A Ripe Time for Civil Service Reform?

The Republican leaders for the new Congress were cryptic in their post-election op-ed in The Wall Street Journal, vowing to address “an antiquated government bureaucracy ill-equipped to serve a citizenry facing 21^st century challenges, from disease control to caring for veterans.”

House Speaker John Boehner of Ohio and Senate Majority Leader Mitch McConnell of Kentucky were reacting to well-publicized agency performance issues during 2014. But their reform agenda could well involve changes in federal employee hiring, firing, pay, benefits and conflict adjudication—call it civil service reform of sorts, one step at a time.

“Several Republicans have made clear what their civil service ‘reform’ agenda looks like,” says Carol A. Bonosaro, president of the Senior Executives Association. “We expect more attempts to fire senior executives outright or at least ease the rules, freeze SES performance awards, cut back on benefits, and reduce positions. We’ve heard little or no talk about civil service reform as most of us understand it, that is, addressing issues which hinder attracting and retaining the best, most qualified employees in these challenging times.”

Federal Managers Association National President Patricia J. Niehaus says she expects the new GOP majority to seek “more traction on pay for performance, possibly revising the General Schedule to more easily accommodate the changing mission.” Such a reordering, she says, is needed because “the current system is based more on longevity than performance,” a kind of “pass-fail, checking-the-box” approach that the unions will fight to retain.

Less attractive to federal managers, Niehaus adds, are expected proposals to boost the employee contribution to federal retirement plans.  

In an Oct. 29 letter to the Congressional Budget Office, House Budget Committee Chairman Paul Ryan, R-Wis., and Oversight and Government Reform Committee Chairman Darrell Issa, R-Calif., asked analysts for a model projecting the long-term budgetary effect of the $75 billion-a-year federal retirement system, “based on changes made in recent years to other large pension plans, both public and private, [including]. . . expanding the defined contribution component while reducing the defined benefit component.”

Niehaus says that approach would place undue burden on employees. “For people who have worked for many years under the system as is, to change in midstream would be particularly unfair for those who stayed through a lot of hard times with pay freezes and the hiring freeze,” she says. And the much-discussed bipartisan proposal to recalculate federal benefits’ inflation adjustment—the so-called “chained CPI”—would cost some retirees as much as $50,000 over time, Niehaus adds.

But Max Stier, president and CEO of the nonprofit Partnership for Public Service, says he sees “a real opening among congressional leadership for what can be done to help government operate better.” He points to a memo last fall from House Majority Leader Kevin McCarthy to his caucus, which noted that competency is a trait many found lacking in the government’s handling of the Ebola outbreak, patient scheduling fraud at veterans hospitals and the Secret Service’s failure to guard the White House. In an October interview with Politico, McCarthy suggested setting up a mechanism like the outside commission that closes military bases to tackle agency inefficiencies.

“The issue of competency in government is real for people—you see it in discourse and it could become a real issue in the 2016 presidential campaign,” Stier says, applauding McCarthy for avoiding habitual ideological discussions of the size of government.

According to Stier, the Partnership looks forward to discussions of performance-based pay aligned with the private sector—a topic Sen. Ron Johnson, R-Wis., incoming chairman of the Homeland Security and Governmental Affairs Committee, has flagged for coming hearings. Stier also backs the Competitive Service Act, a governmentwide hiring reform bill, set for reintroduction by Sens. Jon Tester, D-Mont., and Rob Portman, R-Ohio. “Imagine the government operating like just about every other organization,” Stier says, “setting pay on what the market requires for specific talent for individual occupations, not an average of all professions.”

One vivid difference between the new and previous Congress will be coordination between Republicans in the House and Senate on both viable legislation and oversight investigations. Johnson plans to consult with Republicans on bills curbing regulation. His oversight agenda would play off inspector general and Government Accountability Office reports that align with views of House Republicans, as well as former Republican Sen. Tom Coburn’s annual Wastebook, according to Jennifer Mattingley, director of government affairs for the federal employment law firm Shaw Bransford and Roth.

In the House, Rep. Jason Chaffetz, R-Utah, the new Oversight and Government Reform Committee chairman, said in November interviews that he plans to reorganize the committee’s sub-panels and hone legislation to reform areas such as embassy security and U.S. Postal Service operations. He may again offer his Federal Employee Tax Accountability Act, which would require agencies to fire federal employees who are delinquent on their taxes

Chaffetz could also join Sens. Chuck Grassley, R-Iowa, and Tester in pressing to trim the number of federal employees on paid administrative leave pending investigations for misconduct, according to House Democratic staff. Look for a reintroduced House version from Rep. Tim Walberg, R-Mich. The issue of extended leave for highly paid executives at the Environmental Protection Agency, the Veterans Affairs Department and the National Archives and Records Administration’s inspector general’s office came up in the last congressional session.

“The idea of the bill is to make sure employees who might be dangerous to others or are at risk of performing criminal conduct, for example, are kept away from the workplace while administrative cases are pending, but the many others who simply are the subject of an administrative dispute should be working while their cases are adjudicated,” says Grassley aide Jill Gerber.

But measures to curb administrative leave, like the bill passed in 2014 to make it easier to fire malfeasant executives at VA, are viewed by workforce advocates as part of the “appetite among some Republicans to make the federal workforce basically at-will employees,” a Democratic aide says. 

“It’s taking away protections that were put in place for a reason,” FMA’s Niehaus adds. “It is not currently impossible to fire federal executives—I’m an HR specialist, and we do it when necessary and appropriate. But you don’t do it on a whim, but on the basis of an acute cause.” If long-standing protections are called into question, she adds, “will General Schedule and wage employees be next?”

On a more modest scale, House Democrats also see possibility for smaller bipartisan bills to, for example, give federal employees more time off to volunteer at schools or perform other community service. In other reform efforts, Sen. Richard Burr, R-N.C., is on course to reintroduce his bill to curb costly duplication by consolidating the Labor and Commerce departments, a proposal similar to one President Obama sought authority to pursue in 2012. “Unfortunately, Senate Democrats dropped the ball on the bipartisan idea of agency consolidation,” Burr says. “I look forward to working with my colleagues in the new Congress to advance the sensible goal of reducing spending and making government more effective.”

The GOP reform theme stressing competency is less than inspiring to federal employee organizations. “Who doesn’t want competency?” says Jessica Klement, legislative director of the National Active and Retired Federal Employees Association. “Not everyone’s perfect, and there are problem employees in government who make mistakes no different from in any other workplace. Some underperform, some overperform, and there’s a whole bunch in middle.” 

Republicans such as Issa and Coburn pursued civil service reform for years, but often cited opposition from unions, Klement notes. “It would obviously be easier now that [Republicans] control both chambers. But the problem is twofold: one was tried at the Defense Department and failed,” she says, referring to President George W. Bush’s discontinued effort to link pay with performance, called the National Security Personnel System. “And the second problem is reform is incredibly expensive. You can’t pay for performance without figuring ways to reward the top performers,” she says. 

Klement says NARFE leaders agree reform is necessary, though. “I don’t think the GS appeals to today’s job seekers and talents. And only those agencies with flexibility, like the Securities and Exchange Commission and the Federal Aviation Administration, attract top talent,” she says. “GS was created in the 1950s. “It’s time for a change. The appetite is there, but the environment to carry it out is not.”