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Federal Diary
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Federal Diary Live
With Stephen Barr
Washington Post Staff Writer

Wednesday, May 28, 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. The big topics around Washington remain much the same as in recent weeks: a Pentagon proposal to overhaul the pay and personnel rules for its civil service employees, a "performance fund" to reward the government's best workers, the herky-jerky introduction of flexible spending accounts for federal employees, and a forthcoming Office of Management and Budget circular that will change some parts of the process used to determine when federal work should be turned over to the private sector. But enough of this--on to the questions and comments. Again, thanks for taking the time to join us today.

Cubeville, Md.: My understanding is that OPM has put flexible spending accounts for health care and child care on hold pending review of alternate options/legislation for paying for expenses vs. charging employees a fee. Do you know how long this is expected to take? Can we still expect to see these in July? this year? Thanks for your column!

washingtonpost.com: Estimates Vary on How Many Will Open Flexible Spending Accounts (Post, May 28)

Stephen Barr: And thanks for your kind words! Honestly, I don't know where OPM is going on FSAs. You are correct; enrollments have been suspended until OPM figures out how the program will be financed. OPM had planned to charge each employee a participation fee, but that is now under study after a union president objected. A provision to require agencies to pay the program costs has been attached to the fiscal 2004 defense authorization bill, but Congress usually doesn't finish work on the bill until late summer. So I'm not sure it will influence OPM's announced start date of July 1. One of the problems involves the structure of the health-care FSA. An employee can sign up to make payroll deductions, which are spread over several weeks, but can submit claims that exceed the amount deposited in the account. The contractor clearly doesn't want to absorb early expenses and I suspect OPM is looking for a way to provide up-front financing. The whole issue has become very convoluted, so we'll just have to wait and see what unfolds.

Washington, D.C.: Hi Steve,

My question is about the new Flexible Spending Accounts. It says "eligible expenses" can be paid out of the account, but I can't find anywhere what those will include. It will make a big difference how much I allocate to this account. Can you help steer us to a list of eligible expenses?

Thanks; love your columns.

Stephen Barr: Great question. OPM has not done a good job of educating employees on what expenses will be covered and what wording will need to appear on bills and receipts that are turned in for reimbursement. There is some information under FAQs on www.fsafeds.com, but hopefully more specific information will be forthcoming sooner rather than later from OPM.

I'm no expert on tax issues, but, in general, health-care FSAs cover expenses that are tax deductible, related to the diagnosis and treatment of a medical condition or prevention of disease, help alleviate a physical or mental defect, and are not reimbursed by FEHBP.

In general, FSAs could be used to pay lasik treatment for eyes, many dental procedures not covered by FEHBP, the purchase of eye glasses or contacts, co-payments for prescription drugs, deductibles for fee-for-service health insurance, co-pays for HMO visits, etc.

Most people use the dependent care FSA to pay child care expenses for kids age 13 and younger. But the accounts also can be used to pay for care of persons you claim as dependents on your federal income tax form--which opens the door to some forms of elder care.

I think your best bet is to call the contractor, SHPS Inc., with your specific questions. The company can be reached at 1-877-372-3337.

FSAs: Call me a cynic, but we probably won't see FSAs this year. The government, and especially OPM, cannot organize itself and will fret until FY2004.

Stephen Barr: Well, it is clear that some agencies won't be offering FSAs by July because they cannot reprogram their payroll computers. Defense, for one, plans to start the program Sept. 1. It's clearly not one of OPM's best program launches.

Alexandria, Va.: Do you know if the federal government has any plans to offer more information or training re: flexible spending accounts? For this half year period, is the limit still $3,000 for the health account? Any news on who will pay the administrative fees?

Stephen Barr: I think my above responses covered most of your query. OPM officials tell me they plan a more thorough education campaign next year. Yes, for this half year, assuming your agency can handle the payroll processing, the maximum allotment is $3,000 for health care and the minimum is $250.

Falls Church, Va.: I have a question about the FSA program I haven't seen addressed elsewhere. My wife's a Federal employee, but I am in the private sector and already have an FSA set up with my employer. As a couple can we have two FSAs totaling $10,000? That is should we bother setting one up for her? With two kids in daycare we definitely spend more in a year.


Stephen Barr: No, the dependent care FSA is limited to $5,000 per family. However, you could have two separate health-care FSAs; both of you could invest up to the maximum allowed by your employer, which would be $3,000 for the federal FSA and whatever your limit is at your company. The dependent care rules are set up by the IRS.

DoD Personnel Reform Proposal: Steve, I have been trying to follow closely the debate on the Department of Defense personnel reforms that Mr. Rumsfeld wants. I thought that the proposal had been attached to the National Defense Authorization Act in both chambers of Congress. Now I'm hearing that it may have been stripped out and folded into separate legislation. What is the current status on this package and what is the likely timetable for enactment and implementation? Thanks!

Stephen Barr: What we've got here is a two-step dance. The House wrapped in the civil service reforms in the fy 2004 defense authorization bill. The Senate bill came to the floor without any personnel reform provision, and the parliamentarian blocked an attempt to include an amendment. That means that Sen. Susan Collins will likely introduce a separate Senate bill on DOD civilians and try to get the Senate on record. The outcome won't be known until House and Senate negotiators come up with a compromise version. That could take us to Labor Day.

Monterey, Calif.: Stephen, I read your column every day -- it is great. My question: will BRAC 2005 and the Defense civilian personnel reform combine in nasty ways? Thanks, Dave

Stephen Barr: Thanks for being a reader! This BRAC stuff will likely get nasty. The House defense bill would put half of the bases on the sidelines and out of any BRAC process; it would also direct the Pentagon to keep troop strength at 1991 levels, higher than today.

It's clear that Secretary Rumsfeld wants to shake up DoD in the coming year. Getting civil service reforms through would help them move people around, they claim. Meanwhile, you have a separate effort underway to sort out "core" and "non-core" jobs, which may increase contracting out of civil service positions. Just call me confused....

Washington, D.C.: How could the performance fund be applied at an agency that just has pass/fail ratings?

Stephen Barr: Don't think it can be. I hear some agencies are complaining to OPM about having to come up with a new performance management system.

Washington, D.C.: I, for one, am thrilled with the idea of pay-for-performance for federal employees (and I am one). I would even go so far as to eliminate pay bands entirely, so that ascension to the top ranks of government is limited only by ability and desire. The current method of "competing" for promotions thru the KSA/application process is ridiculous, outdated, and not practiced ANYWHERE in the private sector. If employees do their jobs, and do them well, what is there to be afraid of? The current system protects the incompetent and lazy and punishes the motivated and exceptional. The pay-for-performance plan would encourage star players in the private sector to try out the government as an employer. Why wouldn't we want to do this?

washingtonpost.com: House Backs Measure to Boost Pay of Government's 'Best and Brightest' (Post, May 27)

Stephen Barr: Good points. The rub is trust. Many, many federal employees do not trust their managers to make fair decisions on pay raises and performance ratings. Because agencies operate with limited funds for salaries, at some point, you will see some employees going without a raise or receiving a smaller raise than they would have under the GS system. Over the long haul, I think such a system could be made to work. But the transition could be ugly in some places, especially if budgets are tight and managers do not receive adequate training.

Arlington, Va.: Steve,

What do you think the chances are that the Pentagon's civil service reform plans will be passed without modifications to retain some employee protections? If this passes in any form, do you envision other departments and agencies following suit anytime soon?

Stephen Barr: Reps. Tom Davis and Jo Ann Davis, both of Virginia, scaled back some parts of the Rumsfeld request and inserted a GAO idea to make Defense consult and provide feedback to employees on a new performance management system. As of today, I would bet the only meaningful change in employee protections involves appeals. The Pentagon wants to shorten the process and make it easier to show the door to the "bad actors," so to speak.

Yes, other agencies will follow if Defense gets the leeway it seeks. In particular, some agencies want to set up systems so they can pay more to certain workers without having to promote them into other, higher-graded jobs.

Arlington, Va.: With a major emphasis on privatization (i.e., contracting out) of Federal jobs, what, if any, hiring restrictions are being placed on Federal agencies to ensure that Federal employees whose jobs are contracted out can continue their Federal careers? (i.e., is there a requirement that the Federal agency that the employee works for must place that employee into an existing or future vacancy?) I understand that there are provisions that a contractor that wins the bid for the privatization of a Federal job must offer that job first to the Federal employee whose adversely impacted by the privatization. But, this means that the Federal employee's Federal career will end, along with his/her retirement and other benefits. What, if anything, is in place or being considered to ensure that those Federal employees being adversely affected by privatization are retained in Federal service, if at all possible, by placing them in other positions (and re-training them if necessary)that become vacant within the Federal government?

Stephen Barr: For the most part, as you indicate, agencies ask the winning bidder to give the displaced employees a chance to shift over to the contract operation. That does put retirement and other benefits in jeopardy. Some departments, such as HHS, have pledged that no employee will lose a job, but not many agencies run active programs to help folks find new work elsewhere in the government. From my vantage point, this seems like one area where the employee has to scramble and figure out what is best for his or her situation.

Washington, D.C.: Shortening the appeals process is a good idea. There's a woman at my agency (AG) who has not been at work for years. She has an office -- that we are not allowed to assign to new employees. Has been going on for 6 years.

Stephen Barr: You do have to wonder why management looks the other way....

Vienna, Va.: Interesting point the earlier caller made about the pass-fail system and agencies asking for OPM approval for a new rating system. The OBVIOUS solution is for agencies to just implement whatever new system they want without waiting for OPM approval. Even if OPM does not approve it, there would be absolutely nothing they could do if all of a sudden new forms were used across the Government. That would be it, period.

Stephen Barr: Perhaps. But agencies wanting to take advantage of any new funding would likely have to meet some OPM standard, I would think.

Washington, D.C.: I received the following notice in response to applying for a federal job: "You have been determined highly qualified for the position at the GS 12 level and have been referred to the selecting official for consideration." Generally, how long before I should expect to hear something?

Stephen Barr: Based on what my readers tell me, anywhere from days to months. Here's where the virtues of patience and persistence come into play.

Washington, D.C.: How can the president's management agenda be made "real" for employees who are not in Washington?

Stephen Barr: I don't know. President Bush needs capable political appointees who are willing to work on his agenda rather than just talk about it. There's a natural tension between field offices and HQ bosses in any season, so I would wager we'll have an uneven application of the president's agenda across the country.

Silver Spring, Md.: What about A-76?

Stephen Barr: OMB plans to announce a revised version tomorrow that will streamline and hopefully make more clear how agencies determine which "commercial jobs" should no longer be performed in-house and should be turned over to the private sector. In theory, this should help the administration in its efforts to run more competitive sourcing competitions.

Rockville, Md.: What's happening with the new Department of Homeland Security? Have all the executives been put in place and have they begun blending their policies, plans, technologies, and people? Has consolidation of their administrative offices been completed? How much money are we saving because of these consolidations?

What about the cuts we've been hearing for 2004? Any idea what their budget will look like in comparison to 2003?

Stephen Barr: The department is a work in progress. Most of the top executives are in place, but people, technology and policy changes are still being worked on in many areas. I don't think we'll know where the department stands in many areas until fiscal 2005. Budget comparisons also are difficult, in part because DHS agencies received extra post-Sept. 11 anti-terrorism funding in recent months and because the realignment is not yet finished.

RE: Federal Job Referral: Just because you are referred to the selecting officials, does NOT mean you will be called to interview. Please realize that.
I get "referred" all the time and then the next letter is that I was not selected (and never interviewed). This is life in the federal job system!
I recently was interviewed and was told there were 250 applicants, 40 referred and I was one of THREE interviewed. So, consider those odds.

Stephen Barr: Thanks for the reality check!

Greensboro, N.C.: Hi Steve,

What do you think of the chances, if any, that WEP and GPO parts of Social Security may change in the near future?

Stephen Barr: Not looking good. Any changes will likely have to be made as part of Social Security reform--and that overhaul is on hold because of politics and the uncertain stock market.

Washington, D.C.: Thanks for this informative, enjoyable and addictive weekly discussion group! What have you heard about telecommuting? How serious is OPM about this; any directives, incentives anything the little fish can take upstream to make it easy for the big fish to make it real.

Stephen Barr: Glad that you find this useful; it's the readers who make this zing along, that's for sure.

OPM recently published a new telecommuting guide. But OPM is in the midst of a reorganization and staff changes, so I fear that telecommuting has slipped as a priority. OPM and GSA have done fine work in this area, but agency managers are the only ones that can make it happen, and they seem reluctant to take this one on.

Alas, we've run out of time. A special thanks to all of you who sent in questions, even if I didn't pluck them out of the electronic basket for a response. And thanks to all of you who take the time to read this transcript. Please join me again here at noon next Wednesday.

© Copyright 2003 The Washington Post Company