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Mr. PRANGER. I said, sir, it looks like parts of it. It does not appear to be the entire plan. I do not have the entire work plan with me.
The CHAIRMAN. But you could not give us the entire work plan?
Mr. PRANGER. No, sir. I am not allowed to release that. My understanding is, you have requested it and that they are discussing it with counsel, in terms of whether or not they may release it, sir.
The CHAIRMAN. So I cannot ask any questions with respect to what is on your work plan?
Mr. PRANGER. Sir, you can ask any questions you want to, but I am simply telling you that I am told I am not at liberty to discuss or not discuss it. But I can assure you, we are looking at efficiency of operation of the Office of Personnel Management.
The CHAIRMAN. Let us look at the column of "Estimated Savings Over Improvements.” It says,
CBO report suggests changes aggregating $23 billion over the period 1983 to 1987. The actuary's report 1980 indicates current assumptions are unrealistic. More reasonable assumptions would increase costs as a percentage of payroll from 26 percent to 43 percent.
Can you tell me what kind of costs they are talking about and what the $23 billion represents?
Mr. PRANGER. Sir, as we go through this. We are in the stage of reviewing all possible sources of information on all major aspects of personnel administration, sir. I said that in my statement. From that, obviously you can assume that we are looking at the areas you are talking about. We are in the process of trying to refine those figures, and in the process we have talked to Federal officials, which include people in the Office of Personnel Management who are the management officials responsible for these programs we are looking at.
The CHAIRMAN. When you get into Federal employees health benefits, you do start to sound like the charter of the survey. You say, "The concerns are the level of costs,” “Health care cost escalation in the United States," and "administrative complexity.” Now, of those three, the "administrative complexity” is fairly easy for me to identify with what the task force is supposed to be doing. Then, when I look at the level of costs, and then go across to the next column, I am trying to relate them one to the other. It says, “Private sector experience indicates savings from 15 to 30 percent not uncommon just from improved claim control procedures." Now, that seems consistent with what the survey set out to do.
“Application of Business Round Table health initiative approaches to FEHBP would constitute an improvement." That is an assumption that you must base on some examination of both present practices, your own experiences therewith and then “the application of the Business Round Table health initiative approaches" suggests that you have familiarity with that; and then finally, "savings from simple administration cannot be estimated at this time.” You allocate 8 man-weeks to the concerns.
Then you go on, “pay for time not worked.” “Concerns are cost of vacation and cost of sick leave.” “Cost of vacation for Federal employees in 1980 was 7.4 percent of payroll, versus 4.9 percent in the private sector. Cost of sick leave for Federal employees in 1980 were 3 percent of payroll versus 1.3 in the private sector. Unused sick leave counts as service under CSRS." In looking at those, are you trying to determine why, administratively, the cost of vacations for Federal employees in 1980 were 7.4 percent of payroll, versus 4.9 in the private sector, or are you looking at it in terms of whether or not the private sector sample that you used, when compared to the Federal Government, is not as generous in the basic benefits for vacation and basic fringe benefits for vacations?
Mr. PRANGER. Sir, you are leading me back into the specifics in the work plan. I will state that we are using every source, and we are making all kinds of comparisons in terms of all personnel practices in the Federal Government. As I indicated in my statement, this does include baseline analysis of private sector personnel management systems and practices, sir.
I would, once again, want to put in the record the fact that we have reached no conclusions yet, sir. We are still deeply involved in the indepth fact gathering, long before we will be making any final recommendations.
Sir, would you like for the record a copy of the personnel task force members?
The CHAIRMAN. Yes. I am still assuming, in all the optimism I can bring to bear, that when I saw the director sitting in front of me, reading from the list, and he said he would leave the list with us, I specifically said, “If you have no extra copy, we will copy it for you.” I was surprised to find the next day that he did not leave it.
Mr. PRANGER. I have no idea what went on there, sir.
The CHAIRMAN. I am curious as to why there would be any question as to the makeup of the task force.
Mr. PRANGER. I have no problem disclosing the makeup of this task force, sir.
The CHAIRMAN. On September 7, Mr. Bolduc sent a memorandum to desk officers and project managers. While you are not listed as one of the recipients of this memorandum, did that get to you as a task force member?
Mr. PRANGER. Yes, it did, sir.
The CHAIRMAN. This is the memorandum that said, "We would like to begin compiling a list or an accounting of three to five of the most horrifying and ridiculous events, anomalies, conditions, and practices found by your task force.
Were you able to comply with that?
The CHAIRMAN. Would you care to comment, from your position with the task force and your very obvious commitment to the objectives of the task force, on the second sentence of the first paragraph that says, “These need not be large dollar items, but rather should focus on the ridiculous and the absurd.”
Mr. PRANGER. I did not write that memo. I had nothing to do with it. The only comment I will make is, We are not looking for horror stories in the personnel task force, sir.
The CHAIRMAN. So you are ignoring the memo?
Obviously, if there is any example to support a recommendation we make, we will include those in the factual basis for those recommendations. But I repeat once again, we are not looking for horror stories, sir.
The CHAIRMAN. Just between the two of us, what does this memo suggest to you in terms of the direction you will be going in on the activities of your task force?
Mr. PRANGER. I did not even look at it in this way. It did not bother me in the least, one way or the other, sir.
The CHAIRMAN. But did not this memo come from the same person who has given you all your instructions?
Mr. PRANGER. Yes, it did, sir.
The CHAIRMAN. Has he given you any other instructions that you have chosen to disregard?
Mr. PRANGER. No.
The CHAIRMAN. According to the copy of the work plan that we are looking at here, which you say has bits and pieces but may not be complete, it would appear that you should be approaching the time for a second round of draft recommendations in the civil service retirement area. Have there been any draft recommendations formulated? Mr.
PRANGER. No, sir. My people are probably drafting right now. The process we will use, before any recommendation we consider is even forwarded up to the management office, we intend to hold in-depth argumentive-type sessions with the entire task force there. If you want a timetable, my guess is it will probably be in the middle of October before we will be submitting anything up there. As we go through this, I will not say that nobody has, nor begun to, jot down ideas or recommendations, Mr. Chairman. We are still several weeks away from any definitive recommendations. We intend to go through a very intensive arguing-back-and-forth session before anything comes out of this.
The CHAIRMAN. There are several policy issues raised in the work plan, and I would like to ask you if the draft recommendations now address any of those policy issues. The first one is social security coverage for Federal employees.
Mr. PRANGER. I have no draft recommendation on that yet, sir.
The CHAIRMAN. Is the draft recommendation now in preparation addressing itself to that?
Mr. PRANGER. They are probably writing, the people on the task force, and shooting for a deadline of attempting to get those completed in initial draft form on the first week in October. Once again, sir, we will go through an argument internally, in terms of whether or not we will submit them.
The CHAIRMAN. You do not see any significance in a draft coming out in the first week in October, reaching the conclusion that Federal employees should be covered by social security?
Mr. PRANGER. Sir, I hope there is significance in every recommendation we come up with, in terms of the importance of the recommendation. I would hate to think that the people--and I have a mighty fine group on this—are working on something that will not be of significance, in terms of recommendations, in any area we are looking at.
The CHAIRMAN. What about the question of limiting COLA's to estimated private-sector COLA's?
Mr. PRANGER. The same answer, sir.
The CHAIRMAN. And that answer is that you assume they are working on that?
Mr. PRANGER. Yes.
The CHAIRMAN. Again quoting from the work plan, "placing a 50 percent cap on future COLA's for those who retired since 1970?''
Mr. PRANGE I have no idea what is going on in that area, sir. The CHAIRM. J. You do not know?
Mr. PRANGER. They are looking, as I indicated, sir, at all of the major aspects of personnel. Now, once again, you are leading me back into the work plan itself on it. I repeat, again, we have nothing but draft issue papers developed now, the people are working on it, they are continuing to work on what will ultimately be the draft recommendations on it, and I am in no position to even discuss those because we are not even at the point of knowing basically what we are going to recommend on these areas. So you have got me too early for that or too soon in the timetable.
The CHAIRMAN. Not too soon, if you are going to have this by October, the first week in October. That is only a couple of weeks away.
Mr. PRANGER. Well, there are weekends and there are nights to work, sir. We will very probably be working on them.
The CHAIRMAN. So the task force is now working on these things?
Mr. PRANGER. They are drafting all kinds of papers right nowbackground papers, issue papers, summaries of the information that they have gathered, sir. We will repeat, we will go into intense discussions on it. You are too early to try to pin me down, in terms of where this is coming out, sir. I would hope, seriously, and I would hope I would promise you-
The CHAIRMAN. I hope I am not giving you the impression that I am trying to pin you down to anything. I am trying to learn and find out what is going on here. I am having some difficulty understanding the role of the task forces. We have floating around here the idea that 150 top executives, who are accompanied by a whole phalanx of executive talent from their private endeavors, are doing something for us. We expect that report before the end of the year. Then we find that in an area that is very sensitive to this committee, instead of studying particularly the operation of the Office of Personnel Management and the management techniques and strategies that they employ in the administration of numerous programs, you are studying the content of the programs.
I do not think that anybody has any difficulty understanding that both OMB and CBO can develop all kinds of numbers on how you would save billions of dollars in pension payments. But there is a difference, it seems to me, between what the public has been led to believe and the Congress has been led to believe you are looking at and going to give us, and what the Congress, through its committee structure, ought to be looking at in trying to make policy decisions. I find that you are, in your work plan, outlining a program that deals with the most sensitive policy matters presently pending before this committee.
You suggest to me that you are not at liberty to discuss why you are into policy rather than procedure and also suggest that you have never been really instructed to restrict your recommendations to procedure and avoid the pitfall. You have had experience over there and are very much aware of the way in which the community known as the Capitol operates. You smiled a little bit when I asked you if there was any significance in having a report from your task force. Would you not be a little bit uneasy about a report coming out in October, in an election year, a reality that we must take notice of, that had a lot to say about these basic policy issues such as capping COLA's and changing social security coverage?
Mr. PRANGER. Mr. Chairman, the report will not be coming out publicly from the personnel task force. It will be going to the overall executive committee of the PPSSC, and any report that is released will come out of there. It could well be that they do not agree with some of the recommendations we make. So I have no idea on the timing and when that will come out or anything else.
The CHAIRMAN. It was indicated the other day by the witness that the members of the task force were not picked with respect to or because of any particular expertise in the area of program content in the Federal agencies but more because of their experience generally with management in a large organization. You were the Director of Personnel for the U.S. Department of Agriculture for 8 years, and you say, “Just prior to retiring I served 3 years as Associate Director of the Office of Personnel Management. I am currently self-employed as an independent consultant."
You are doing all of this work at the expense of your consulting firm, I take it?
Mr. PRANGER. No. I am on the payroll of the M&I bank corporation for this particular job. I have a list, once again, of the task force members, which indicates the company with which they are working on this.
The CHAIRMAN. You are an employee of whom?
Mr. PRANGER. The Marshall and Ilsley Corp., which is a bank holding company out of Milwaukee. One of our cochairs is Jack Puelicher, who is the chairman of the board and chief executive officer of that corporation.
The CHAIRMAN. How many OPM employees are assigned to work with you over there?
Mr. PRANGER. None.
Mr. PRANGER. We set up interviews, predominantly through the key people on there. If we are interested in a given area, the classification system or something, we set up interviews. They are resources we are talking to; they are not assigned to me in any way. We have received from Dr. Devine carte blanche to talk to any person in the Office of Personnel Management in their area of expertise, but we have none assigned to us.
The CHAIRMAN. Do you have some place from which you operate?
Mr. PRANGER. Yes, sir. We have space in the Office of Personnel Management building.