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Postal field service Comparison-4th step rates of current (schedule II) and

proposed (H.R. 11049) salary schedules with comparability pay lines for 1961, 1962, 1963

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

The CHAIRMAN. It is true in the lower grades you do have comparability and it kind of scales on up to grade 15 and stays pretty close all the way, but it gets a little bit larger from 5 up to 15?

Mr. JONES. Yes. Take grade 5, for example. Under the bill grade 5 at the comparability pay line of the fourth step is $5,495. The actual arithmetic on 1963 comparability based on the Bureau of Labor Statistics figures comes out to $5,520.

Now, that is certainly in the ballpark on comparability,

Mr. Staats. Senator Carlson, what happened was, in 1962, in fixing the schedule which went into effect January 1, Congress assumed they would enact another bill last year and raise the top. That did not happen. Therefore, we got some confusion at the top. We got an overlap. Also, it was not possible to adjust the grades going back to about grade 8 to meet the comparability line.

The expectation had been that this would be done last year. It was not done. So, essentially, what we are asking this year is to go back and correct the difficulty that presented itself, because of the $20,000 ceiling last year.

The CHAIRMAN. If you will recall, our report so stated that we would have a bill to correct those inequities which occurred when the January 1964 adjustment went into effect.

Mr. Staats. That is correct.

Senator CARLSON. If Congress approves this bill with the percentages permitted in the bill, will that take care of the comparability for 1964, 1965, or 1967, barring some inflationary period ?

Mr. STAATS. Our expectation would be that in the future recommendations, we could bring all of these schedules through grade 15 up to comparability.

Senator CARLSON. By the enactment of this bill!

Civil Service Commission, the salary range for the principal full-time executives of the larger philanthropic foundations is substantially in excess of the salary scale at the top of the Federal Government.

The salary schedule to be adopted for top positions in all three branches of the Government is a matter for the Congress to decide. The administration gave full consideration to the rates recommended by Mr. Clarence B. Randall and his associates on the President's Advisory Panel on Federal Salary Systems. It was the judgment of the executive branch that the six-level structure recommended by the Panel was sound, but that the top level of $50,000 for members of the Cabinet was not required to establish a reasonable differential between the top of the career service and the successively higher executive levels.

Several proposals to reduce the scale were reviewed carefully. The Bureau of the Budget and the Civil Service Commission recommended a salary of $40,000 for level I, ranging down to $27,500 for level VI. This was the scale which the administration endorsed in testimony before the House committee. While scales as high as those proposed in the Randall Panel report can certainly be justified in terms of the duties and responsibilities of executive positions, the somewhat lower levels we supported would alleviate the financial hardships now imposed on the incumbents of those positions.

The scale which we recommended was reduced by the House committee in its consideration of H.R. 8986, to a range of $35,000 in level I and $26,500 in level VI. These figures have been still further reduced in H.R. 11049. In the most recent action by the House committee, level I is set at $32,500 and level VI falls to $26,000. While such adjustments would significantly improve the Government's competitive position for able men and women, they will not be as successful in solving our problem as more substantial increases. We believe that the salary for level I should be no less than $35,000.

Third, I wish to stress that we are not proposing adjustments in pay which fail to have broad public support. Some 400 leaders of business and industry were asked by the National Civil Service League for recommendations on the salary levels for the Cabinet and the Congress. They replied overwhelmingly in support of substantial increases. Three hundred thirty-five suggested Cabinet salaries between $35,000 and $50,000. Only six suggested no change in Cabinet pay. Three hundred and five suggested congressional salaries between $30,000 and $40,000. Only 33 suggested no change in congressional pay. The results of this poll have been made available to the committee.

There has also been a revealing and important degree of editorial support not only from the major metropolitan newspapers such as the New York Times, in its editorial on Thursday, April 30, but also from the newspapers of our smaller cities across the country. Much of this evidence of public endorsement has been inserted in the Congressional Record. I should like to quote one paragraph from the recent editorial in the New York Times:

Those who oppose waste and extravagance in Government spending argue that raising the level of Federal salaries would be unjustified and inequitable. Yet the biggest single cause of waste, in Government or in private industry, is inefficient management. The Nation has been fortunate that so many skilled

people have been willing to accept the financial penalties involved in Government service. But with the pay scales and fringe benefits available to high caliber personnel in private industry constantly rising, the Government will find it increasingly difficult to attract and keep executives with the talent and the training required for formulating and carrying out policy.

We are confident that the American people will support action by the Congress now to adjust Federal salaries in such a way as once again to give top Federal officers and career employees pay scales much more closely related to the levels of duties required of them.

In closing, may I point out that the President's support for legislative action on pay adjustments for all three branches of the Government at this session of the Congress was firmly expressed in his budget for the fiscal year 1965. In that budget, $544 million is included for this purpose. H.R. 11049, reported from the House committee last week, is estimated to cost $533 million, taking into account the absorption of costs required by the bill's language. This will bring the net cost of the bill well within the budgeted amount.

The Bureau of the Budget and the Civil Service Commission stand ready to supply any additional factual information in our possession which the committee may wish to have.

Now, Mr. Chairman, since this statement was prepared, it occurred to me that it might be well to have in the record a listing of the President's approval in his recommendation of the executive pay scales for levels I, II and III, and with your permission, I would like to have that added as an attachment to my statement.

The CHAIRMAN. It is so ordered.
(The document referred to follows:)



Level I, $32,500 (Cabinet members only)
Secretary of State.
Secretary of the Treasury.
Secretary of Defense.
Attorney General.
Postmaster General.
Secretary of the Interior.
Secretary of Agriculture.
Secretary of Commerce.
Secretary of Labor.
Secretary of Health, Education, and Welfare.

Level II, $30,000
Deputy Secretary of Defense.
Under Secretary of State.
Administrator, Agency for International Development.
Administrator, Housing and Home Finance Agency.
Administrator, National Aeronautics and Space Administration.
Director, Bureau of the Budget.
Chairman, Council of Economic Advisers.
Director of Central Intelligence.
Director, Office of Science and Technology.
Chairman, Board of Governors, Federal Reserve System.
Chairman, Atomic Energy Commission.
Director, Federal Bureau of Investigation-so long as the position is held ly the

present incumbent. Director, U.S. Arms Control and Disarmament Agency. Director, U.S. Information Agency.


Level III, $29,000
Deputy Attorney General.
Deputy Postmaster General.
Under Secretary of Agriculture.
Under Secretary of Commerce.
Under Secretary of Commerce for Transportation.
Under Secretary of Health, Education, and Welfare.
Under Secretary of the Interior.
Under Secretary of Labor.
Under Secretary of State, Political Affairs.
Under Secretary of the Treasury.
Under Secretary of the Treasury for Monetary Affairs.
Secretary of the Air Force.
Secretary of the Army.
Secretary of the Navy.
Administrator of the Federal Aviation Agency.
Administrator of General Services.
Administrator of the Small Business Administration.
Administrator of Veterans Affairs.
Deputy Administrator, Agency for International Development.
Chairman, Civil Aeronautics Board.
Chairman, U.S. Civil Service Commission.
Chairman, Federal Communications Commission.
Chairman, Board of Directors, Federal Deposit Insurance Corporation.
Chairman, Federal Home Loan Bank Board.
Chairman, Federal Power Commission.
Chairman, Federal Trade Commission.
Chairman, Interstate Commerce Commission.
Chairman, National Labor Relations Board.
Chairman, Securities and Exchange Commission.
Chairman, Board of Directors of the Tennessee Valley Authority.
Commissioner of Internal Revenue.
Comptroller of the Currency.
Deputy Administrator of the Housing and Home Finance Agency.
Deputy Administrator, National Aeronautics and Space Administration.
Deputy Director, Bureau of the Budget.
Deputy Director of Central Intelligence.
Associate Director, Federal Bureau of Investigation, so long as the position is

held by the present incumbent.
Director of Defense Research and Engineering, Department of Defense.
Director, National Science Foundation.
Director, Office of Emergency Planning.
Director of the Peace Corps.
President, Export-Import Bank of Washington.

Mr. Staats. That concludes my statement, Mr. Chairman.
Mr. Jones and I will be glad to attempt to answer any questions

you may have.

The CHAIRMAN. Do you have any questions, Senator Fong?
Senator Fong. Yes.

Mr. Staats, you stated that under H.R. 8986—was that the bill that was defeated in the house?

Mr. STAATS. That is correct.

Senator Fong. You stated that the range was from $35,000 in level I and $26,500 in level VI, and that was far below the amount which your Budget Bureau recommended.

Mr. STAATS. We recommended initially $40,000 for the Cabinet pay scale and then subsequently we endorsed the $35,000 schedule which was in the House bill that was defeated.

Senator Fong. And the Randall Committee recommended $50,000; is that correct?

Mr. STAATS. That is correct.

Senator FONG. So the Randall Committee recommended $50,000, your budget recommended $40,000, and H.R. 8986 approved $35,000, but the present bill now approves $32,500 ?

Mr. STAATS. That is correct.

Senator Fong. Now, because of the amount of $32,500 which has been set here in level I, you stated that this depresses the wage scale which you are able to offer to the higher categories in executive positions.

Mr. STAATS. It not only has the effect of depressing the schedules and compressing intervals, among these six levels, but it also brings the lowest level of executive schedule down so close to the top of the career grade that it does not permit of very many future adjustments, until you have the same kind of overlap that has troubled the Congress and has troubled the President in the past.

So that you have all three effects from the change in the schedule in the House bill. In other words, you get a lower schedule at the top, you get a greater compression of the intervals between the six levels of executive scale, and you get a lower level in relation to the top of the career level. So all three of these things happen when compression takes place,

Senator Fong. According to H.R. 11049 as testified by Mr. Macy the other day, from GS-6 to GS-15, it has not followed the comparability principle as we find it when we look at the amount of pay given in private industry for 1963, do we?

In other words, as I understand it, GS-6 to GS-15 is only based on comparability for 1961; is that correct?

Mr. STAATS. That is correct. Senator Fong. Whereas for GS-1 to GS-5, inclusive, we have the 1963 comparability figures.

Mr. STAATS. 1962.
Mr. JONES. It is 1963.
Mr. STAATS. I am sorry. It is 1963.

Senator Fong. So, from GS-1 to GS-5, inclusive, we follow comparability up to 1963, whereas when we take in GS-6 to GS-15, we are about 2 years behind in comparability.

Mr. Jones. Not quite, Senator Fong. The middle grades are roughly 1962 comparability, and the higher grades still are back at about the 1961 level.

Senator FONG. I see. Will you be able to furnish the committee with what the figures for GS-6 to GS-15 would be, if we followed the 1963 level?

Mr. Staats. We can give that to you, approximately, yes. On the 1963 level ?

Senator Fong. Yes.
Mr. STAATS. Through all grades?
Senator Fong. All grades. Have you got the figures with you?

Mr. JONES. I think I have, sir. They are on a rough worksheet, but I can give the 1963 comparability pay line. Do you want these figures from pay line at the fourth step or on the entrance step?

Senator Fong. You can give it to us on the salary cost.

Mr. JONES. What I have here are the figures which would relate to each one of the grades. The average salary in the grades now under the Classification Act is at the fourth step of the grade, and on this

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