have seen their ranks cut in recent years, could do the work for less.

In its objection to this week's vote, the White House said "similar measures instituted by various states have been met with success, allowing for more efficient collections while safeguarding the privacy rights of individual taxpayers." Maryland outsources some of its tax collection.

Although the IRS announced the selection of the private agencies in March, work has not begun on the program because failed bidders filed protests with the Government Accountability Office.

Health contracts


The Office of Personnel Management is "reassessing" its contracts for federal employees' new dental and vision coverage after its leading health care provider, Blue Cross Blue Shield of America, filed a protest.

Blue Cross Blue Shield was selected to provide vision, but not dental, benefits. OPM spokesman Michael Orenstein would not discuss Blue Cross' protest nor why OPM took the unusual step of "reassessing" the awards, aside from saying the agency wanted "to ensure integrity in the process."

The second round of competition is limited to existing applicants, Orenstein said, adding that the new benefit packages would be ready in time for fall's open season.

"The timeline has not changed," he said.

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