White House restores bonuses for appointees

Political appointees throughout the federal government may receive cash bonuses to reward them for outstanding work, the White House said Wednesday. The move reinstates a practice abandoned in 1994 after senior political officials in the first Bush administration were given monetary awards before leaving office, prompting criticism that the practice had devolved into recognition of loyalty more than job performance.

The new rules of the bonus plan were outlined in a March memo from White House Chief of Staff Andrew Card that wasn't released publicly until Wednesday. "All awards must be based on substantial work achievements that go well beyond the performance of routine duties," Card wrote. He asked Cabinet members and agency heads to judge and reward political appointees in the same manner as career employees, and to personally review any awards proposed.

"Federal workers deserve to be rewarded for good work, and there should not be a distinction" between career and political workers, White House spokesman Ari Fleischer said Wednesday. He said that previous administrations have used the bonus system and that the practice had received bipartisan support.

The policy fits the administration's focus of rewarding performance throughout government and of adopting private sector practices of accountability and reward.

News of the plan comes amid a series of recent administration actions that have hurt morale throughout the federal workforce, said Carol Bonosaro, president of the Senior Executives Association. "It comes at a time when career executives certainly have no relief in sight for pay compression; they have an administration [that] has taken serious and substantive efforts to ensure their performance is managed so that it will result clearly in fewer outstanding ratings…when you add all that up it doesn't come at a good time."

Last week, President Bush announced he would limit the pay raise of federal civilian workers to 3.1 percent next year, 1 percent less than the increase Congress is seeking.

National Treasury Employees Union President Colleen Kelley blasted the administration's bonus plan, calling it "just another example of the mistaken message being sent to federal workers that they are less and less important to the nation and to getting done the work of the American people."

Critics of political bonuses said it could pit career and noncareer employees against each other in competition for the pool of award funds. They also said it could foster a rewards system based on favoritism.

"I think it's a dangerous precedent to establish," former White House Chief of Staff Leon Panetta told The New York Times Tuesday. "If you start giving cash awards to political appointees, it can be abused by handing out cash because someone's doing a good job politically or just knows the right people."

Panetta banned bonuses to senior political appointees when he served under President Clinton.

Some worry that the bonuses also could hurt efforts to increase the base pay of career and political executives, said Paul Light, director of the governmental studies program at the Brookings Institution in Washington.

"I really believe you can justify a significant increase in base pay of political and career executives," Light said, but he added that the bonuses wouldn't do much to further that goal "because the American public is going to be appropriately dubious about why senior political appointees would need bonuses."

But supporters said giving bonuses helps lessen pay gaps that have existed for years, since top career executives routinely receive performance bonuses. "Over the last 20 years the disparity in compensation between career officials and political appointees has grown to be huge," said George Nesterczuk, an associate director of the Office of Personnel Management during the Reagan administration. "This is a reasonable first step in trying to realign that."

The bonus policy applies to schedule C employees and noncareer Senior Executive Service personnel. Schedule C employees are eligible for:

• Cash awards, based on a performance rating of at least "fully successful."
• Cash, time off or nonmonetary items "to recognize contributions to government economy, efficiency or effectiveness."

Noncareer SES personnel are also eligible for awards that recognize those contributions, but may not receive SES performance bonuses. Under federal law, career members of the SES are allowed to receive performance bonuses. About 92 percent of the government's 6,626 executives are career employees. The other 8 percent serve in noncareer, limited-term or limited emergency appointments.

From June 1 during a presidential election year to Inauguration Day, Jan. 20, Schedule C and noncareer SES employees still aren't eligible for cash or time-off awards.

Political employees can also receive bonus compensation through quality step increases (QSIs), which raise base pay. Those increases are more akin to a raise in salary than a bonus.

The Justice and Health and Human Services departments reportedly have begun giving bonuses since the practice was reinstated in late March.

A Justice official said that the department only gave 10 bonuses in fiscal year 2002, from an eligible pool of 121 political appointees. They all were based on merit and were awarded to employees that had served at least one year. No award exceeded $5,000.

The official also said that any Justice office can give bonuses during the year, but that the money must come from the organization's budget and the decision must be reviewed by management.

Officials from HHS didn't respond to requests for comment about the awards they've made.

Fleischer said the bonuses wouldn't draw money away from career employees because the new plan only applies to about 2,000 political appointees, "very few of which will receive bonuses." There are more than 1.8 million federal civilian employees.

Senate-confirmed appointees and White House personnel aren't eligible for the bonuses, Fleischer said.

Brian Friel and Jason Peckenpaugh contributed to this report.