American Federation of Technical Engineers, AFL-CIO.. 249 American Optometric Association. 348 Association of Engineers and Scientists of the U.S. Navy Underwater Sound Laboratory- 196 National Association of ASCS County Office Employees.. National Association of Internal Revenue Employees_. 156 64, 336 National Association of Postal Supervisors___ 119 Branch 139, Salt Lake City... 344 National Association of Post Office Mail Handlers, Watchmen, Mes- REFORM IN STATUTORY PAY PROVISIONS TUESDAY, FEBRUARY 6, 1962 U.S. SENATE, COMMITTEE ON POST OFFICE AND CIVIL SERVICE, Washington, D.C. The committee met, pursuant to call, at 10:30 a.m., in room 6202, New Senate Office Building, Hon. Olin D. Johnston (chairman of the committee) presiding. Present: Senators Johnston (chairman of the committee), Monroney, Clark, Jordan, Randolph, Carlson, Fong, and Boggs. Also present: William P. Gulledge, staff director and counsel; J. Don Kerlin, assistant staff director; and Frank A. Paschal, minority clerk. The CHAIRMAN. The hearing will come to order. Today's hearing is for the purpose of developing a framework of reference for later use. The President in his state of the Union message referred to the need for pay reforms aimed at giving our classified, postal, and other employees new pay scales more comparable to those of private industry. The press has reported widely on recent and current studies made by direction of the President by a special task force and Presidential Pay Committee often referred to as the Randall committee. It is understood that the Bureau of Labor Statistics has stepped up and refined its surveys to the point that it is now possible to make better comparison between salaries paid in private industry and those in the Federal service. There may be other factors of a significant nature. Against this backdrop of developments the committee thought it would be well to give the administration an opportunity to describe fully and explain in depth what it has done, is doing, and thinks should be done to accomplish the objective referred to by the President. Because the hearing today will be limited to what I have just outlined, only the Bureau of the Budget and the Civil Service Commission were invited to appear at this time. Later they will be asked to return to discuss in detail needed adjustments in specific pay schedules and necessary or desirable changes in existing pay statutes. As the hearings progress other departments and agencies, representatives of employee organizations, individual employees, and representatives of the public will be given ample opportunity to be heard. As announced, S. 2712 is being used as the vehicle for the purpose of these hearings. This is the bill I introduced on January 18, 1962, 1 and is designed to place postal employees on a comparable basis with other Federal employees with respect to longevity increases. A copy of the measure will be included in the record at this point. (S. 2712 follows:) [S. 2712, 87th Cong., 2d sess.] A BILL To amend the provisions of law relating to longevity step increases for postal employees. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That subsections (a) and (b) of section 3558 of title 39 of the United States Code are amended to read as follows: "(a) There are established for each employee longevity steps, A, B, and C. For each longevity step to which he is entitled "(1) each employee, other than a postmaster at a post office of the fourth class or a rural carier, shall receive an amount equal to one step increase for his position, "(2) each rural carrier shall receive an amount equal to one step increase for salary level PFS-4, and "(3) each postmaster at a post office of the fourth class shall receive an amount equal to one step increase for salary level PFS-1 or to 6 per centum of his basic salary, whichever is the lesser. In computing the percentage increase under this subsection the amount of the increase shall be rounded to the nearest dollar. A half dollar or one-half cent shall be rounded to the next highest dollar or cent, respectively. "(b) Each employee shall be assigned to "(1) longevity step A at the beginning of the pay period following the completion of ten years of service; and "(2) longevity step B at the beginning of the pay period following the completion of thirteen years of service; and "(3) longevity step C at the beginning of the pay period following the completion of sixteen years of service." SEC. 2. No increase in compensation shall result from the amendment made by this Act prior to the first day of the first pay period following the date of its enactment. The CHAIRMAN. It is with great regret that I note the absence here. today of Jerome Keating, who unfortunately is in the hospital at this moment and, I am glad to say, recovering from an operation. I am confident each of you joins me in wishing Jerome a speedy and full recovery. I trust the word will reach him that he is greatly missed and will be warmly welcomed back when he is again able to be with us. Senator CARLSON. Mr. Chairman, I just wish to make a very brief statement. I, too, regret the absence of Jerome Keating and surely hope he will soon be back with us because he has been so helpful in hearings we have had in the past and we miss him very much. Secondly, I am pleased that you did call this hearing this morning because the only information I have had with regard to pay increases for our Federal workers has been in the press, and we have had many statements and many articles written that indicate that we are going to get proposals that will greatly increase the pay of the upper bracket people; but very little, if any, for the lower bracket people. I think it is important that we start these hearings and begin to get something to bite our teeth into as we go into a pay hearing. As one member of the committee, I certainly am not going to be for a program that would just take care of upper bracket people. I think our Federal employees, classified and postal, in the lower brackets are entitled to consideration. The CHAIRMAN. I am certainly glad to hear these remarks from the ranking member on the Republican side. I will say this of Senator Carlson: He and I usually see eye to eye in these matters. I am glad to have his opinion. The other members of the committee have indicated that they have no statements to make at this time. I now call on our first witness, the Honorable Elmer Staats, Deputy Director of the Bureau of the Budget. STATEMENT OF HON. ELMER B. STAATS, DEPUTY DIRECTOR, BUREAU OF THE BUDGET; ACCOMPANIED BY SPENCER PLATT, ASSISTANT CHIEF; AND WILLIAM H. LEHMAN, MANAGEMENT ANALYST, OFFICE OF MANAGEMENT AND ORGANIZATION, BUREAU OF THE BUDGET Mr. STAATS. Mr. Chairman, it is a great pleasure for me to have the opportunity to come back before this committee, which I have had the pleasure of appearing before a good many times. I would like to say at the outset that we realize that your time is somewhat limited here today and that you desire to allow the Chairman of the Civil Service Commission a full opportunity to make a general presentation as well. I have prepared a detailed background statement which I would like to supply for the record. I will read only a very brief part of that statement, Mr. Chairman. I would like to make some remarks from notes here which, I believe, and I hope, will be helpful to this committee. The CHAIRMAN. You may proceed as you wish. Your entire statement will be made a part of the record at this point. (The statement referred to above follows:) STATEMENT OF ELMER B. STAATS, DEPUTY DIrector of the BUREAU OF THE BUDGET Mr. Chairman and members of the committee, we appreciate this opportunity to present the background and broad outline of the administration's position on Federal pay legislation in 1962. There is definite need for fundamental reform of the Government's statutory white-collar salary systems (1) to adopt a principle and a process for fixing salaries and maintaining them at the proper levels according to that principle, and (2) to adopt a principle to govern pay relationships in the Government and a revised salary structure and rules based on that principle. The President now has under final review and will shortly send to the Congress a reform plan to effect the needed reorganization of Federal salary systems and to provide such salary increases as result from applying these principles. This statement will give some background of the President's reform plan, will state the functions and requisites of a sound Federal salary system, and state the defects of the present systems. This will be followed by a full statement of the basis for the proposed reform: its standards and principles and the methods for giving them practical effect. Finally, there will be a comment on the timing of the plan. BACKGROUND OF PRESIDENT'S PROPOSAL The President's plan is to be much more than a mere recommendation for an upward adjustment of pay. It will reform and interrelate all Federal statutory pay systems; namely, the Classification Act, the postal field service, the Foreign Service, and the system for doctors, dentists, and nurses in the Department of Medicine and Surgery of the Veterans' Administration. These systems fix salaries for 1,600,000 of the total of 2,400,000 Federal civilian employees, and account for $10 billion of the annual Federal civilian payroll of $13 billion plus. The President's plan will base pay in all of these systems on a common set of |