OPM, Republicans continue battle over federal pay

By Jason Miller
Executive Editor
Federal News Radio

The debate about whether federal workers are overpaid moved to Capitol Hill Wednesday, and the truth became no clearer.

Republicans and Democrats continued to hammer away at each other’s hypotheses before the House Oversight and Government Reform Subcommittee on the Federal Workforce, U.S. Postal Service and Labor Policy hearing.

Rep. Jason Chaffetz (R-Utah) came out swinging asking Office of Personnel Management Director John Berry why 63 percent of all federal employees received bonuses at a time when the average citizen is losing their job or facing potential cuts.

Rep. Stephen Lynch (D-Mass.) countered the majority claims that the federal workforce grew by 157,000 employees over the last three years by saying agencies lost more than 616,000 employees during the same time frame. Lynch also said federal employees on average make less than their private sector counterparts.

Berry continued to address what he called long-standing misnomers about federal jobs.

“If you look at the same occupation, for instance attorney, half earn less than $90,000 the first year while their private sector counterparts in the first year earn $145,000,” Berry said. “Federal cooks may seem overpaid, but many work in the prison system and supervise inmates and have dangerous jobs.”

Berry also tried to head off criticism about federal benefits by pointing out that the federal government reformed its benefits system 25 years ago. He said the feds are not facing the same financial crisis as many states are because of workers’ pension costs.

Berry said employees pay a large percentage or all of their benefits, including 30 percent of their health care costs, 100 percent of their dental and vision benefits and 100 percent of their long term care benefits.

“I reject the myth federal workers are overpaid,” he said. “They’re not.”

But Chaffetz and subcommittee chairman Dennis Ross (R-Fla.) continued to make the argument that federal workers receive 30-to-40 percent more than the private sector.

Specifically, Ross asked Berry about employees’ entire benefits package, including job security. He said that should factor in as well.

Andrew Biggs, a Resident Scholar at the American Enterprise Institute, said job security increases the value of federal pay and benefits by 11 percent. Biggs said when he looked at federal employees’ overall package, on average, it’s 39 percent higher than the private sector.

Berry said federal agencies do have a retention problem just like the private sector.

Berry said in 2005, the government hired 5,300 doctors and nurses. In 2011, 2,300 doctors and nurses, or 43 percent, left government service.

“One of the biggest concerns we heard about why they are leaving was they thought they were underpaid,” he said.

Ross pushed back saying that overall the government only has a 1.5 percent attrition rate and he doesn’t think it’s that big of a problem.

Chaffetz went after Berry about federal employee bonuses. He said 63 percent of all employees will receive a performance bonus. He said employees receive billions of dollars in step increases as well.

“That is offensive to a lot of people, people who are losing their jobs, and they don’t understand how the President said there is a pay freeze but then handing out bonuses,” Chaffetz said. “It doesn’t make sense.”

Berry pushed back, saying with a workforce of 2.1 million employees, the number seems larger than it is and the average bonus was less than $1,000. Berry said the total bonuses paid out equal less than two percent of the total federal payroll.

Rep. Darrell Issa (R-Calif.), chairman of the full committee, asked Berry if the administration would consider freezing all step increases for 2011. Issa said that would save the government $500 million this year alone, and would be a true pay freeze. He called President Obama’s two-year pay freeze a “farce” because employees still are eligible for pay raises through within-grade increases.

“I think at this point in time, the answer would be no,” Berry responded. “I would be happy to go back and take that back and discuss that with the Office of Management and Budget to see if there would be an opening there.”

Berry added that freezing step increases would give agencies a retention problem.

Issa sponsored an amendment to the current 2011 full year continuing resolution to do just that. House lawmakers did not approve the amendment, but Issa could be positioning to reintroduce such a provision.

Berry and others say it doesn’t matter if federal employees are overpaid or underpaid, but how should the pay system be fixed. If there was one thing that nearly all members and witnesses agreed, the General Schedule (GS) System no longer works.

Berry said it’s been nearly 60 years since the government developed the basic tenets of the GS-system.

Berry said the more important change would be to how agencies measure employee performance.

OPM and the Chief Human Capital Officers Council have been working on reforming the pay system.

“The CHCO Council created a working group led by two career senior executives and they will report in what can we do to tighten and strengthen the federal performance system,” Berry said. “If we can get that right then we can have a discussion about pay.”

(Copyright 2011 by FederalNewsRadio.com. All Rights Reserved.)

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