FMA Legislative Accomplishments

SPRING 2008

As a member of the oldest and largest association representing federal managers, one of the most important benefits you receive is advocacy. FMA strives to bring issues that are important to you and to the enhancement of public service to the forefront of Congress and the Administration. As the 110th Congress moves into its second session, the following are FMA’s recent major accomplishments.

INVESTING IN THE FEDERAL WORKFORCE

FEDS RECEIVE 3.5% PAY RAISE IN 2008, AT PARITY WITH MILITARY

Congress approved a 3.5 percent average annual pay raise for federal civilian employees this past December with the passage of the Consolidated Appropriations Act of 2008 (H.R. 2764). The President signed the measure into law (P.L. 110-161) and issued an Executive Order outlining the distribution of the pay raise to federal employees effective January 1, 2008.

Under President Bush’s Budget for the United States for Fiscal Year 2008, he initially proposed a 3 percent pay raise for both the military and civilian workforce. This marked only the second time in this Administration that the President proposed the same pay increase for the military and civilian personnel. Despite opposition to a 3.5 percent raise for federal employees and members of the Armed Services, the President ultimately heeded to the will of Congress.

The 3.5 percent pay raise will bolster efforts to recruit and retain the best civilian workforce. Given the large number of employees that will soon be eligible for retirement, a larger pay raise will help the government compete with the private sector to secure the best talent. The Federal Managers Association (FMA) has actively sought to establish pay parity, and the congressional action affirms that Congress is in touch with the needs of government employees across the board.

“For years FMA has advocated for pay parity, as civilian employees are often next to their military counterparts in the War in Iraq and throughout the world,” commented FMA National President Darryl Perkinson. “I’d like to thank our friends in Congress who continue to fight this battle with us and ensure that federal employees around the country and the world are properly recognized and valued.”

COMMITTEE APPROVES PREMIUM CONVERSION FOR RETIREES

House Oversight and Government Reform Committee Ranking Member Tom Davis (R-Va.) introduced legislation in February 2007, H.R. 1110, that would allow federal civilian and military retirees to pay their health insurance premiums on a pre-tax basis, in a process known as premium conversion. The bill also provides a tax deduction for military employees who pay TRICARE supplementary premiums. The bill would extend the tax break already available to all active federal employees as well as many private-sector workers.

Recently, the legislation was taken up by the House Oversight and Government Reform Committee, which passed the bill unanimously. Given the nature of the bill, it now awaits approval by the House Armed Services Committee, as well as the House Ways and Means Committee. The legislation has wide-spread, bipartisan support with over 300 cosponsors. Similar bills were introduced in the past several Congresses, all of which received broad bipartisan support.

LEGISLATION ALLOWING RETIREES TO RETURN TO SERVICE INTRODUCED

In a letter to Office of Personnel Management (OPM) Director Linda Springer, the Federal Managers Association (FMA) officially endorsed OPM’s proposal to allow federal retirees to return to federal service part-time while still being able to collect their full retirement annuity. Springer addressed delegates at the Federal Managers Association’s 69th annual National Convention and Management Training Seminar in March 2007 where she detailed the new plan.

In her speech, Springer acknowledged that once retirees leave federal service, they often work for government contractors, which typically costs the government more than if the employee would have continued to work for the government. Under the plan, retirees could work up to 1040 hours in a year, for a maximum of six years without penalty.

The legislative proposal as sent by OPM to Congress would authorize federal agencies to employ retired federal employees on a part-time basis without offset of annuity from salary. Current law prevents retirees from receiving a fully annuity if they come back to work for the government. Under the restriction, the salary they receive is reduced by the amount of their pension. The proposal found interest with Senator Susan Collins (R-Me.) and Congressman Tom Davis (R-Va.), both of whom introduced legislation (S. 2003 and H.R. 3579, respectively) mirroring the OPM plan.

FMA UNVEILS PLAN TO PHASE IN LOCALITY PAY IN ALASKA AND HAWAII

In May 2007, the Office of Personnel Management (OPM) sent a legislative proposal to Capitol Hill which would phase out the cost of living allowance (COLA) and phase in locality pay for residents of Alaska and Hawaii. Currently, federal employees who reside in Alaska and Hawaii receive a tax-free non-foreign area COLA in their pay. However, the federal government fails to credit such non-foreign area cost of living allowances to basic pay for retirement purposes.

The OPM plan phases out the COLA over a seven year period, while gradually phasing in locality pay adjustments. “While I applaud OPM for bringing this issue to the forefront, its proposal is complicated and continues the discriminatory, illogical and possibly unconstitutional denial of full locality pay for federal employees in Alaska and Hawaii. Full locality pay should be immediately provided to the residents of these states,” commented Federal Managers Association (FMA) National President Darryl Perkinson.

As a result, FMA sent a letter to Senator Daniel Akaka (D-Haw.) proposing an alternative to the OPM plan, while still supporting the concept of awarding locality pay to residents of Alaska and Hawaii. Under the FMA plan, a simpler calculation is used to gradually phase in locality pay, while providing a larger adjustment to employees in the first year of implementation. Taking budgetary matters into consideration, the FMA proposal would not cost the federal government any additional money as the same Locality Pay Pool would be spread over a slightly larger population while increasing the amount of federal taxable income for Alaska and Hawaii federal employees.

HEARINGS EXAMINE LEGISLATION TO REPEAL GPO AND WEP

Congressman Howard Berman (D-Cali.) and Senator Dianne Feinstein (D-Cali.) introduced H.R. 82 and S. 206, respectively, which would repeal the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP) for federal, state, and local government retirees.

The Social Security Government Pension Offset prevents government retirees (who were first eligible to retire in December 1982) from collecting both a government annuity based on their own work and Social Security benefits based on their spouse's work record. The GPO adversely affects many women, especially widows, who often lose all of the Social Security protection their husbands had provided for them. Under current law, a Social Security spouse’s benefit is reduced or eliminated if the spouse is eligible for a pension based on a local, state or federal job that was not covered by Social Security.

Under the Windfall Elimination Provision, Social Security benefits are substantially reduced for federal workers who retire after 1985 and are covered under the Civil Service Retirement System (CSRS). All federal employees hired before 1984 are covered by CSRS and they do not receive Social Security benefits unless they also worked in a non-federal job and paid into Social Security (Congress overhauled the federal retirement system in 1986 and now all federal employees hired after 1984 are covered by Social Security).

FEDERAL WORKFORCE MANAGEMENT

COMMITTEE APPROVES MANAGERIAL TRAINING LEGISLATION

Senators Daniel Akaka (D-Haw.) and George Voinovich (R-Ohio) reintroduced legislation that would require mandatory initial and ongoing supervisory training for all federal managers.

The Federal Supervisor Training Act of 2007 (S. 967), introduced by Senator Akaka, requires agencies to provide interactive instructor-based training on management topics ranging from mentorship and career development to hostile work environments and poor performers. After the initial supervisory training within one year of promotion, supervisors would be required to receive ongoing training once every three years thereafter. In addition, the measure includes an accountability provision to establish competency standards to ensure the training and its intent is effective. The legislation was approved by the Senate Homeland Security and Governmental Affairs Committee in June 2007 and awaits consideration in the full Senate.

In his floor speech introducing the bill, Senator Akaka said, “While the federal government encourages management and supervisory training, the development and implementation of training programs is left to the discretion of individual agencies.  This leads to inconsistent guidance on training and sometimes inadequate training due to an agency's other priorities and limited resources.  Meaningful training matters.  Training should not be discretionary for agencies.”

“As the attrition rate in the federal government continues to rise, management ranks will need replenishing and the new crop of managers needs better training to deal with the challenges of a modern workforce,” FMA National President Darryl Perkinson commented. “Senator Akaka’s bill would foster an environment in federal agencies that see training as a benefit to the agency and not a budget item that can be easily stripped.”

ADVOCACY BEFORE CONGRESS*

SSA SEES INCREASE IN PRESIDENT'S FISCAL YEAR 2009 BUDGET

In his Budget of the United States Government, Fiscal Year 2009, the President proposed $10.327 billion for the Social Security Administration’s Limitation on Administrative Expenses. While this is a $580 million increase from what Congress appropriated for FY08, and far greater than the President’s previous budget requests, it still falls short and prevents the agency from tackling its backlog challenges. SSA Commissioner Michael Astrue has requested $10.427 billion for SSA administrative expenses in an effort to reduce the hearing backlog by 70,000 cases in fiscal year 2009.

Towards the end of 2007, FMA was one of nearly 50 organizations which asked the Office of Management and Budget (OMB) to allocate $11 billion for SSA administrative expenses in FY09. “With the recent filing for Social Security benefits by the first baby boomer, SSA will be facing its most daunting challenge ever – the number of workers receiving Social Security retirement benefits will increase by 13 million over the next 10 years,” the letter stated as the basis for the increase in funding.

Currently in the Office of Disability Adjudication and Review, there exists a backlog of over 750,000 requests for a hearing, an increase of over 300,000 since 2000. Processing times for disability hearings have grown by 200 days during the same period. SSA has lost 4,000 positions in just the past two years. The primary reason for the current state of SSA is insufficient staffing to handle the increase in cases.

TERM LIMITS SEE EXTENSION IN SENATE FARM BILL

In February, Federal Managers Association National President Darryl Perkinson sent a letter to the House Agriculture Committee asking its Members to support term limit provisions in the Senate version of the 2007 Farm Bill (S. 2302).

Under the current system, a customer who is unable of obtain credit from commercial sources can only receive loans from the USDA Farm Service Agency (FSA) for seven to ten years, at which point the farmer must go to a private lender or face the alternative of being unable to sustain his operations. Approximately 2,500 borrowers reached their term loan limit in 2007 and another 8,000 will expire in 2008. As Perkinson said in the letter, “It is vital that you take immediate action to help these farmers sustain their operations. Term limits do not have any caveats or exclusions for natural disasters, falling prices or random occurrences that negatively impact production capacity. Term limits are hard and fast dates that set forth a mandate and are unsuitable for a need-based federal farm loan program. The reality is many needy farmers and ranchers are unable to apply for loans because of these arbitrary term limits.”

Direct loan term limits have been extended by one year under S. 2302. Often times, new farmers and those farmers experiencing natural disasters need more than the seven to ten years to become established and financially. Guaranteed term limits have been suspended twice, once with the 2002 Farm Bill and then again in December 2006. The guaranteed term limit rules were eliminated in the Senate bill, allowing FSA employees to save viable farm operations and provide stability to America’s rural economies.

FMA SUBMITS COMMENTS ON PROPOSED CHANGES AT IRS

The Internal Revenue Service (IRS) Conference of the Federal Managers Association submitted public comments for the record in regards to changes to the IRS performance system. In April 2007, the Office of Personnel Management (OPM) proposed regulations to revise the criteria for IRS broadbanding systems in the Federal Register.

Currently, the 8,800 managers within IRS receive at least the same base pay and locality pay increases that General Schedule employees receive each year. Under the proposed regulations, IRS managers will no longer receive the automatic pay increase and could potentially take a pay cut if they do not meet performance expectations.

FMA said in the comments, “The General Schedule increase is the cornerstone of current federal compensation policy and should not be included as part of performance based increases. The purpose of the yearly increase is to keep government salaries competitive with the private sector in hopes of closing the growing pay gap between the two… Under the regulations OPM is proposing, IRS leadership would decide how much of an increase to distribute to managers – as an across-the-board increase and/or locality adjustment – and no one is guaranteed a pay increase regardless of performance. We believe including the General Schedule increase in the pool of money available for performance-based increases would be out of line with pay setting practices of other federal employees.”

FMA went on to suggest that IRS remove the arbitrary caps on the number of high ratings managers can receive. Currently, IRS is allowed to give a percentage of their managers an “outstanding” rating and an “exceeded expectations” rating regardless of the actual performance of the managers in the pool. So even if all managers in the pool have exceeded their performance standards by a large measure, only a set percentage can receive the highest rewards. As a result, some managers receive a rating less than their performance. FMA said in its comments, “This negates the inherent principle behind a pay for performance system. We ask that OPM and IRS consider adding this change when any new regulations are proposed.”

*To view copies of FMA testimony or public comments, please visit us online at www.fedmanagers.org.