The 511 principal administrative officers of colleges and universities and 143 administrators in the Nation's public school system receive salaries of $20,000 or more per annum.

The pay scales of major foundation and other non-profit-institution executives range from $20,000 to more than $50,000 per year.

A study of 14 nonprofit contractors handling Federal research and development work revealed that 186 officers, technical directors, and other staff members receive salaries ranging from $23,000 to $45,000 per year.

The 120 top officers of the United Nations receive compensation ranging from almost $19,000 to over $25,000 per year.

Agency career employees are almost as well paid

In 1963 six staff members of the ICC, CAB, and FMC are receiving at least $20,000 per year, the same salary paid to the agency members; 17 staffers are in the $19,000 to $20,000 range; 18 are in the $18,000 to $19,000 range; and 23 are in the $17,000 to $18,000 range. A total of 64 career employees in these 3 agencies alone earn almost as much as the agency members themselves.

In 1962 President Kennedy advocated the principle of comparability between pay for Government career employees and the average pay for private enterprise work at the same levels. The adoption of such principle in the Federal Salary Reform Act of 1962, without concurrent upward adjustment of executive pay, has further aggravated the inequitable salary scales for agency members vis-a-vis career employees.

In fact, proposed legislation (H.R. 7552) provides that grades 15, 16, 17, and 18 career employees can all earn $20,000 per year, clustering them with agency members.

Recent congressional and White House action

The President, in his February 1962 message to Congress relevant to salary reform, recognized the inadequacy of existing salary levels for executive positions. Later the same year the Senate Post Office and Civil Service Committee urged the President "to recommend for consideration at the next session of Congress appropriate increases in Federal executive salaries at all levels." In 1963 the President has recommended salary increases for classified employees ranging from 2- to 26-percent increases. In the meantime, he established in January 1963 a 12-man Advisory Panel on Federal Salary Systems to submit salary recommendations, including the appropriate levels for executive salaries. Chairman Clarence B. Randall of the Advisory Panel submitted its report on June 12, 1963, recommending substantial salary increases for Cabinet members, Supreme Court Justices, Members of Congress, and other high Government officials, including regulatory agency members.

In recommending salary increases for such positions, the Panel concluded as follows: "We are convinced that our top-salary structure no longer provides positive encouragement to men and women of the highest ability, dedication, and conviction about the American way of life to accept Federal appointments in either the executive branch or the judiciary, or to seek Federal elective office with assurance that the financial demands upon them can, in most instances, be met from their salaries."

This report was transmitted to the Congress where it is now under active study by the Senate and House Post Office and Civil Service Committees.

Advisory Panel recommendations for agency members

Annual salaries of $35,000 per year were recommended for agency members and $40,000 per year for agency Chairmen.

Additional financial benefits were recommended, including (1) reimbursement of residential moving costs to and from the seat of government; (2) per diem allowances up to $50 per day; (3) reimbursement for other legitimate expenses incurred in the line of official duty; and (4) separation pay at the termination of service up to a maximum of 3 months' pay.

Actual experiences and reactions of present and past agency members

TAA conducted a special survey of the present and past members of the transportation regulatory agencies to obtain firsthand information about the need for higher compensation. The following comments support corrective action: "Speaking only for myself, financial considerations were almost entirely decisive in my case in leaving the only two important Federal Government positions I ever held."

“Had I not already established over a period of many years free-and-easy access to credit with two of my home State banks, it would have been financially impossible to serve out my terms. *** Like most others, I still have a son preparing for college and I see no way on the current salary level to provide adequately for his higher education."

"I have no hesitancy in saying that many highly competent people known to me have been required to leave the Government service against their basic desires and entirely because of financial and economic considerations."

"I would have stayed in Federal service longer because of the challenge and the broad scope of responsibility; however, when you are losing cash at the rate of $6,000 per annum due to inadequate expense allowance, inadequate protection for your family either in the form of pension or insurance benefits, and on top of that losing 50 to 75 percent of your earning capability or comparable positions, 2 years is about all a person can afford to give of his time."

"As part of a team trying to recruit men for the administrative agencies, I found again and again that highly qualified younger men simply could not serve because of financial considerations. They were usually just starting into the high-earnings portion of their career, they had sizable family obligations, and they were concerned not only with the diminution of income while in Washing ton, but also their loss of position on the promotional ladder in business or their profession."

"In my own case, service was at quite a personal sacrifice. My income was cut substantially and my personal expenses substantially increased. For a man with four young children to pick up and move to Washington, find suitable living accommodations, schools, and in general, to fit into a new community is an expensive process, and, of course, none of this expense is borne by the Government."

"Gave up income and practice netting $25.000, equal to about $35,000 in Washington, extra taxes to date, $5,350. Just had to remortgage house for $4,000.” Comments by informed persons concerned with the problem

Clarence B. Randall, former Chairman of the Advisory Panel, says: “A man may have the highest and most dedicated purposes in the world, but he is also a normal human being. He may have parents to support, a home to buy, children to send to college, and a future to provide for. He must not be asked to make the full sacrifice. We on the outside must share his burden.”

Former President Dwight D. Eisenhower has declared: "If we are to retain in Government service the highly skilled and able civilian employees who contribute so much to the Nation's strength, it is clear that certain revisions are needed in the statutory pay structures for these employees. ****

John W. Mary. Jr., Chairman of the Civil Service Commission. Mays: “Our National Government today is facing the most complex problems that mat has ever experienced. * * * Therefore, the Government must be staffed from Dottom to top with high-quality personnel capable of contributing to solutions of these problems in the national interest.”

Elmer B. Staats. Deputy Director. Bureau of the Budget says: “Executive pay levels must be raised. Higher executive salaries are needed in may pay what is necessary at career ieveis and in order that the Government may command the caliber of mer needed in the sub-Cabinet rever

Anthony F. Arpaia former Chairman of the Interstate Commerce COMIMISKOL says: "We do have big government and we probably do have too much government, but I think what we, as eitizens, shouić do is insure ti at Lowever much government we have. it be good. And if we drive good people out of pubie office we are not only going to have big government, we are going w have taɑ government."

Robert Ramspect, former Congressman art Chairman Civi berrize Costie Sion, and member of the advisory Pau "WE APEC the best possit p

who wil sETTE OF the regulatory agencies jong enough to acgilite the exper knowledge and judgment wijet suei responsibilities require.

TAA support of increased agencj, member compensation

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later that rear To THEAT

Mr. CHAIRMAN. I agree with this sentence that Mr. Staats quoted from the New York Times, "Yet the biggest single cause of waste, in Government or in private industry, is inefficient management."

I agree that that is correct. But even with efficient management, you have to have qualified personnel right along down the line to be able to get the work out. I think the importance of these general schedules should not be overlooked in this salary raise bill, from the standpoint of morale. That is particularly true with the postal service people who quit, the difficulty of recruiting without increases in pay. And I think they are both important.

Mr. STAATS. We are saying that both are important, also, Senator. We have stressed in our statement here today the need for adjustment in these higher salaries not only from the standpoint that this is critical for the management of these programs, but this is the area where the controversy has been directed.

I think comparability and adjustments for the lower grades is well accepted, and I think the problem, if we have a problem, is with these higher salaries.

Senator YARBOROUGH. I have a sentence of my own, Mr. Staats. I am sure I did not originate it. I do not know the source.

"There is no efficient unmanaged business." I think that goes for Government and politics and everything else. You cannot just put a bunch of people in there and say, "Do this," without efficient management. It will not run. It does not matter whether it is Government, politics, business, or a charitable enterprise. There is no unmanaged efficient business.

Mr. STAATS. Which is certainly borne out with all our experience in Government.

Senator YARBOROUGH. I have no further questions.
The CHAIRMAN. Senator Carlson.

Senator CARLSON. Mr. Chairman, I appreciate very much Mr. Staats' coming up here. I would like to announce that Mr. Staats is a former Kansan and we are very proud of his eminent career in Government. It is always a pleasure to work with him and to have his valuable counsel. Again, I say that I think that we are fortunate to have you as Deputy Director of the Budget.

I think I should state to these gentlemen that I left Geneva, Switzerland, at 2:15 yesterday afternoon to appear here this morning. I regret that I did miss the earlier part of your statement. Mr. Jones, what is your title?

Mr. JONES. I am Special Assistant to the Director of the Budget. Senator CARLSON. I would say, knowing your past services, they could not have a better one. I appreciate your being up here. I do hope when we get into executive session on this bill that we will have the privilege of at least having you up here. I think it is probably asking too much to have the Budget Director come up to an executive session, but I do know Mr. Jones will be quite helpful.

This bill is to establish some sort of comparability between private pay and Government pay. I notice, Mr. Staats, that you state that we do not seek now, nor do we ever expect pay for the higher Federal levels which would equal pay for similar levels of responsibility in private enterprise.

Now, Congress has abnorel, comparability. Hon mnet, losc de paix in comparallity, n. view of túas statemen, here. Tha, is yone though

Mr. STAATS. I think I should make this x hì; clearer that I hera The comparability princinte extended to the outras positions.

have our analysis presented comparability dst, onḥ through grade 15.

The Bureau of Labor Statistis sirrers de na: sttømn, to go borond grade 16, so the comparabilitestrieth andhed, gas onḥ to those lorals Above that level, we have attempte, for the Pyrne for career grades. that is grade 16, 17, and 15, to adjus, those in a relationship to the top of grade 15.

And then the executive de scales, of course, are borong, that What I was attempting to say here in this statemen; & this, for the exam tive Day scales, we do not atten,p; to compete at eonate with the salaries paid in the large private organizations ir pri ste mõustrigo But we do fee that this comparability pzmojnie shantë, be stmorly applied through, these career grades, where we car, ohigin, the nages sary data to relate Government responsibilites to those outside of Government..

So that we hart, as Roger Jones mentioneà, a few minutes nga, in this bil, in the House bil, at the lower levels, comparabilia on the 1963 data, roughly. For the intermediate levels, it is abom 1988, But for the higher career grades, we are back at about 1961. So that we do not have strict comparability in the House bili. We under stand that. We appreciate it.

But essentially, what we have before the Congress this your is the bill that was recommended by President Kennedy in his 1964 budget. So our hope is, and our plar, would be, that over a period of time nya would be able to achieve comparability at all of chese enzoor level,

One of the reasons we have not been able to, and I think quite under standably, in the absence of some adjustment in the executive devole, is it has been difficult to move these top career grades up without över lapping considerably the schedules at the executive levels.

Senator CARLSON. Can a member of this committee make a definite statement that from grade 15 and down the compared a rule has been followed!

Mr. STAATS. You cannot say that in this bill; no, sir.

Senator CARLSON. There are various grades where the cor parability differentiates between one grade and another?

Mr. STAATS. I would rather Mr. Jones answered that ques; jon,

Mr. JONES. To take your question, Senator, in the bill that is in the House now, grade 15 has a range from $16,460 to the top longer y step of $21.590. If we had full 1963 comparability, that range would be from $17.750 to $23.060.

Senator CARLSON. Now, then, follow that on down. Do you have a table showing the comparability of the various grados fròm 13 on down?

Mr. JONES. It will be relatively simple to put it in the text. Yo Senator CARLSON. I think it would be helpful if we had it in the record, Mr. Chairman, to see each grade.

The CHAIRMAN. Will you please furnish that for the record?
Mr. JONES. Yes, sir.

(Subsequently, the following information and tables were submitted :)

The Federal comparability pay line consists of a set of rates (one for each grade of a salary schedule) which have been fitted to the average private enterprise rates for the same levels of work and are equated with the fourth step of the Classification Act schedule. The following tables-one for the Classification Act and one for the postal field service-present comparisons of the fourth step rates of current pay schedules (which became effective in January 1964) and of the proposed schedules (H.R. 11049) with hitherto published comparability pay line rates for 1961, 1962, and with a preliminary 1963 pay line also computed at the fourth step rate.

The current rates (schedule II) were derived from the 1961 pay line. Note that rates for GS-4, GS-5, GS-6, and GS-7 under the Classification Act schedule and rates for PFS-1 through PFS-9 are identical with the 1961 pay line. Rates for GS-1, GS-2, and GS-3 are somewhat higher than 1961 comparability because Congress felt that these grades should have larger pay increases than comparability indicated. Rates for GS-8 and above and for PFS-10 and above are below 1961 comparability by increasing amounts as a result of the compression caused by the $20,000 ceiling.

The 1962 pay lines for both the Classification Act and the postal field service are the rates recommended by President Kennedy to be effective in January 1964. The H.R. 11049 rates constitute a revision of the 1962 pay line made by the House committee. Specifically, the committee added 3 percent to the five lowest grades in each pay system and cut back the upper grades by increasing amounts as had been done with the 1961 pay line.

The 1963 pay line was derived on the same basis as the 1962 pay line. It has not been approved by the Bureau of the Budget or the Civil Service Commission. Nor has it been discussed with employee organizations as provided in the Salary Reform Act of 1962. It will be useful as an unofficial, arithmetical basis, however, for indicating the relationship of rates provided by H.R. 11049 with respect to comparability.

It will be noted that the rates provided for the lower grades of both schedules are virtually identical with the 1963 pay line. Rates above GS-5 and PFS-4 are decreasing smaller percentages of comparability. In fact, for GS-12 and above and PFS-15 and above the rates provided by H.R. 11049 are actually below 1961 comparability.

Classification Act-Comparison-4th step rates of current (schedule II) and proposed (H.R. 11049) salary schedules with comparability pay lines for 1961, 1962, 1963

1 In October 1962, incumbents in this grade were given an extra within-grade step worth 3.3 percent. 2 Employees in this grade received no pay increase in January 1964.

* Single rate.