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Federal Diary Live
With Stephen Barr
Washington Post Staff Writer

Wednesday, April 30, 2003; Noon ET

The Post's Stephen Barr is the author of The Federal Diary, which runs Sunday through Friday in the Metro section. Steve has been a reporter and editor at The Post since 1979, including stints as Federal Page editor, congressional editor and a staff writer covering the federal bureaucracy. He takes the column live to answer your questions Wednesdays at noon ET.

The transcript follows.

Editor's Note: Washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.

Stephen Barr: Thanks to all of you joining us today. I want to take this opportunity to call attention to Public Service Recognition Week, which kicks off this Friday with more than 100 exhibitions from federal agencies on the Mall here in D.C. The Expo on the Mall is sponsored by the Public Employees Roundtable and the Defense Department. Among the activities are a U.S. Navy dive demonstration in tank, the chance to talk to an astronaut and an Air Force weather booth that will feature forecasts for Iraq. The show kicks off at 11 a.m. Friday and runs through 3 p.m. Monday. Drop by and see how the government touches the lives of every American in important ways. Now, on to the questions.

Arlington, Va.: I think SECDEF may find DOD civilian employees a little tougher foe than Saddam and Republican Guards on the pay reform issue. I would rather have the status quo than the new system I don't trust my director to implement the system fairly. I see the judges and lawyer scum benefiting at the expense of the other professional series in our office. Just leave it alone, Don.

Stephen Barr: Trust is a big issue for the Defense Department to overcome. For those of you who need a little context, the Pentagon has proposed a far-reaching overhaul of pay and personnel rules for Defense civil service employees. The centerpiece calls for junking the 15-grade General Schedule and moving to a pay-for-performance system. The Pentagon contends that it has run demonstration projects over 20 years, learned how to operate pay and performance management systems, and is ready to scale up to the entire Defense civilian workforce. Clearly, a big -- and controversial -- deal. But there are numerous skeptics, including the General Accounting Office, that think the Pentagon should move more slowly and take time to develop safeguards that employees could study and accept. Trust is the issue, and it will be telling to see how Congress handles the Pentagon request in the next two weeks.

Washington, D.C.: Do you think all federal agencies will eventually get student loan repayment benefits? Why aren't agencies working with their employees to try to secure funding for this benefit?

Stephen Barr: I wish I knew. I think offering to repay student education debt is a great way to attract young people into the federal service and would make the government much more competitive in the labor market. But some agencies have been timid about asking Congress to finance such a program, and others are afraid of having to choose among employees who want this benefit. Frankly, since many companies are not hiring right now in this uncertain economy, agencies are not having trouble filling jobs. In their view, why offer a perk if you have plenty of applicants. I worry that government is not getting the best applicants.

TSP question: Hope you or others in the forum can help. The bureaucracy is mind-boggling here, I can't get a straight answer, and the TSP Web site has a lot to be desired.

I will complete one year of service come August 1st. I have been putting in 5 percent of my NET basic pay into the TSP fund. I know that the agency will match 1 percent then after a certain period of vesting, will add another 4 percent. My question is, how long is this vesting period? Also, is this 1 percent being matched now? If so, why isn't this reflected in my pay stub? Is it reflected in my TSP account info online? I can't seem to find it. TSP says that I have to match 5 percent after the vesting period in order to get the agency's 4 percent match, but they only say 5 percent of "Basic Pay"; do they mean "GROSS Basic Pay" or "Net Basic Pay?"

Thanks Stephen, you have always been most helpful with the journalistic service you provide.

Stephen Barr: Thanks for your kinds word; we can help to some extent. The 1 percent contribution is automatic and applies even if you never put in any money yourself. It goes straight into the TSP account, so you won't see it on your pay stub. Matching contributions begin during the second open season after your hiring date, which means the delay can be up to almost a year. You are vested in the matching contributions after three years. The percentage of salary contribution is from your gross pay before any deductions for health insurance or other purposes. Generally speaking, you're right. It is hard to navigate the TSP website and find a simple explanation of the rules. Hopefully, this will get better in mid-summer when TSP goes to a new record-keeping system that will show accounts in price per shares.

Baltimore, Md.: Hello Stephen,

I found inappropriate your guest's suggestion last week that, for the time being, Feds should vacate the TSP's F fund in favor of the G fund.

The F fund is clearly more volatile than the G fund, but offers the possibility -- indeed the likelihood -- of higher returns over the long haul. Much of the value of the F fund is determined by interest income earned on the underlying securities. For this reason, the F fund is far less volatile than the C, S, or I funds.

I am in my late thirties with at least 25 years until retirement. I have 60 percent in the C fund, 20 percent in the F fund, 10 percent in the G fund, and 10 percent in the S fund. As I come closer to retirement age, I will make the balance more conservative.

Rather than trying to time the market, many (if not most) financial experts believe that it is much more sound to come up with an asset allocation that is appropriate for one's age and risk tolerance, and then to keep making those contributions regardless of what the market is doing.

Thank you for letting me share my opinion.

Stephen Barr: I'm no financial adviser. But I think last week's guest was trying to make the point that TSP participants have a unique edge not available elsewhere: the G Fund. It never loses money and it returns interest equal to a 14-year bond without bearing the risk of a long-term investment in bonds (that is, the risk is that interest rates will go up and the bond will lose some of its principal value). You can get in and out of the G Fund at any time and not suffer that risk. If you look at the statistics on TSP quarterly contributions over the last 10 years, most employees favor the G Fund over the F Fund. Only since 2001, the start of the bear market, have you see federal employees putting more money into the F Fund. The F Fund has done well in the last few years because interest rates have been declining, but once they start going up, those rates will suffer. The G Fund, on the other hand, will offer higher returns when interest rates go up. In general, though, I don't really disagree with your viewpoint. The trick is to diversify and the TSP does offer a way to do that. Best of luck!

Springfield, Va.: RE: "I worry that government is not getting the best applicants." I'm certain that the federal government's hiring process plays a huge role in that. Four months and about 50 submissions later, I have not heard a word from any of the agencies to which I applied.

Stephen Barr: You're right. The government's hiring process is its worst enemy these days. OPM's deputy director, Dan Blair, is supposed to be looking for ways to fix it. Let's hope he succeeds. I've heard this lament countless times. Best of luck with your job search!

Alexandria, Va.: I agree that the biggest problem the Department of Defense has with the new pay system is trust. We have not forgotten that Bush froze the locality pay raise this January on the basis that the war on terrorism was taking the money away. Without the guaranteed step increases, I'm afraid that the Department of Defense will never give employees raises in the future -- there will always be something else that they say needs the money more than pay raises. Bush and Rumsfeld shot themselves in the foot on this one with their freeze on locality pay. Combined with the severe reductions in personnel, we all know who will pay if they get this new system in place.

Plus, the ability to move from the Department of Defense to other government agencies will be more difficult if the Department of Defense is using a different GS rating and pay system than the rest of the government.

Stephen Barr: All good points. I had not considered the possibility that competing priorities could drain away money set aside for pay raises. That does happen in some companies during bad years--raises are small or bonuses get postponed. On the other hand, if you trust Rumsfeld, Chu et al, you could envision a situation where Defense provides higher salaries in a number of occupations and pulls in people from other agencies. One proposed provision would let retirees collect a full paycheck and a full pension. Some officials worry that would lead to an uneven playing field, with experienced hands trying to get in the Defense door so that would be set for a more handsome retirement outlook. The big unknown in all this, of course, is how strong a hand Congress will take in sorting out this proposal and putting in some safeguards.

Washington, D.C.: I think something different should be done to attract and retain workers in this job market given the housing cost. If something is not done within 5-10 years (when retirements happen) you will have everyone who works for the federal government living 30+ miles away and having an insane commute, which will only drive any new hires away. Your thoughts?

Stephen Barr: Housing costs in the D.C. area, San Francisco and other big cities seem a clear threat to federal recruitment, given the starting salaries at many agencies. I hear regularly from young tech workers who say they can't afford to work for the government and live in the Washington region. Many tell me they are quitting and moving away. I'm not sure what the solution should be. But you make a good argument to step up the government's commitment to telecommuting.

Washington, D.C.: I don't see how the move to pay banding helps. At my former agency more than 80 percent of employees (of 600+ employees) got above the average rating, so most get part of the annual award pie. I've also seen awards given to folks that had minimal input into the project, just so they won't feel left out. And the "sympathy" award given to a low level person so that they'd have money for Christmas presents for their children. Or the award given to someone because it's "their" turn. It'll be the same managers making similar, poor decisions.

I think that a better solution is to keep the current system (I like the consistency of known pay changes). Make big awards (greater than $500) go through an agency or department panel, including outside participants. And let managers do spot awards for under $500. Have part of the managerial assessment based on how they "manage" their awards, training, and employees.

And make the firing process easier and permanent. I know of one case where the person was embezzling-- she agreed to resign, then she was hired by another agency!

One of the minority who think we Feds are paid just fine.

Stephen Barr: A great real-world description of the workplace. You're not alone in thinking that managers will have difficulty in administering a pay-for-performance system. I suspect many managers will take the easy way out and cluster employees at a certain rating level, so that no one gets left out of a pay raise. DOD plans to use review boards to police the system, but DOD is so vast, I've no sense as to whether that can work on a large scale.

Washington, D.C.: Does the coming locality pay Back-pay "adjustment" include the SES or no?

Stephen Barr: Yes. Don't give up hope.

Arlington, Va.: I hate to say it but I don't trust Defense Secretary Rumsfeld. No reason to. He hasn't demonstrated I can trust him.
Hey Don, how's about an all hands meeting that is open to questions from the floor. And, yes I will tell you to your face I don't trust you or your assistants or my bosses to manage the new pay system fairly.

A Department of Defense adjudicator

Stephen Barr: You may get a chance to talk to him. Rumsfeld has held town meetings and taken questions on transformation reform. In fact, as I recall, the DefSec provided a roadmap to all of this several months ago. The surprise, so to speak, is that the Pentagon sent up a 205-page plan to Congress during the spring break recess, and only a few weeks before the Armed Services committees mark up their annual DoD legislation.

Alexandria, Va.: Do you think the proposed Pentagon employment/employee changes will get through the coming Authorization bill this May?

Stephen Barr: I don't know. Rep. Tom Davis has rolled the DOD changes, and changes for NASA and the SEC, into one bill--H.R. 1863. He plans a hearing tomorrow and a markup next week. That's the House Government Reform Committee. Meanwhile, the House Armed Services Committee will have to decide whether to go along with Davis or stick to exactly what the Pentagon wants. Then we have the Senate, where John Warner and Susan Collins will by the primary players. I'm assuming that since Congress gave some major flexibilities to the Department of Homeland Security, it will feel obliged to give Rumsfeld some of what he wants.

FedVille: I'm confused Stephen -- why would anyone worry about recruiting for the government workforce -- aren't they aware that Congress has already established a backdoor plan to contract out all the work feds are doing now (A76cir)? There's no point in recruiting people to work for the government if you'll just have to RIF them later. Gee, maybe I've stumbled across another hidden barrier to public employment.

Stephen Barr: Love your humor. One of the interesting things about the Defense proposal--Undersecretary Chu suggested that with such changes that some jobs might not be shifted to contractors. The proposal, he said, will make it easier for Defense to shift about 320,000 civil service types into jobs now held by military personnel. At the same time, though, Defense is running this "core" vs "non-core" exercise, which seems to guarantee that a number of jobs will disappear from the civil service roll.

Somewhere, USA: Any new news on the (un)FAIR Act? I just completed my four page appeal letter, pointless though it may be.

I dutifully wrote my challenge letter, which was judged by… a Bush political appointee who's stated goal is to "carry out the President's objective to make government more effective and efficient" (as if the mere prospect of outsourcing will make that happen). After getting the anticipated denial of the challenge, I just dutifully finished my four page appeal letter quoting chapter and verse from the (un)FAIR Act and A-76 Circular. It goes to, you guessed it, another Bush political appointee who's stated goal is to outsource 20 percent of DOT's positions. And that is the final "court of appeal" assuming I and others don't take DOT to court over the issue. Where in all of this is any sense of a fairness? Other than Senators Mikulsky and Kennedy, I've heard nothing from Congress (not that anything will get done with the Republicans in charge and all the Beltway Bandits straining at the bit to belly up to the Federal trough). A rumor circulated last month that OMB was now rethinking things given the threat that 1/3 of us will leave in three years and they have no hope on the planet of contracting out even that many jobs.

Stephen Barr: Ah, what a mess. Some agencies are waiting for OMB to produce its A-76 rewrite. When it happens, I think you will see a speed up in job competitions, not a decrease. Regardless, this has been a morale buster at many places.

Washington, D.C.: The pay system needs to be revamped. But maybe create a third option where everybody gets the annual pay increases, but then there is flexibility for the supervisor to promote people by steps for doing good work or instead of hiring someone at say GS 9 level 1 they can bring them in at GS 9 step 7.

In my organization it is very flat. There is one supervisor and three project managers doing similar tasks. But, each project manager is at a different level. This is something that needs to be repaired -- getting the same pay for doing the same job.

Stephen Barr: Interesting observation. So-called pay banding would provide the flexibility you suggest, it seems to me. The question is whether pay for performance should be a part of it. Take out the performance stuff, and I suspect many employees would support pay bands. Defense officials argue that under the current system that many employees are reluctant to take promotions because the job has to be reclassified and recompeted and the employees fear they might lose the competition. So under pay banding you could get a promotion, or a raise, without having to go through that whole process.

Washington, D.C.: Hi Stephen,

I have been a federal employee for 23 years. I have had several jobs and performed well in all of them (or at least I was told so). I never felt I could work up to my real potential though. I was always confined to the parameters as defined by my supervisor or organization. I know without a doubt that I had a lot more to offer had the system allowed it. The question I guess for all federal employee is, under the new pay for performance system will they get to perform at their real potential and get paid based on their performance or will they still have their performance restricted by the system. I think DOD needs to build the system first then very gradually move employees into it.

Stephen Barr: You describe the goal. Defense officials would argue that the problems you are experiencing are largely caused by the GS system. And you are right to recommend a gradual phase-in; trust must be earned for this to work.

Another take on student loan repayment: One reason some agencies aren't doing it is because it might cause tremendous morale problems among current employees. Think about it. This would be a special perk given to those who have student loans. What about folks you hire who don't have student loans? What about current employees who just finished paying off their student loans? Good idea, but will be difficult to actually do without causing further problems.

Stephen Barr: All good points. In theory, student loan repayments would be just one of several methods of recruiting and retaining employees. The rub, of course, is that other perks are not funded or used, so some agencies are skeptical of going down this road. Despite the valid issues you raise, it seems this is one card the government should play if it believes recruitment in some occupations is going to be difficult in coming years as Baby Boomers retire.

Arlington, Va.: Mr. Barr, thanks for being our window on the federal system. I'm in the DoD, and in a pay-banded position right now. There are some pros and cons to it, but my major concern is that raises are based on relative rankings of employees within a pay-pool. All pay-pools are treated equally, but they are not. I wish I were lucky enough to be a stellar performer among lesser mortals so I could get a bigger slice of the pay pool's allotted salary funds. Unfortunately for me, we are all hard working folks sharing the wealth evenly. That's the objective right? What do you think Rummie would say if I dared to equate that to a very socialistic approach? All working really hard, all getting an even share, and nobody getting very far ahead.

Stephen Barr: Thanks so much for sharing your experience--good to hear from a person in a pay pool. To me, the big issue is funding. Seems to do these right, DoD has to put a lot of money on the table. If I read you correctly, the difference between their plan and what you are under is that they are taking not only the money from within-grade raises but from the basic annual raise and putting it in the pot. That might be enough money to make a difference, but is also means that some employees risk getting nothing. Anyway, would be great to hear from others of you who have first-hand experience with pay bands, etc.

Virginia: I just need to gripe. My husband was JUST promoted to a GS 11, even though he supervises a GS 14 (someone who transferred in, but has no knowledge of his new job). This guy actually sleeps at his desk half the time, but he makes literally twice my husband's salary. My husband has to work late to finish this guy's work, because he is too incompetent to complete it himself. It this fair? Why is there nothing that can be done about this?

Stephen Barr: This sounds very strange! Sounds like your husband ought to ask his boss to spend some time in the office. Nothing like a little oversight.

Virginia: Please help me to understand this -- I don't understand why contracting work out is going to save the taxpayers money. Every person I know who is a contractor makes significantly more (upwards of 20 percent) than their federal counterparts. Where do the savings come from?

Stephen Barr: A darn good question. Does the contractor get the same level of benefits as the federal employee? Is the contractor using fewer people to do the job? Has the job changed since the contract was awarded? These questions show how difficult it is to decide whether money is being saved.

Fedville II: Isn't the phrase "job competition" simply a Republican euphemism for "contracting out?" I've not seen any real "competition" to date allowing current fed employees to compete with contractor bids. What happens is that SESs tasked with outsourcing come up with some cost comparison that they alone create. They then compare that to bids and even when no cost savings are evident, they still outsource. There is no "job competition" here.

Stephen Barr: For the most part, yes. But some agencies are hiring consultants to help employees set up units to bid to keep the work in-house. OMB claims that it does not care who wins and that history shows federal employees win about half of the competitions. Contractors also argue that the system is unfair to them. There are not easy generalizations.

Arlington, Va.: I view performance agreements and ratings as a contract between an employee and the supervisor. Unfortunately, the higher levels decide that "there are too many outstandings" and push the ratings down and the number of grievances way up. I knew one SES manager who said that Fully Successful was a great rating since, after all, it was 'Fully." Of course, when he got the FS rating, such whining you've never seen. Basically, the system doesn't seem fair and new tries at reform (remember merit pay?) are doomed because nobody knows how to administer a fair system.

Stephen Barr: Well said--the argument in a nut shell.

Newport, R.I.: Stephen,

Have you heard whether the government made the $178M+ payment (due yesterday) as required by the final order in the special rate case?

Stephen Barr: Yes, it did, according to the National Treasury Employees Union. Packages are in the mail explaining the back pay awards and how they were calculated.

Alas, we've run out of time today. Thanks to all of you who sent in questions. Would really appreciate more insights into pay-for-performance, pay banding, pay pools and other such systems. Send me an e-mail at BARRS@washpost.com or post your comments at our next discussion forum. See you here at noon next Wednesday.

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