OMB briefs unions on 'Freedom to Manage'

In what union officials described as the first real dialogue between the Bush administration and federal labor groups, the Office of Management and Budget briefed the two largest unions representing federal employees on the administration's "Freedom to Manage" legislative package last week. Office of Federal Procurement Policy Administrator Angela Styles initiated and led the briefings, according to officials with the American Federation of Government Employees and the National Treasury Employees Union, who met with Styles and staff from OMB, the Office of Personnel Management and the General Services Administration. "[Styles] called us and said 'we've had so little communication, we've been communicating in the press,'" said Jacque Simon, public policy director at AFGE, which represents 600,000 federal employees. "She proposed that we meet regularly." OMB and federal unions have been on uneasy terms since February, when the White House scrapped a Clinton administration directive on labor-management partnerships. In March, OMB launched its competitive sourcing program, which unions view as an effort to contract-out more federal work to the private sector. Last month, union leaders were quick to denounce OMB's proposed Managerial Flexibility Act, one half of the Freedom to Manage package, as a boon for senior executives that would do little to solve the government's alleged human capital problem. "It is a 'let-them-eat cake' approach to the human capital challenges facing the federal government," said AFGE president Bobby L. Harnage last month. Despite these differences, Styles and union officials generally agreed that the meetings went well. "The meetings were a good exchange of information and ideas," said Styles, who added that union concerns with the legislation were "frankly and openly discussed." Simon agreed and said that AFGE could envision working with Styles in the future. "[Styles] has a good reputation for being a straight shooter," said Simon. But both unions oppose the Managerial Flexibility Act, and it is unclear whether the White House would consider revising the legislation in exchange for union support. When asked if changes to the legislation would be considered, Styles said the administration would continue to work with Congress and others to "review reservations" about the proposal. The unions oppose measures in the bill that would raise the cap on total compensation for members of the Senior Executive Service and let agencies design personnel systems that could be exempt from Title 5, which contains the merit system rules governing most of the federal workforce. AFGE believes another proposal in the bill would make it easier to outsource federal jobs to private firms--a factor that helps explain Styles' presence at the meeting, Simon said. Besides being the government's procurement chief, Styles is also responsible for OMB's competitive sourcing program. "It's obviously peculiar that the head of OFPP would come to explain a civil service change if it was just a civil service change," said Simon. Styles said the OFPP administrator has often helped coordinate briefings with NTEU and AFGE in the past. The proposal in question would charge agencies for the full employer share of certain pension and retiree health benefits. At present, these benefits are paid for out of the Treasury's general fund. OMB believes the proposal would give federal managers an accurate picture of federal personnel costs and help them decide whether to compete federal jobs with the private sector. AFGE disagrees. If agencies picked up the full-benefit tab it would make their programs appear to be more expensive, putting in-house workers at a disadvantage in job competitions with the private sector. These competitions are decided on the basis of cost, according to Simon. "Presenting costs in that manner only serves to put us at a greater cost disadvantage in A-76 competitions, and the government doesn't save a dime," she said. AFGE is also opposed to a forthcoming Bush proposal that would bill agency programs for all the support services and capital assets they use. OMB efforts to make agency programs pay more overhead costs will flounder on Capitol Hill, Simon predicted. "I don't think they're going to have much of a chance [with Congress]," she said. The Clinton administration twice failed to persuade Congress to make agencies pay the full employer share of health and pension benefits.