Federal Diary Live

Stephen Barr
Washington Post Columnist
Wednesday, January 2, 2008; 12:00 PM

The Post's Stephen Barr writes the Federal Diary column, which runs Monday through Friday in the Business news section. Steve has been a reporter and editor at The Post since 1979, including stints as Federal Page editor, congressional editor and a National staff writer covering federal management and workplace issues. He began writing the column in May 2000, and took the column live Wednesday, Dec. 12 at noon ET to explain what the fiscal 2008 budget standoff means to federal employees -- especially at the Defense Department, where 100,000 layoffs are being planned.

The transcript follows.

Archive: Federal Diary Live transcripts


Stephen Barr: Welcome to 2008! Great to be back after a year-end break. I'm looking forward to your comments and what you see as important in the coming year. Thanks for joining in this discussion.


Washington: At my agency, salaries are direct-deposited into our bank accounts every other Monday. This year, to ensure that all employees are paid in the same calendar year, the administration delayed our December 31 deposit until today. Because it is a new tax year, those of us who had hit our Social Security tax ceiling ($97,500) are paying it again. Social Security tax would not have been deducted if we'd received our salaries on the scheduled date of December 31. This comes to hundreds of dollars for many of us. How can they do this, and what if any recourse do we have?

Stephen Barr: A good question, Washington, and I've no idea how this kind of practice gets justified. I'm curious if you are paid through one of the big payroll processing centers, such as the one run by the Agriculture Department, and would suggest that this is a matter for your management team to address.

Regret to hear that '08 has started out as a bummer for you.


San Diego: Why are we (retirees) now receiving our pay the day after a holiday or if the 1st falls on a Saturday, we aren't being paid until Monday? Also, is the government ever going to change the windfall provision allowing federal retirees to collect their full Social Security benefits? After all, we worked for them.

Stephen Barr: San Diego, I don't know. Looks like I need to go to payroll school to handle these day-of-deposit questions!

As for the windfall elimination provision, I doubt that Congress will repeal it. The cost is about $40 billion, according to congressional staff, and with Congress trying to balance the budget, it's difficult to find support for repealing the WEP. But it may be modified at some point, or perhaps it could be a part of a larger Social Security reform package. But I'm not hopeful that we will see any change anytime soon.


Virginia: Where's the uproar about NSPS? We've just gone through our first rating cycle under it, and my payout looks like it is going to be lower than it would have been under the GS system -- and that's with an above-average rating. When you figure in that a person would have gotten the cost of living/general schedule increase equal to a few thousand, plus a step increase plus a bonus, I estimate that I'm going to come out at least $1,000-$2,000 under. This is supposed to be a way to reward good performers?! Yeah, right.

Stephen Barr: Thanks for the feedback. My guess is that lots of people are waiting to see the first paycheck under NSPS, and that may be a couple of weeks from now.

Congress stepped in to modify the NSPS pay raise policy, but the provision is part of the defense authorization bill that has been vetoed over an Iraq-related issue. Have not heard from NSPS on how it plans to proceed, given that Congress will change how pay calculations are made.


Washington: As a response to the first question, I would suggest that getting paid in 2008 will benefit the individual at the end of this year when they stop taking out Social Security taxes a bit earlier because he/she will reach the limit earlier.

Stephen Barr: Good point. Still, when a paycheck rolls over into the next year, what does that mean for TSP, flex spending accounts, and any other tax-based benefits? (As you can tell, math and taxes are not my strong points.)


Washington: Me again with the Social Security tax problem. Yes, we are paid through the USDA processing center. We are a very large agency. At the moment we plan to complain to management. I expect the usual buck-passing to occur, with no redress.

Stephen Barr: Thanks for the response! Note the point made by the poster above. Good that you are taking it to management; you might also want to consider the Office of Personnel Management, which sets the governmentwide pay rules, I believe.


Rockville, Md.: I'm interested in applying to the NSA. Any advice for applying to a top-secret agency? Does the process differ from other government agencies?

Stephen Barr: Honesty is the best policy. You probably will be screened for a security clearance, and the vetting process may be a little more intense, assuming you are trying to obtain a sensitive position. But, in general, it should not be too different from the rest of the government.


Columbia, Md.: Any word on when the President will issue the Executive Order to implement the 3.5 percent overall 2008 pay raises? Thanks.

Stephen Barr: Not yet. But it should be in a few days.


Silver Spring, Md.: Hi there. I am under a special salary rate. When can I expect to see my new rate table? Thanks.

Stephen Barr: If your agency has requested that special pay rates continue, then OPM should be publishing them soon.


Washington: I am about to become a federal employee in February. My appointment letter (sent in December) indicated my salary and GS level, which at the time was given in 2007 amounts. Has the proposed pay raise for 2008 been approved? If not, when can we expect the final 2008 salaries to be set?

Stephen Barr: Yes, an average 3.5 percent pay raise has been approved for 2008, and the president will soon issue an executive order that spells out the locality pay supplementals. I'll write it up for the column as soon as I learn the details.


Arlington, Va.: As always, the annual pay raise has raised so much confusion. I cannot get a firm answer on what the total pay raise for D.C. federal workers is. According to OPM Web site, they cannot publish the official pay tables until the president issues an executive order regarding the pay raise. However, I thought he had signed the appropriations bill that contained the pay raise. I have heard that Washington metro workers will get either 3.5 percent, 3.99 percent or 4.49 percent! Do you have any insight on what the raise actually will be?

Stephen Barr: The preliminary word is that Washington-Baltimore employees will receive a 4.49 percent raise, once the locality formula kicks in. The governmentwide average raise will be 3.5 percent, according to the legislation signed by the president.

But nothing is really official until President Bush issues the executive order and OPM posts the final pay tables.


Washington: Regarding the people who are crying foul with the change from general schedule (and automatic step increases/COLA increases) vs. the pay-for-performance increases: I work in the nonprofit world, and have been at three well-endowed, stable, large nonprofits. Yet even with top performance evaluations each year, I was lucky to get cost of living raises. Money is always tight, and raises are doled out infrequently and with great deliberation. It amazed me when my brother talks about "only" a 4 percent raise or bemoans a year without a step increase.

Stephen Barr: Good point to make. Private sector and nonprofit organizations have changed their compensation practices over the last decade, and many employees in those sectors find it difficult to win a "merit" raise.

Still, the federal pay practice tries to follow the averages in the Employment Cost Index, a Labor Department survey that measures wage growth in the labor markets. And averages, as we all know, don't tell the whole story.


Arlington, Va.: For the complaining about NSPS, many federal agencies apparently are located on Lake Woebegone, where everyone's rating is above average. If this person is doing an average job compared to everyone else in the division, then maybe he or she deserves an average raise.

Stephen Barr: Thanks, Arlington. Many NSPS employees are not certain they trust the rating system, and until that clears up, you will hear folks complaining. You gotta have trust for these new systems to work.


Washington: Regarding the direct deposit and social security tax issue: I too am paid through USDA and did not receive the direct deposit on Monday as normal. My agency did not give a reason for the delay, but I am curious as to why it was delayed. However, I don't think that would have any effect the social security taxes because the tax year for feds was pay period 25/06 through 24/07. So whenever we get paid for pay period 25/07, whether the 31st or first, the new tax year began and social security would be taken out again for those who maxed-out previously.

Stephen Barr: Thanks for making that point.


Arlington, Va.: This stuff about "losing" the withheld SS tax is bunk. The official pay date for Pay Period 25 is Thursday, Jan. 3, but those who get electronic deposits always have gotten their pay a few days early, on the Monday of that week. Having this pay period straddle two different tax years is potential a nightmare. Those receiving electronic payments would have had to have accounted for the extra payment in 2007 in calculating their contributions to TSP (to maximize the government match), while those who get the regular check would not have that problem.

Then, in 2008, there are 27 pay periods, so there's one extra pay period anyway, and presumably, one extra pay period where you'll get your check without the SS tax withheld. Besides, I get paid electronically, and I've already adjusted my TSP contributions on the expectation that I would be paid for PP25 in 2008. Don't whine to your boss. As much as I hate enriching AARP-card holders, this is just accounting and not any lost money.

Stephen Barr: And thanks for making that point.


Washington: When the President signs the Defense Appropriations Act, whose payroll funding (raise) is approved -- the military, the civilian employees, or both?

Stephen Barr: The Defense Appropriations Act provides for the military pay raise, but the money cannot be spent until the defense authorization bill clears the White House. The authorization bill has been rejected by the White House, but officials said that a 3 percent raise will go forward, with the .5 percent to be added later, on a retroactive basis.


Falls Church, Va.: When the Military retire they loose their housing/locality pay when figuring their pension. Does the same thing happen to the feds, or are they allowed to keep their locality pay forever in their pensions?

Stephen Barr: No, locality pay disappears upon retirement. It is used in the calculation of the "high three" for annuities, though.


Re: Rockville, Md.: I'm interested in applying to the NSA.: You will be taking a polygraph at NSA.

Stephen Barr: A good reminder for our applicant. Thanks.


Pittsburgh: How much grief has the TSP caught because of the "two transactions per month" limit it recently imposed? I'm not a day-trader type, but I can't see why they don't just charge the big trader/movers a fee per transaction. ... The additional costs were their stated reason for starting the limits; to me it doesn't hold water.

washingtonpost.com: Too-Frequent Traders? (Post, Dec. 20)

Stephen Barr: Frequent traders are unhappy about the pending change and are urging the Employee Thrift Advisory Council to oppose it.

TSP officials say that adding a fee for such transactions would be difficult to administer, and that the fees would likely be fairly large, raising a concern that some regular folks would get unfairly treated along the way. TSP officials also point out that two trades per month is more than enough to keep accounts in balance/diversified, and that the proposal is more liberal than the restrictions used by many mutual funds.


Cog in Washington:4.49 percent? That's pretty sweet. No wonder the powers that be want us under NSPS or some equivalent. Folks on the GS system -- enjoy this while this lasts!

Stephen Barr: It will be interesting to see how those pay tables shake out for the different grades.


Herndon, Va.: Mr. B: As a long-time HR person, now retired but working on contract for my agency, I have one dream that never will come true, but which I'd love to see -- evaluations by one's peers. If you have a performance-based pay system, and you somehow could have 50 percent of the rating based on what the people the individual works with think, we'd have a great system. I know, it never will happen -- but boy, a lot of employees would get a great reality check.

Stephen Barr: Good point, Herndon! The employee attitude surveys suggest that many federal employees think their agencies don't do enough to deal with poor performers. I'm starting to think that some officials believe they can encourage the deadwood to move on if pay raises are reduced or denied year after year. But is this the right way to deal with this problem (if it really is a big problem)?


Cleveland: Regarding the new ruling from EEOC regarding "no discrimination" for reducing and/or eliminating health benefits for retirees over 65, what if any effect, does this have on retired federal employees currently in the system?

Stephen Barr: None. Federal retirement benefits are guaranteed in law, so Congress would have to act to reduce or abolish benefits. That seems unlikely to me.


Re: December 31 pay: My pay normally would have gotten deposited Dec 28, but they said they would hold it until today so that we all are paid in the same year. My check still came in on Dec 31. This is going to be a W-2 nightmare, I think

Stephen Barr: Guess this is why we file those "individual" tax returns. ... Best of luck!


Washington: If the Defense Appropriations Act only covers military payroll funding, then what bill provides payroll funding for DoD civilians?

Stephen Barr: DoD General Schedule civilians are paid through the financial services/general government appropriations bill, which this year got rolled up into the omnibus, or consolidated appropriations bill for Fiscal Year 2008. I don't know why the pay raise is in that bill, except because it is tradition.


Washington: Re: Pay raises -- performance appraisals in the private sector are no less a joke than in the public sector (I've known people in the performance appraisal business). The private sector vociferously has tried to keep down pay increases for rank and file, in contrast to huge salaries for often underperforming executives. Not sure that we should consider the private sector to be a "gold standard".

Stephen Barr: Excellent point. Frankly, comparing pay systems these days is difficult and maybe off-point. The government, after all, performs a lot of work that has no counterpart in the private sector.


Washington: Re: NSPS -- pay Pools are set amounts of money from which those employees belonging to that pay pool are rewarded. If supervisors rate the majority of employees as above average, this will result in more people receiving less of an award because that each "share" awarded is worth less money. In other words, the bonus/raise pay pool funds are spread among the "many people" receiving above-average ratings. I agree that it would be nice if the pay pools were set so that if all of employees are rated at least average (meeting expectations) they continue to keep pace with the GS scale and that those rating above average would get more money. Unfortunately that is not the way the system is set up to operate. No longer does average work mean that one will get a raise/bonus sizable enough to keep up with the current GS scale.

Stephen Barr: As I recall, one of the last big pay reforms, involving managers in the 1980s, fell apart because of inadequate funding and because managers believed they were not keeping up with the GS. Can DoD allow its raises to fall too far behind the GS and still retain capable employees?


Washington: Re: The last comment about peer evaluation, that would scare me to death. Women are a significant minority in this office, and I've heard enough snide remarks (unjustly, since my APRs are fine) about being a working parent. The last thing I would want is some of these bozos whom I never work with (we get assigned to things individually and work with others outside our office) evaluating my performance. I'll take my bosses' opinions any day over that.

Stephen Barr: Thanks for making that point. It is unfortunate to hear that, in 2008.


Re: W-2 nightmare: And my earnings and leave statement says that I received the check in 2008 -- so I assume my W-2 will be incorrect as well.

Stephen Barr: Perhaps not. I'm hopeful these grand payroll computers will keep everything in alignment.


Charlottesville, Va.: That's disappointing that you're pessimistic about a WEP repeal. There's so much money for everything else, and they don't even check to see if combined retirement income is actually a windfall!

Stephen Barr: I hope I'm proved wrong. The WEP and GPO need to be re-examined. As one Senate witness said recently, they invoke "rough justice" and may treat some people too harshly.


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