The busy season

Congress returned from its August recess this week with several federal pay and benefits issues awaiting action.

The most important issue is the structure of the government's compensation system, which could face major revamping under legislation creating the new Department of Homeland Security. The Bush administration's proposal for the new department would give political appointees in the executive branch the ability to restructure the way the 170,000 employees of the new department will be paid.

Any new personnel system created for the department would most likely involve pay-for-performance or pay-banding to modify or replace the government's current tenure-based General Schedule pay system. Officials at many agencies across government have been clamoring for such authority for years. Personnel freedom at the new department could be a harbinger of change for other agencies as well.

Administration officials have threatened to veto any homeland security legislation that doesn't cede power over personnel issues, such as pay, to the executive branch.

But Senate Democrats don't favor such wide-ranging personnel measures. The Democratic plan doesn't allow for pay-banding or changes to the General Schedule, but it would give agencies across government the ability to offer a new form of buyouts to employees.

While the Senate and the Bush administration battle over the government's personnel system, lawmakers will also have to decide how much of a raise to give federal workers in January.

The administration proposed a 2.6 percent raise effective in January, but lawmakers in both the House and Senate have proposed an average 4.1 percent raise. The 4.1 percent raise is included in the 2003 Treasury-Postal Appropriations bill, one of the 13 spending bills that Congress must pass before it recesses for the November elections. The administration, in a statement of its policy, said it didn't support the higher raise-but didn't mention a veto either.

Last weekend, President Bush allowed a provision to go into effect under the 1990 Federal Employees Pay Comparability Act that would grant federal employees a base pay increase of 3.1 percent next year. A decision about additional locality-based increases is still pending.

One of the lawmakers pushing the 4.1 percent raise, Rep. Connie Morella, R-Md., is also trying to get fellow lawmakers to approve a change to the 401k-style Thrift Savings Plan. The change would let federal employees who are 50 or older in 2003 make up to $2,000 in so-called "catch-up" contributions on top of the contributions they make under normal TSP rules. The normal annual limit is $12,000 for 2003.

Fifty-or-older feds could contribute up to $14,000 next year if Morella's bill makes it through Congress and to President Bush for his signature.

The Senior Executives Association, meanwhile, is pushing for better pay for the 7,000 members of the federal Senior Executive Service, the top cadre of career officials in the executive branch. The association will hold a town hall meeting on Capitol Hill Thursday to convince lawmakers that poor pay is hurting recruitment and retention of government executives. Carol Bonosaro, president of the association, said she hopes the meeting will gather support from more members of Congress. The administration could help that effort if it came out in favor of better pay for the executives, but administration officials have yet to endorse the association's efforts.

Bonosaro is also pushing for the new Homeland Security Department to retain the current Senior Executive Service pay system for the new department's top career officials. "There's an enormous amount of flexibility in terms of performance management in the existing Senior Executive Service," Bonosaro said. But the administration's plan for the new department doesn't address the Senior Executive Service. Since the administration's plan does call for personnel freedom, the executive service pay system could face some changes if the administration's plan becomes law.

The compensation system, pay raise, TSP change and executive pay issues could be resolved by November, when lawmakers will leave Washington for last-minute campaigning. But federal workers may have to wait until after the elections for resolution if Congress is unable to complete its work and is forced to return to Capitol Hill for a lame-duck session.