A Debate Over Paychecks and Balances

By Stephen Barr
Wednesday, August 1, 2007

A House subcommittee yesterday delved into the subject of federal pay:

Are federal employees overpaid or underpaid? Are pay caps creating instances where subordinates are paid more than their bosses? Are agencies using higher pay scales to raid employees from other agencies? Do new performance-based pay systems treat employees fairly?

There were few clear-cut answers on an issue important to nearly 2 million federal employees and Congress.

The Bush administration contends that the General Schedule, which advances employees through 15 grades based on their time in the job and performance, is antiquated. The White House has lobbied Congress to create pay systems that link pay raises more closely to job evaluations. Two new systems are being used, at Defense and Homeland Security departments.

The majority of rank-and file employees are paid through the General Schedule, created in 1949. Its last major modification came in 1990, when Congress added a "locality pay" supplement, or a raise aimed at keeping federal salaries from falling behind private-sector rates in 32 areas, mostly big cities.

Danny K. Davis (D-Ill.), the chairman of the House federal workforce subcommittee, who called the hearing, said there is concern, as federal agencies experiment with methods of determining pay, that employees will find it more difficult to transfer from one agency to another.

He noted that from 2001 to 2005, more than 50,000 employees transferred between agencies and their base pay increased by about $1,800.

But Linda M. Springer, director of the Office of Personnel Management, told Davis that staying with a "1950s vintage system is just unfair" to many federal employees. Rank-and-file employees, she said, should be given the opportunity to earn bigger paychecks because of superb job performance and not be limited by a system that just "pays people to show up for work."

Part of the problem is that the 1990 locality pay law has not worked as intended. The law was not implemented as planned, in part because of budget concerns and in part because the White House has worried it could lead to overpaying some federal workers.

The White House or Congress has overridden the law multiple times in recent years and provided reduced amounts of locality pay from 1995 through 2007, according to testimony by Curtis W. Copeland, a government specialist at the Congressional Research Service.

Even with the law only partially funded, overall pay costs have gone up as the government increasingly hires well-educated professionals to run increasingly complex programs. Federal civilian compensation costs were nearly $100 billion in fiscal 2006 and will approach $110 billion in 2008, Copeland said.

Despite concerns that the system may not be working as intended, the subcommittee did not hear any calls for major changes.

The most recent government-wide survey, conducted in 2006, found that 61 percent of federal employees were satisfied with their pay. In the Washington area, the average federal salary is about $88,500, according to the OPM.

Rep. Patrick J. Kennedy (D-R.I.) and Del. Eni F.H. Faleomavaega (D-American Samoa) appeared as witnesses to point out what they believe is unfair treatment of federal employees in their districts.

Kennedy urged higher pay for Rhode Island blue-collar federal workers, saying they should be paid on a scale similar to their counterparts in Boston. Faleomavaega said American Samoa federal employees do not receive cost-of-living adjustments, even as those adjustments are paid federal workers in other high-cost parts of the Pacific, such as Hawaii.

Springer said her chief legislative goal is to obtain congressional approval to increase the maximum pay rate for about 900 senior-level and senior technical positions in the government, using a performance-based system similar to that covering more than 6,000 federal executives. If the change is approved, the 900 employees would be eligible to receive a maximum base salary of $168,000, up from $145,500.

View all comments that have been posted about this article.

© 2007 The Washington Post Company