FEDERAL PAY LEGISLATION

WEDNESDAY, SEPTEMBER 4, 1963

U.S. SENATE,

COMMITTEE ON POST OFFICE AND CIVIL SERVICE,
Washington, D.C.

The committee met at 10:30 a.m., pursuant to call, in room 6202, New Senate Office Building, Senator Olin D. Johnston (chairman of the committee) presiding.

Present: Senators Johnston, Yarborough, McGee, Carlson, and Boggs.

Also present: William P. Gulledge, staff director and counsel; Dr. Robert Sumwalt, assistant staff director; Richard Fuller, professional staff member; David Minton, staff member and Frank A. Paschal, minority clerk.

The CHAIRMAN. The committee will come to order.

Before we proceed today I would like to announce that I have received a telephone call from Senator Randolph expressing his regrets for not being able to attend this morning's session. Senator Randolph informs me that he is attending funeral services in his hometown for a close friend. I know that he is keenly interested in this legislation and I can assure all present that he will follow today's proceedings with interest.

These hearings are convened after due notice so that the committee may take testimony on Federal pay-adjustment legislation. The Salary Reform Act of 1962 expressed congressional endorsement of the comparability principle to assure equity for the Federal employee with his equals throughout the national economy.

The act authorized the President to obtain an annual report of the relationship of Federal salaries to those of private enterprise and to submit to the Congress any adjustments which he thinks are indicated.

The President's recommended adjustments have been introduced and other pay proposals are also being considered. This is an important and complex subject which, I am sure, these hearings will help clarify.

I am glad to welcome here this morning the Honorable John W. Macy, Jr., chairman of the U.S. Civil Service Commission, whose testimony will, I am sure, be of great help to the committee.

Mr. Macy, will you please proceed?

STATEMENT OF HON. JOHN W. MACY, JR., CHAIRMAN, U.S. CIVIL SERVICE COMMISSION; ACCOMPANIED BY O. GLENN STAHL, DIRECTOR, BUREAU OF PROGRAMS AND STANDARDS

Mr. MACY. Thank you very much, Mr. Chairman and members of the committee. I am accompanied today in offering my testimony on

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Federal pay legislation by Glenn Stahl, the Director of the Commission's Bureau of Programs and Standards.

I appreciate very much, Mr. Chairman, your willingness to call this hearing and, as you have indicated, provide an opportunity to explain the significant facts and opinions with respect to Federal pay adjustments.

I am glad to appear before you today, because we are all concerned with a most significant event: The first annual review of Government pay levels under the Federal Salary Reform Act of 1962. The act, as you commented in your opening remarks, provides a sound, modern salary policy. We are now engaged in the first effort to make that policy effective.

On April 29 the President transmitted to Congress the comparison of Federal salaries with those in private enterprise, as required each year by the new salary law, and recommended the revisions in Federal salaries that are necessary to carry out the statutory policy of comparability with private enterprise levels.

At the President's direction, the Civil Service Commission sent to Congress on May 16 a draft of a proposed bill which would put the President's recommended adjustments into effect in January 1964.

The delayed effective date was recommended to supersede the second step in salary increases authorized in the Federal Salary Reform Act. H.R. 7552 and nine other identical bills have been introduced in the House of Representatives and incorporates the President's proposals, which are based on comparability levels as measured in 1962. Also pertinent to consideration of an adjustment of Federal statutory salaries is the report dated June 12 of the President's Advisory Panel on Federal Salary Systems, concerning the top salary levels of the Government.

The President's message transmitted the joint annual report of the Director of the Bureau of the Budget and the Chairman of the Civil Service Commission, and the Commission's draft bill was accompanied by a statement of purpose and justification and a section analysis.

These documents present comprehensively the specific features of the proposal and the facts on which they rest. I assume that they and the report of the Randall Advisory Panel on Federal Salary Systems are in the hands of the committee.

The CHAIRMAN. They all are. I will make the draft bill and the Randall report (Report of the Advisory Panel on Federal Salary Systems) a part of the record at this point. The others will be retained in the committee files.

Mr. MACY. Thank you, Mr. Chairman. (The exhibits are as follows:)

A BILL To adjust the rates of basic compensation of certain officers and employees in the Federal Government and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Federal Salary Adjustment Act of 1963."

PART A-CLASSIFICATION ACT EMPLOYEES

COMPENSATION SCHEDULE

SEC. 101. (a) Subsection (a) of section 602 of the Federal Salary Reform Act of 1962 (76 Stat. 843) is amended to read as follows:

"(a) Section 603(b) of the Classification Act of 1949, as amended (74 Stat. 298; 5 U.S.C. 1113 (b)), is amended to read as follows:

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(b) The compensation schedule for the General Schedule shall be as follows:

(b) The first sentence of subsection (c) of such section 602 is amended by striking out the words "The rates of basic compensation of officers and employees to whom Compensation Schedule II of the General Schedule set forth in subsection (a) of this section applies shall be initially adjusted," and by inserting in lieu thereof, "Except as provided in subsection (d) of section 504 of this Act, the rates of basic compensation of officers and employees to whom the compensation schedule set forth in subsection (a) of this section applies shall be initially adjusted,".

SEC. 102. Section 801 of the Classification Act of 1949, as amended (5 U.S.C. 1131), relating to new appointments, is amended to read as follows:

"SEC. 801. All new appointments shall be made at the minimum rate of the appropriate grade, except that in accordance with regulations prescribed by the Commission which provide for such considerations as the candidate's existing salary, unusually high or unique qualifications, or a special need of the Government for his services, the head of any department may, under such regulations, appoint individuals to positions in grades 13 and above of the General Schedule at such rate or rates above the minimum rate of the appropriate grade as the Commission may authorize for this purpose.".

PART B-POSTAL FIELD SERVICE EMPLOYEES

SEC. 111. Section 1 of title 39, United States Code, is amended by striking the period at the end of the section and inserting in lieu thereof a semicolon, and by adding the following: "revenue unit' means that amount of revenue of a post office from mail and special service transactions which is equal to the average sum of postal rates and fees received by the Department during the fiscal year for one thousand pieces of originating mail and special service transactions determined in accordance with section 2331 of this title.".

SEC. 112. Section 702 of title 39, United States Code, is amended to read as follows:

"§ 702. Classes of Post Offices

"(a) At the beginning of each fiscal year the Postmaster General shall divide post offices into four classes on the basis of the revenue units of each office for the second preceding fiscal year. He shall place in the first class those post offices having nine hundred and fifty or more revenue units. He shall place in the second class those post offices having one hundred and ninety or more revenue units, but less than nine hundred and fifty revenue units. He shall place in the third class those post offices having thirty-six or more revenue units, but less than one hundred and ninety revenue units. He shall place in the fourth class those post offices having less than thirty-six revenue units.

"(b) The Postmaster General shall exclude from the revenue credited to a post office for the purposes of this section money received at that office for—

"(1) setting meters for patrons beyond the area served by the office unless authorized by the Department;

"(2) stamps, stamped envelopes and postal cards sold in large or unusual quantities to be used in mailing matter at other offices; and

"(3) stamps, stamped envelopes and postal cards sold for mailing matter diverted from other offices and mailings of matter so diverted without stamps affixed.

"(c) Whenever unusual conditions prevail at a post office of the fourth class, the Postmaster General may advance such office to the appropriate class based on his estimate of the number of revenue units which the office will have during the succeeding twelve months. Any office so advanced need not be relegated to a lower class before the end of the second complete fiscal year after the advancement. At that time, the office shall be assigned to the appropriate class in accordance with subsections (a) and (b) of this section.".

SEC. 113. Section 704 of title 39, United States Code, is amended by deleting the words "of the first, second, or third class" appearing therein, and inserting in lieu thereof "other than one for which the postmaster furnishes quarters, equipment, and fixtures on an allowance basis".

SEC. 114. Subsection (b)(1) of section 2102 of title 39, United States Code, is amended to read as follows:

"(1) for post offices at which the postmaster does not furnish quarters on an allowance basis;".

SEC. 115. (a) Section 3501 of title 39, United States Code, is amended by(1) Deleting from the first sentence of subsection (a) the following: "standard positions of postmasters in a fourth-class office and rural carrier” and inserting in lieu thereof "standard position of rural carrier".

(2) Inserting a new subsection (c) following subsection (b) as follows: "(c) At the beginning of the first pay period in each calendar year the Postmaster General shall determine and adjust the rankings of all positions for which the number of annual revenue units of a post office or its class is a relevant factor of the ranking, using the revenue units of the preceding fiscal year and the class in which the office will be placed at the beginning of the next fiscal year. The Postmaster General may also adjust rankings of such positions at other times of the year based upon substantial changes in service conditions.".

(b) The following amendments are made to chapter 45 of title 39, United States Code:

(1) In subsection (c) of section 3513—

(A) Change the catchline to read “POST OFFICE CLERK (KP-4)”; and

(B) Add the following new sentence to the end of paragraph (1): "This office has less than one hundred and ninety revenue units annually.".

(2) In subsection (e) of section 3516

(A) Change the catchline to read "POSTMASTER (KP-18)"; (B) Delete "third class” in the first sentence of paragraph (1); and (C) Delete "annual receipts of approximately $1,700" in the second sentence of paragraph (1) and insert in lieu thereof "approximately forty revenue units annually”.

(3) In subsection (b) of section 3517—

(A) Change the catchline to read "POSTMASTER (KP-20)"; (B) Delete "third class" in the first sentence of paragraph (1); and (C) Delete "annual receipts of approximately $4,700" in the second sentence of paragraph (1) and insert in lieu thereof "approximately 110 revenue units annually".

(4) In subsection (b) of section 3518—

(A) Change the catchline to read "POSTMASTER (KP-22)” ;

(B) Delete "third class" in the first sentence of paragraph (1); and (C) Delete "annual receipts of approximately $6,000" in the second sentence of paragraph (1) and insert in lieu thereof “approximately one hundred and forty revenue units annually".