We have been advised the pay of the Governors was not included in the bill because they serve on an intermittent part-time basis, while others whose pay is subject to Commission review are full-time officers. There would appear to be no inherent reason why the Commission could not evaluate the pay of part-time officers and make recommendations thereon. Moreover, in view of the unique character and importance of their positions, the fact that they are part-time officers does not appear to be an adequate reason for omitting the pay of the Governors from the scope of Commission review. They are the ultimate authority in the Postal Service, since they appoint and may remove the Postmaster General and constitute, with him and the Deputy Postmaster General, the Board of Governors, charged with the direction of the exercise of the powers of the Postal Service. The inclusion of their pay in the scope of the Salary Commission's review by the Postal Reorganization Act was in recognition of the importance of the positions they occupy and of the need to adjust their pay along with the pay of other top officials, without requiring legislative action. Leaving the statute as it now stands does not, of course, obligate the Commission to recommend an increase in compensation for the Governors if such action does not appear to be justified. The Postal Reorganization Act granted broad independent authority to the Postal Service to determine administratively or through collective bargaining the pay of postal employees. It would be completely inconsistent with this action to tie the Governors' pay more rigidly into statute than that of other top officials working in agencies whose operations are not nearly as independent as those of the Fostal Service. - - As a technical matter, if the present provision of the Salary Act including the pay of the Governors section 225(f)(E) is retained, section (3) of the bill should insert into the Salary Act a new subparagraph (F) rather than replacing subparagraph (E) as it presently does. In addition, corresponding changes should be made in sections (4) and (5) of the bill to correct the inadvertent omission from the Salary Act of references in sections 225(g) and (h) to section 225(f) (E), and to reflect the addition of section 225(f) (F) by the bill. Sincerely, Lois & Cox Louis A Cox General Counsel Honorable Thaddeus J. Dulski and Civil Service House of Representatives Washington, D. C. 20515 Mr. DULSKI. I am pleased to have as our first witness, the Honorable Robert E. Hampton, Chairman, U.S. Civil Service Commission. STATEMENT OF HON. ROBERT E. HAMPTON, CHAIRMAN, U.S. CIVIL SERVICE COMMISSION, ACCOMPANIED BY FRANK S. MELLOR, CHIEF, SALARY POLICY SECTION Mr. HAMPTON. Thank you, Mr. Chairman. Mr. Chairman and members of the committee, I appreciate the opportunity to appear this morning to present the views of the administration on S. 1989, a bill designed to improve the present procedure for adjusting the salaries of the Government's top officials. The Commission on Executive, Legislative, and Judicial Salaries has submitted its report on new salaries to the President on June 30. Under present law, he will review this report and transmit his own recommendations on new salaries for top officials to the Congress next January as a part of his budget message. If neither House of Congress disapproves the President's recommendations in the following 30 days, his recommendations will go into effect. S. 1989 would change this timetable. Under this bill, the President would transmit his recommendations to Congress by August 31, and the new pay rates, unless disapproved by either House of Congress, would go into effect about October 1, or on such later date as the President might recommend. Under S. 1989, this whole adjustment procedure, including the establishment of the Commission on Executive, Legislative, and Judicial Salaries, would occur every 2 years instead of on the present 4-year cycle. Also, this bill would add the salaries of seven offices to those presently covered under this adjustment procedure. These seven are the Vice President of the United States, the Speaker of the House of Representatives, the President pro tempore of the Senate, and the majority and minority leaders of both the Senate and the House of Representatives. We view all of these changes in the adjustment procedure for the salaries of the Government's top officials as highly desirable and we strongly support them. In particular, the change from a guadrennial to a biennial review and adjustment is a considerable improvement, since more frequent reviews and, if warranted, adjustments, will enable us to avoid increases of the size of the 1969 pay increase, but still allow us to maintain appropriate salaries for the Government's leaders. The bill would allow these pay adjustments to be effective at the same time of year as the annual comparability adjustment for the General Schedule and the related statutory pay systems which would enable us to better maintain appropriate pay relationships between employees under the General Schedule and their superiors under the Executive Schedule. In summary, through changes in timing, in frequency, and in coordination with other Federal pay adjustments, S. 1989 would provide very worthwhile improvements in the adjustment procedure for the salaries of the Government's top officials. Mr. Chairman, we would be glad to answer any questions that the committee would want to ask us. Mr. DULSKI. Mr. Hampton, I understand that both you and the Office of Management and Budget strongly support this legislation. Does it have the support of the White House? Mr. HAMPTON. Yes, sir. Mr. DULSKI. If the legislation is enacted, would it follow automatically that the top salary rates would be adjusted next October as all the newspaper stories seem to indicate, or can we expect the President to make his recommendations in August, containing the provision to place the salary adjustments in effect next year? Mr. HAMPTON. Mr. Chairman, the President has not reviewed the recommendations of the committee-rather, the Commission, and has not made any decision in terms of the amount of any such pay increase nor any effective date. Mr. DULSKI. Would you agree that this bill will not provide for salary adjustments next October and that the effective date of any adjustments is entirely up to the President? Mr. HAMPTON. The effective date of the next adjustment would be dependent upon the President's recommendations, subject to disapproval of either the Senate or the House. But the initiative on the effective date under this bill and under the law now in existence rests with the President. Mr. DULSKI. Thank you, Mr. Hampton. Mr. Gross. Mr. GROSS. Mr. Chairman, is it proposed to have the Office of Management and Budget represented at these hearings now or later? Mr. DULSKI. As I understand it, we have a letter from Mr. Wilfred H. Rommel, Assistant Director for Legislative Reference, Executive Office of the President, Office of Management and Budget, which I already have inserted in the record. Mr. GROSS. Mr. Chairman, I can read that letter. The point is that I would like to look at these people and have them tell me that in view of the financial crises that confronts this country, that they are prepared to support this kind of a pay increase, the terms and conditions of this pay increase. I would hope that there would be someone here, preferably the Director of the Office of Management and Budget, Mr. Ash. I assume that someone could be here speaking for the Chairman of the Civil Service Commission and Mr. HAMPTON. Mr. Gross, would you like me to comment on that? Mr. GROSS [continuing]. Speaking for the Civil Service Commission in saying that the Civil Service Commission also joins in this representation that we make. But I doubt that the committee will be satisfied with this secondhand endorsement by the Civil Service Commission under those circumstances. Does the gentleman wish to say something? Mr. HAMPTON. Yes, sir. Mr. Gross, in my statement, I said that I was presenting the views of the administration and not solely those of the Civil Service Commission. I participated in the discussions in the White House on the support for the S. 1989, and it was decided that I would be the person who would present the administration's views so I am speaking for the administration as a whole and my statement has been clear. Mr. GROSS. But you would hardly be expected, Mr. Hampton, to speak with the definiteness of the Office of Management and Budget with respect to the fiscal conditions of this country, is that not true? Mr. HAMPTON. No, sir. I am not an economist nor a budget expert. Mr. GROSS. Well, that is the point exactly. Mr. Chairman, I would like to renew my request that we have the Director of the Office of Management and Budget before the committee. In 1969, Mr. Hampton, the President recommended and the Congress approved almost a 42-percent increase in pay for the Members of Congress. This, in effect, triggered a nationwide demand from both the private and public sector for increased wages and escalated the inflation, and while our economy is already experiencing now an uncommon rate of inflation and while we will continue to receive Presidential admonitions on curbing wages and prices, why do you come before us to suggest, of all things, a request which would add fuel to the fires of inflation? Mr. HAMPTON. Well, Mr. Gross, I have tried many, many times to look at a study or comments by experts on questions of whether or not Federal pay adjustments are inflationary. There is no evidence that has been presented in any study by economists that can tie Federal pay adjustments—and that includes executives to trigger inflation. The adjustments that have been made in the Federal pay are adjusments that follow, rather than lead private enterprise. They are adjustments that are based upon figures that are gathered in the private sector. As far as this bill is concerned, we are dealing here with mechanics and procedures and not specifically with any amount of a pay increase. But I know from our conversations that you feel that this is an invitation to a pay increase. Certainly it is an invitation to a pay increase on a timely basis. In our economy, I know of no group, other than for a short period of time during the freeze, that has not had their pay adjusted. Since the last pay adjustment for executives, members of the judiciary and the Members of the Congress, the pay of classified employees and other employees in the Federal sector have gone up in excess of 35 percent. In addition, the annuities received by retired people in this same. timeframe have increased by 30 percent. The cost of living and the cost of living index has increased 23 percent. As I mentioned earlier, I know of no groups in the private sector that, in this time, have been denied pay increases. So I mean I feel that the principal Government officials in this very powerful and rich country of ours, responsible for expenditures over $250 billion or $260 billion, should at least keep even with the rest of the world. I think we need good management. I think we need to attract good people, and I think that their pay should relate somewhat to the responsibilities and the accountabilities that they have. Since 1971, the top career executives in the Federal Government. and I emphasize I am talking about career employees have not received any adjustment in their pay. In 1972, that came to include GS-17's, and now we have a compression that goes down to-we have one pay rate for every one in grade 16, step 6 and above, 17 and 18, and level V. When you put all of these factors together, I cannot see how this would be inflationary. Now, I think that any adjustment that the President may recommend would be consistent with the guidelines issued during the economic stabilization period, but that is an issue in terms of the amount, in terms of the timeliness and not so much the mechanics which this particular bill deals with. But I think on that issue of the pay increase, I think it is needed. I think it is justified, and I would strongly support it even though I may lose on the issue in the long run. Mr. GROSS. Well, in view of your statement, how do you reconcile the fact that the administration continues to urge the private sector to hold a 52-percent wage guideline, continues to urge the Congress to hold the line on Federal spending, and you, as a spokesman for the administration, come to the committee with a recommendation for a biennial review of executive, judicial, and legislative salary increases? Mr. HAMPTON. In terms of overall budget, I do not think that the amount of money that is involved here is significant and would be absorbed. We would not require additional expenditures, at least speaking for the executive branch. You will have to address that question to the people from the Administrative Office of the U.S. Courts, as far as the judicial is concerned. Mr. GROSS. That is a good deal like saying gasoline tax is a small tax upon the basis of the tax per gallon. But it seems to me, to build up considerably in the cumulative, does it not? What are you saying? That a salary increase is infinitesimal? It means nothing? Mr. HAMPTON. No; I would not say that it did not mean anything. I mean money is money, as far as that is concerned. But I think that when you have a group of men that are providing the leadership and the energy and so forth to run this Government, to make it better managed, I do not think that they should be singled out to be denied an opportunity just even to keep up with the cost of living when, even under a stringent economic program, no other group has been so denied. Mr. GROSS. Of course, this is the rat chasing its tail. If you continue in the Federal Government to set the pace with 20 percent, or 42-percent increases in the Federal Government, what do you expect in the private economy? How do you meet the dire threat of inflation, when it has chopped the dollar down to 31 cents already, by your statement? Mr. HAMPTON. Well, as I mentioned earlier, sir, I am not sure we can relate this directly to the cause of inflation. Mr. GROSS. Well, I do not want to take up all the time. Mr. DULSKI. Mr. Hanley. Mr. HANLEY. Thank you very much, Mr. Chairman. |