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Effects of Kay Coles James's Efforts at OPM Likely to Be Felt for Years

By Stephen Barr
Tuesday, January 11, 2005; Page B02

K ay Coles James, who announced yesterday that she will leave the Bush administration Jan. 31, likely will be remembered for playing a pivotal role in helping launch policy initiatives that could reshape the civil service for decades to come.

As Congress moved to create the Department of Homeland Security in response to the Sept. 11, 2001, terrorist attacks, and when Congress gave a green light to the Defense Department to shake up its civil service rules, James ensured that OPM was written into the laws as a partner for issuing new workplace regulations.

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Although the laws carry only a few words on OPM's role, they were enough to put James at the side of Homeland Security Secretary Tom Ridge and senior Defense officials, such as Deputy Secretary Paul D. Wolfowitz and Navy Secretary Gordon R. England, in developing new workplace rules.

The departments appear on track, via regulations coming out later this month, to discard the 15-grade General Schedule and replace it with a pay system that more closely ties raises to job performance. The new pay systems, which will be phased in, will affect about half of the government's workforce.

The departments also plan other workforce changes, such as streamlining the process for handling employee appeals of disciplinary action and revamping their labor-management relations. Some of the labor changes could scale back the clout of federal unions at the departments, and the changes will not be greeted warmly when imposed.

James, though, was able to strike a cooperative relationship with John Gage, president of the American Federation of Government Employees, and Colleen M. Kelley, president of the National Treasury Employees Union, during talks to revamp workplace rules at Homeland Security.

But Pentagon officials and unions have clashed over plans for revising civil service rules at the Defense Department, in part because unions believe that Pentagon officials opted to shut them out from the start.

James named a special adviser to help get talks on track last year, but union officials have faulted James for endorsing a regulatory approach that they believe leaves them to act as consultants but not as employee representatives who can bargain on behalf of the workforce. They contend that James favors broad and vague regulations that will give too much leeway to the department and undermine civil service safeguards.

Yesterday, James said that she understands such criticism but that she has consistently backed a "transparent" approach that follows the law and allows agencies to adopt flexible management practices.

In an interview, she portrayed the changes underway in the civil service as "a very complex stew." She credited other cooks for helping make policy changes, such as David M. Walker, head of the Government Accountability Office, Sens. George V. Voinovich (R-Ohio) and Susan Collins (R-Maine) and Reps. Thomas M. Davis III (R-Va.) and Frank R. Wolf (R-Va.).

The terrorist attacks on the Pentagon and World Trade Center gave Americans a renewed understanding of the importance of the work done by federal employees and "created the right atmosphere and the right opportunities for change," she said.

James said the attacks also brought home the importance to her of emergency preparedness and emergency drills in federal buildings to protect employees. Convincing agency managers and employees to take it seriously became one of her top goals, she said.

During her tenure, James worked with the National Treasury Employees Union to provide flexible spending accounts to federal employees. FSAs allow employees to contribute pretax income each year to pay for out-of-pocket medical and dependent-care expenses. She also championed health savings accounts, which give employees a chance to build up savings while assuming more responsibility for their care, in the federal health insurance program. HSAs are a Bush administration priority, and James introduced them into the federal employee program against the wishes of the National Association of Retired Federal Employees.

James said she has no firm plans but will pursue opportunities in the private sector. Asked what she will miss most at OPM, James said it was the "tremendous opportunities to make a difference in people's lives."

She added, "I think for those of us who love service and who love public service, when you no longer have that opportunity . . . you have to wake up every day and look for significance in your life."

Diary Live

Stephen Goldsmith and William D. Eggers, authors of "Governing by Network: The New Shape of the Public Sector," will take questions and comments at noon tomorrow on Federal Diary Live at www.washingtonpost.com. Please join us.

Staff writer Christopher Lee contributed to this column.

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