By Stephen Barr
Tuesday, December 18, 2007

Federal employees have a sizeable stake in this week's debate over the year-end, catch-all spending bill before the Congress -- starting with their pay.

Most civil service employees would receive an average raise of 3.5 percent next year, under the fiscal 2008 consolidated appropriations bill that was unveiled yesterday. That is slightly more than the 3 percent average that President Bush authorized in a Nov. 28 directive.

The catch-all bill is necessary because Congress and the White House did not reach agreement on almost any of the annual spending bills that fund the government -- the defense bill being the exception.

The catch-all bill would also permit Customs and Border Protection officers to receive law enforcement retirement benefits, which are more generous than regular civil service pensions. The CBP officers will be able to convert to the law enforcement system by July.

In the contentious area of contracting, the bill would strengthen the hand of employees to keep their jobs when agencies want to put their work up for bid in the private sector. One controversial program, outsourcing the collection of overdue taxes, would continue, however.

Agency officials and lobbyists spent much of yesterday sorting through the bill, which increases funding for some programs and takes it away from others. For example, the departments of Labor and Health and Human Services and related agencies would be directed to take an across-the-board cut of about 1.7 percent. But funding for the Social Security Administration would increase so that the agency could work through a growing backlog of disability claims.

Some personnel policy disputes also would be resolved by the catch-all bill.

It provides no money for a new human resources and pay system, originally called MaxHR, at the Department of Homeland Security. Instead, the bill would provide $10 million to address morale and other issues that were identified in a 2006 employee attitude survey. The department ranked near the bottom in the employee ratings.

In addition to providing the government-wide pay raise, the bill would ensure that unionized employees at the Defense Department receive the recommended 3.5 percent raise.

The Pentagon is rolling out a pay-for-performance system for Defense employees that has been opposed by key unions in the department. While the new system does not apply to unionized workers at Defense, the bill would guarantee that regular pay raises continue in 2008.

Meanwhile, a separate bill, approved by the House and Senate, would address future pay raises for Defense civilians. It guarantees that employees performing their jobs in an acceptable manner would receive 60 percent of the annual raise provided most other government workers, with the remaining 40 percent used for performance-based salary increases.

Congressional Democrats and Bush have differed over pay issues for much of this year. Although Bush has raised objections, Democrats hope that he and conservative Senate Republicans will accept their pay plans as part of the many compromises in the year-end legislation. The House and Senate plan to wrap up the legislation this week.

It is something of a surprise that the bill includes a provision that would grant law enforcement retirement benefits to the more than 17,000 officers at Customs and Border Protection. The officers have not been eligible for the more generous pensions that other federal law enforcement officers receive, even though they carry weapons, make arrests and can be called upon to help capture criminal suspects.

The issue has been a sore point for years with the officers, who have been repeatedly told that law enforcement retirement would be too costly for the government. But Colleen M. Kelley, president of the National Treasury Employees Union, which represents CBP officers, said efforts to find a remedy intensified during the past 18 months.

Starting in July, CBP officers would be eligible to retire with 20 years of service at age 50 or after 25 years of service at any age. In addition, the officers would be able to qualify for the more generous law enforcement pension based on every year worked after July 1. Many current officers will be eligible for a hybrid pension, based on their regular civil service retirement credits and their law enforcement credits.

On the issue of outsourcing federal work, the bill would take some previous restrictions that have had to be renewed on an annual basis and make them permanent.

The bill, for example, would require contractors to show a savings of at least 10 percent or $10 million over the federal cost to win a competition. Federal employees also would get the right to ask the Government Accountability Office, an arm of Congress, to review a contracting decision if the employees thought it was unfair or biased.

Diary associate Eric Yoder contributed to this column. Stephen Barr's e-mail address isbarrs@washpost.com.