[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]




 
OPM'S 2007 BUDGET AND NEW STRATEGIC AND OPERATIONAL PLAN: A DISCUSSION 
                         WITH THE OPM DIRECTOR

=======================================================================

                                HEARING

                               before the

                 SUBCOMMITTEE ON THE FEDERAL WORKFORCE
                        AND AGENCY ORGANIZATION

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 28, 2006

                               __________

                           Serial No. 109-141

                               __________

       Printed for the use of the Committee on Government Reform


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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut       HENRY A. WAXMAN, California
DAN BURTON, Indiana                  TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota             CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana              ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio           DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania    DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee       DIANE E. WATSON, California
CANDICE S. MILLER, Michigan          STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio              CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California          LINDA T. SANCHEZ, California
JON C. PORTER, Nevada                C.A. DUTCH RUPPERSBERGER, Maryland
KENNY MARCHANT, Texas                BRIAN HIGGINS, New York
LYNN A. WESTMORELAND, Georgia        ELEANOR HOLMES NORTON, District of 
PATRICK T. McHENRY, North Carolina       Columbia
CHARLES W. DENT, Pennsylvania                    ------
VIRGINIA FOXX, North Carolina        BERNARD SANDERS, Vermont 
JEAN SCHMIDT, Ohio                       (Independent)
------ ------

                      David Marin, Staff Director
                       Teresa Austin, Chief Clerk
          Phil Barnett, Minority Chief of Staff/Chief Counsel

     Subcommittee on the Federal Workforce and Agency Organization

                    JON C. PORTER, Nevada, Chairman
JOHN L. MICA, Florida                DANNY K. DAVIS, Illinois
TOM DAVIS, Virginia                  MAJOR R. OWENS, New York
DARRELL E. ISSA, California          ELEANOR HOLMES NORTON, District of 
KENNY MARCHANT, Texas                    Columbia
PATRICK T. McHENRY, North Carolina   ELIJAH E. CUMMINGS, Maryland
JEAN SCHMIDT, Ohio                   CHRIS VAN HOLLEN, Maryland

                               Ex Officio
                      HENRY A. WAXMAN, California

                     Ron Martinson, Staff Director
                  Chad Bungard, Deputy Staff Director
                           Alex Cooper, Clerk
            Tania Shand, Minority Professional Staff Member


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on March 28, 2006...................................     1
Statement of:
    Springer, Linda M., Director, Office of Personnel Management.    11
Letters, statements, etc., submitted for the record by:
    Davis, Hon. Danny K., a Representative in Congress from the 
      State of Illinois, prepared statement of...................     8
    Porter, Hon. Jon C., a Representative in Congress from the 
      State of Nevada, prepared statement of.....................     4
    Springer, Linda M., Director, Office of Personnel Management, 
      prepared statement of......................................    16


OPM'S 2007 BUDGET AND NEW STRATEGIC AND OPERATIONAL PLAN: A DISCUSSION 
                         WITH THE OPM DIRECTOR

                              ----------                              


                        TUESDAY, MARCH 28, 2006

                  House of Representatives,
      Subcommittee on Federal Workforce and Agency 
                                      Organization,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10 a.m., in 
room 2154, Rayburn House Office Building, Hon. Jon C. Porter 
(chairman of the subcommittee) presiding.
    Present: Representatives Porter, Davis of Virginia, Davis 
of Illinois, Norton, Cummings, and Van Hollen.
    Staff present: Ronald Martinson, staff director; Chad 
Bungard, deputy staff director/chief counsel; Chad 
Christofferson, legislative assistant; Patrick Jennings, OPM 
detailee/senior counsel; Tania Shand, minority professional 
staff member; and Teresa Coufal, minority assistant clerk.
    Mr. Porter. Good morning. I'd like to bring the meeting to 
order.
    Linda, you were supposed to bring coffee and doughnuts for 
everyone in the audience today.
    Ms. Springer. They're a little late.
    Mr. Porter. Just checking.
    Again, thank you all for being here today. A quorum is 
present. The Subcommittee on Federal Workforce and Agency 
Organization will come to order. Again, Director Springer, 
thank you for being here today and for your help and for all 
that you have accomplished in the last year.
    Today I know you're here to talk about your 2007 budget 
request from the President and the release of an aggressive, 
Strategic and Operational Plan for OPM by yourself.
    The time is right to examine the OPM's goals and its 
progress of ongoing initiatives. Let me be the first to say 
that I'm quite impressed with OPM's new strategic and 
operational plan for the next 5 years. Quite frankly, it takes 
a lot of guts to move a Federal agency in this direction with a 
to-do list that's pretty substantial. I am very impressed, and 
I realize that you're moving OPM into being one of the model 
Federal agencies here in D.C.
    So I appreciate it.
    The Director has committed OPM to specific goals, with 
target dates for each goal. The plan is a concise roadmap for 
accountability. It's a vast improvement over OPM's old 
strategic plan. To illustrate, let me contrast the previous 
plan with the new plan by focusing on similar objectives with 
regard to hiring. OPM's old strategic plan stated the following 
objections with regard to hiring: ``increase the effectiveness 
and efficiency of the Federal hiring process and make Federal 
employment attractive to high quality applicants of diverse 
backgrounds.'' This is not really very informative, and the 
page of descriptive text that follows doesn't clarify the 
statement. Again, it's very broad. Contrast the statement I 
have just read with the example from OPM's new plan, decrease 
hiring--pardon me, ``Decrease hiring decision timeframes to 45 
days from the closing date of job announcement to date of offer 
for 50 percent of hires by the end of fiscal year 2006, and 
increasing by 10 percent per year thereafter to 90 percent in 
2010.''
    That's very concise, very specific, and that's something 
we're not accustomed to, so I appreciate that.
    And there are 170 of these specific goals in the plan. 
Again, it takes a lot of courage to publish a plan like that in 
Washington and I commend you, Director Springer, for your 
efforts and hope that you can complete all of your goals on 
time. However, I suspect some of these target dates may be 
adjusted as the year goes on. But that's to be expected. I'm 
willing to give you some room in recognition of the risk you 
have taken to commit OPM to specific target dates.
    But turning to the budget report, the President requests a 
budget allotment of $256 million for OPM, an increase of $17.2 
million for OPM's fiscal year 2006 post-recession budget 
allocation. The requested $17.2 million increase consists of 
$26.7 million for the new OPM initiatives, primarily OPM's 
Retirement Systems Modernization Initiative, and $13.7 million 
in offsets. OPM's budget allocation also includes $17.7 million 
for OPM's Office of Inspector General.
    I'm pleased that the President has allocated new funding to 
move forward with the Retirement Systems Modernization 
Initiative. Last year I signed a letter to you, Director, 
expressing my experience about the reports of delays with the 
finalization of retirement claims. As you indicated in your 
response to that letter, the Retirement Systems Modernization 
effort promises to bring needed improvements to the speed and 
accuracy of retirement claims processing, and should greatly 
improve OPM's customer service for Federal retirees.
    I am concerned about some of the program reductions that 
OPM is absorbing. Although the President's 2007 budget requests 
a budget increase for OPM, primarily for retirement systems 
modernization, I think we should consider the obvious question, 
what is being cut?
    The fine print of OPM's budget mentions that OPM will be 
observing $13.7 million in program offsets. This may seem like 
a tiny amount in budget terms, but when considering the 
enormity of the Federal budget, it's all too easy to lose sight 
of the impact. However, I think the potential offsets that OPM 
may be forced to absorb are not insignificant. I would like to 
have more information about where OPM plans to absorb these 
reductions.
    In this regard, I think it's important to realize the 
Federal work force is facing an unprecedented period of change. 
As noted, the Federal work force will experience a ``retirement 
tsunami'' caused by the retirement of the Baby Boom generation.
    The Federal Government must be able to recruit and retain 
new employees in an increasingly competitive technologically 
innovative environment. You must have sufficient funds and 
resources to allow you to continue to provide human resources 
and leadership in this environment.
    I look forward to working with the congressional 
appropriators to assure that OPM receives the funds it needs to 
accomplish its mission. In addition, the budget allocation for 
your Office of Inspector General is facing a $452,000 cut. 
Again, this may seem like a tiny amount in budget terms. The 
Inspector General, however, achieves an extraordinary return 
with the funds he has available.
    In 2005, the Inspector General reported that they recovered 
approximately $122 million. This amount includes $54.6 million 
recovered for the Federal Employees Health Benefits Plan from 
the civil settlement of a case involving allegations of false 
claims and kickback charges against a company that managed the 
pharmacy benefit programs of several Federal Employees Health 
Benefits plan carriers.
    The Inspector General recovered these funds using an 
operational budget of approximately $17.9 million after an 
adjustment for certain expenses. That is a return on investment 
of approximately $8 for each dollar budgeted. If that rate is 
an indicator, a $452,000 cut means the Inspector General will 
recover approximately $3.6 million less in fiscal year 2007 
than he otherwise would have recovered.
    Although the Inspector General is not here today to answer 
questions, I think that amount deserves further consideration.
    With that said, Director Springer, thank you again for 
being here this morning. I look forward to our discussions. And 
I'd like to recognize our ranking minority member, Mr. Danny 
Davis. Thank you for being here.
    [The prepared statement of Hon. Jon C. Porter follows:]

    [GRAPHIC] [TIFF OMITTED] T7513.001
    
    [GRAPHIC] [TIFF OMITTED] T7513.002
    
    Mr. Davis of Illinois. Thank you very much, Mr. Chairman. I 
want to thank you for holding this hearing today. It gives us 
the opportunity to discuss the impacts of the fiscal year 2007 
budget on Federal workers.
    The proposed 2.2 percent pay raise is markedly lower than 
the raises Congress has enacted for the past several years. 
Federal pay raises have averaged more than 3 percent since 
1999. Additionally, Section 836A in the appendix of the 
President's budget proposes that, in addition to annual and 
locality payments, the 2.2 percent pay raise should include 
special pay rate. Federal white collar employees receive an 
annual pay adjustment and the locality-based comparability 
payment in January of each year. Under the administration's 
plan, a special pay adjustment which would go only to employees 
in hard-to-fill jobs or locations would be included in the pay 
formula. Currently, Federal agencies must fund higher pay rates 
for hard-to-fill jobs from the existing personnel budgets 
rather than from the overall pay raise that Congress approves 
each year. This action, if taken, would diminish the amount of 
money available for annual and locality pay adjustments.
    The President's budget also proposes $3.4 billion in 
savings from the Federal Employees Health Benefits Program over 
the next 10 years. The savings reflects a change in FEHB that 
would allow the governmentwide fee-for-service plan offered by 
Blue Cross/Blue Shield the ability to offer more than two 
levels of benefits. One likely result of expanding the 
governmentwide plan to allow for three levels of benefits is 
that the governmentwide plan would include a high deductible 
health plan that is coupled with tax advantaged health savings 
accounts [HSAs]. And in 2005, the FEHBP began offering such 
HDHP options in employee-organization sponsored plans and 
comprehensive medical plans which are not governmentwide.
    The Government Accountability Office [GAO], recently issued 
a report evaluating the experience of the 14 FEHBP HDHPs in the 
FEHBP. The reports find and suggest that Congress should 
proceed with caution and not expand the use of HDHPs until the 
impact of the Federal Employees Health Benefits Plan is better 
understood.
    Finally, the administration continues its call to grant all 
agencies the personnel flexibilities received by the Department 
of Homeland Security and the Department of Defense in 2002 and 
2003 respectively. There are serious concerns regarding the 
extension of these flexibilities throughout the Federal 
Government. One of the main concerns regarding the extension of 
these personnel flexibilities is that to date there is an 
insufficient basis for assessing the effectiveness.
    Personnel flexibilities granted to DHS and DOD are being 
challenged in the courts, thereby delaying the implementation 
and evaluation of these new systems. It is therefore impossible 
for Congress to measure and to evaluate their impact on the 
work force and to understand the cost associated with the 
design, implementation and training related to these new 
systems.
    I have serious concerns about the administration's 
recommendations and of course look forward to Director Springer 
addressing them. Again, I thank you for having this hearing and 
yield back the balance of my time.
    [The prepared statement of Hon. Danny K. Davis follows:]

    [GRAPHIC] [TIFF OMITTED] T7513.003
    
    Mr. Porter. Thank you, Mr. Davis. I do have a question. You 
handled all those acronyms quite well in one sentence. You did 
really well. Thank you for your opening.
    Congresswoman, do have you an opening statement this 
morning?
    Ms. Norton. I very much appreciate this hearing, Mr. 
Chairman, and the collegial way in which you run this 
subcommittee. And I want to welcome Director Springer. I'm 
pleased to hear what she has to say today, and I feel for her 
because I think she has come to the agency at a problematic 
time; when many of the issues that are most troublesome were 
decided before Ms. Springer even got there. It's her job to 
somehow take these issues and grapple with them and make them 
work, and some of them present huge challenges that would be 
very difficult to deal with.
    I do want to say a word on the pay raise. Pay raise has 
been consistently controversial in Congress. Every time it 
equalizes the pay between the civilian and the military work 
force, there are very good reasons; particularly after 
September 11th, the distinction is very much without a 
difference. So this time, everybody's pay raise is less than it 
should be. There's a saying, I'm sorry to have taken all of you 
all down with us, but it looks like we took the military down 
with us.
    Since the administration got the message that Congress is 
not going to abide a disparity in pay between people who all 
serve the Federal Government, so everybody is supposed to take 
less than they are due. Let's see how the appropriators deal 
with that one.
    For this committee, Ms. Springer's tenure thrusts her in 
the middle of a set of huge experiments that one might have 
expected to be done dose by dose, and already many of the 
issues that the committee pointed out have surfaced the last 
place the Federal Government wants them to surface, and that is 
in the courts. Entire sections of the very controversial 
personnel and pay changes are now being held up in the court. 
Collective bargaining, personnel flexibilities.
    The one thing that would seem to be wise would be for the 
Federal Government not to extend these major changes in the 
Civil Service system until they have had an opportunity to see 
whether they are workable at all. Not whether they work but 
whether they are workable at all.
    Already, more than half the work force is involved because 
we have the Homeland Security Department, and we have the 
Department of Defense. That's a very big experiment. So one 
wants to figure out what works and what doesn't. It's not as if 
one has a small cohort and we're ready to go further. In fact, 
on the contrary. What we have is more than half the work force 
being subjected to personnel changes, personnel and pay changes 
of a kind that have not taken place in 100 years, and they're 
in the courts now. Some of them are so bereft of due process 
that I predict that they'll be in the courts for some time.
    The administration forgot one cardinal principle, that is 
the difference between a private work force and a government 
work force, and yes, I'm sad to say, perhaps, although, I think 
there is a very good reason for it, that due process does 
attach to certain parts of government employment that would not 
be the case if one worked for Google. And in many ways, these 
reforms were treated as if, in fact, everybody in the Defense 
Department, from the worker who perhaps is least important to 
the mission of the Department all the way to the very top, 
should be treated in the same way, with the same personnel and 
pay flexibilities, with collective bargaining thrown overboard 
so that there was no way in any real sense to protect a worker, 
at least if we are to understand the decisions of the courts 
thus far.
    The committee was one that, after September 11th, there 
needed to be changes in certain parts of the personnel system 
and with respect to certain personnel of the Federal 
Government. This is a moment, it seems to me, particularly 
since the matter has wound up in court, for us to look very 
seriously at what has happened and for OPM to think very 
seriously before proceeding on any next steps.
    Finally, Mr. Chairman, here we go again with health benefit 
plans proposed to be extended. There have been some experiments 
here, and experiments that confirm the obvious, that the people 
who take advantage of these plans are young, healthy and high 
paid. And I say to you, Madam Director, that is not a 
characterization of the Federal work force. It is what, almost 
3 million person work force, and no one would say that it was 
like a high tech work force, young folks who might in the high 
tech parts of Virginia want to take advantage of such a change, 
so that in looking at a health benefits plan, we are obligated 
to look at the entire work force, and I must say that what the 
GAO tells us so far is that it would be--what the GAO has had 
to tell us thus far seems to indicate that we would move at our 
own peril to spread, or should I say at the peril of Federal 
employees, to spread health benefit accounts through this kind 
of a work force.
    It is a work force where people are given pensions and 
benefits designed to keep them on the job for long periods of 
time. That's another difference between the Federal work force 
and other work forces. The Federal Government isn't doing such 
a good job at that today. Not only are we not able to recruit 
people; we train people and we find that, particularly with the 
contracting sector right out there ready to pay them more, they 
are gone. This puts the Federal Government, particularly with 
its missions, its multiple missions after September 11th, not 
to mention its usual missions, at a point when it should be 
rethinking personnel policy, trying to reinforce what personnel 
it has, particularly as the Baby Boom generation opts very 
often not even to wait for retirement but to go with early 
retirement and then to go someplace else and make money in the 
private sector.
    It is an issue that got the attention of this committee 
that is so serious, that this committee in this very room 
before Ms. Springer came had a joint committee of the House and 
the Senate, so concerned are we that there are no natural 
reasons for people to come to the Federal work force as there 
were before.
    In many ways, we need these people, particularly people in 
certain categories, more than ever, and the Federal Government 
is not taking--making steps that would encourage people not 
only to come but to stay. So I have very serious personnel 
concerns, some of them above your pay grade, but certainly, Ms. 
Springer, some of them within your purview, and I very much 
look forward to hearing your testimony today.
    Mr. Porter. Thank you very much.
    Mr. Van Hollen, do you have anything you'd like to add this 
morning?
    Mr. Van Hollen. Thank you, Mr. Chairman. Looking forward to 
the testimony.
    Mr. Porter. We need to take care of some procedural 
matters. I ask unanimous consent that all Members have 5 
legislative days to submit written statements and questions for 
the hearing record. Any answers to written questions provided 
by the witness will also be included in the record. Without 
objection, so ordered.
    I'll also ask unanimous consent that all exhibits, 
documents, other materials referred to by Members and witnesses 
may be included in the hearing record, that all Members be 
permitted to revise and extend their remarks. Without 
objection, so ordered.
    It's also the practice of the subcommittee to administer 
the oath to all witnesses. I'd ask that you now stand.
    [Witness sworn].
    Mr. Porter. Let the record reflect the witness has answered 
in the affirmative.
    Our first panel today, and our only panel here, we'll hear 
from Director Linda Springer, the Director of the Office of 
Personnel Management. She has been with us before and it's 
always a privilege to have you here, and we appreciate it very 
much. Ms. Springer, if you'd like to proceed with your opening 
comments.

 STATEMENT OF LINDA M. SPRINGER, DIRECTOR, OFFICE OF PERSONNEL 
                           MANAGEMENT

    Ms. Springer. Thank you, Mr. Chairman. What I'd like to do 
is make my comments with the aid of some charts and we'll 
provide copies of those charts to the members. I would ask that 
the full text of my written statement and the attachments be 
submitted for the record.
    The first chart is actually just the cover of the plan, but 
by way of openers, I'd just like to say that as you mentioned 
earlier, Mr. Chairman, this is a different plan. It has 170 
actual to-dos. We have given complete visibility into the 
operations of OPM, what we intend to do over the course of this 
plan period, and each of those to-dos has a due date, which 
makes it very unique. The whole world can see what we're trying 
to do, when we expect to have it done, and they can hold us 
accountable.
    This is accountability taken to a degree that I think is 
rare, certainly in the Federal Government. So we are very proud 
of this plan. And the starting point for it obviously was to 
redefine our mission statement.
    If you'll see on the next chart, essentially our job is to 
ensure that----
    Mr. Porter. Excuse me, Director. Traditionally we hold 
testimony to 5 minutes, but please, know if you need extra 
time.
    Ms. Springer. Thank you, sir. Appreciate that.
    The mission is to ensure that the Federal Government has an 
effective civilian work force. That is OPM's job. It's a big 
job. We have nearly 2 million men and women in the Federal work 
force. Most of those are outside of Washington, DC. So it's a 
worldwide effort, and it stems from the front end with 
background investigations, all the way through the retirement 
administration process. So if OPM does its job well, every 
other agency will be able to serve the American people better 
for it.
    Now we have developed this plan at the same time that we 
were developing our 2007 budget. So there's great consistency 
and harmony between the two. This next chart shows the budget 
priorities that were presented in the congressional budget 
justification, and there are 11 of them, and they're all very 
important to us, and it's exactly the same, and we took this 
right out of the CBJ.
    Each of those has to-dos in this plan; 53 of the 170 are 
lined up with these 11 priorities that we presented in the 
budget. And in the attachment to my statement is a page for 
each of these 11 with some very specific to-dos, and, as I 
said, with due dates for each of them. So you can take a look 
at those, and you'll get an idea as to how we're going to make 
these things happen.
    There are some highlights I want to give you here. On the 
retirement benefits administration, there are 2 million people, 
over 2 million people now covered by our retirement 
administration process. That includes members of the 
legislative branch, includes all of you when you get to the 
point of needing a retirement calculation. So we have a strong 
common bond in making sure OPM does a good job.
    When it comes to health benefits, we have in the 
neighborhood of 8 million people covered by the FEHBP. That 
includes present and former employees and dependents. When it 
comes to things like the FEHBP, we're looking at ways to deal 
with health information technology. I know, Mr. Chairman, 
that's an important effort which we are grateful for your 
interest in that and looking forward to the hearing on that, 
but we're very involved there and share your interest in it.
    Attracting employees for the future. That is a very, very 
important part of making sure that we continue to have an 
effective civilian work force in the future. Appendix E of our 
plan deals with a concept and an approach to that called career 
patterns. Again, I would direct your attention to that.
    In addition to all those things, we want to make sure OPM's 
management makes it a model of performance across the Federal 
Government. So those budget priorities again are really where 
our focus will be not just in 2007, but beyond.
    On the next chart, you will see a snapshot again consistent 
with what we've already given you in our CBJ of our 2007 
appropriations request. I know the print is small, and there is 
a copy of this, I believe, in the material that you have 
received.
    Just to highlight it, the total request is for just short 
of $37 billion; 99 percent of that is for trust funds. It's 
mandatory. So it's only about 1 percent of what we request that 
is actually discretionary and is used to run the operation of 
OPM. That discretionary portion shows an increase this year of 
roughly $17 billion. $17 million. That's the net of a $27 
million increase for a new retirement modernization project, 
which I'll explain in a minute, offset by a decrease of roughly 
10 million.
    That difference, that decrease, that offset, a portion of 
it is related to staffing. We're going to be running with 26 
less people. Doesn't sound like a lot in the Federal 
Government, but that amounts to several million dollars. We're 
going to be holding back and delaying some other systems 
enhancements. We're going to be cutting back on some contractor 
support. And those are the three main areas that will allow us 
to cut back and to fund a portion in effect of that retirement 
modernization project.
    So this year, we're showing an increase of roughly $17 
million in that small 1 percent of the total of our budget 
request for 2007.
    I'd like to go to the next page, the next chart, and talk a 
minute about this retirement systems modernization project. 
Again, the reason why I'm zeroing in on this is twofold. One, 
it's the one area where we've asked for more money in 2007, and 
the second thing is, everybody in this room who works for the 
Federal Government cares about this if we're going to retire 
some day, or at least have a--leave with a vested retirement 
benefit.
    OPM does this process manually today. We take too long. We 
got a letter from many of you late last year, signed by nine 
members, many of whom are present today, saying that we've got 
to do a better job. We can't have delays of 90 days; we can't 
be putting out benefits for 2, 3, 4 months until the 
calculation is final with benefits that have a hair cut of 15, 
20, 35 percent until we get all the information to do our 
calculation.
    Part of that is a function of getting information from the 
agencies. Part of it is a function of the fact we're doing 
these calculations manually. You see this drawer over here. I'm 
doing a little show-and-tell here, and I hope I don't abuse my 
opportunity, but this is a sample of what our people have to 
work with.
    We have 28,000 file cabinets; five drawers in each cabinet; 
144,000 of these drawers, packed, that our people have to go 
through to get personnel records when someone retires and then 
do a calculation manually. It is a shameful way of doing this.
    If we took all the drawers for our retirement office and 
put them end to end, starting in this room, we could go all the 
way to Baltimore and come back again and not run out of 
drawers. That's how bad it is.
    Mr. Porter. Excuse me, Director. That would be just Ron 
Martinson's file, right?
    Ms. Springer. Some files are bigger than others.
    And looking ahead to the increased number of people that 
are going to be retiring, this is not a sustainable situation. 
So we're doing two things: In the short run, we've asked for 
some money in this budget, a little bit, about a million plus 
to bring back some people who are experienced. We're working on 
some process refinements so we have the more experienced people 
doing the more complicated retirement calculations, the easier 
ones with the newer people. We're working with agencies on a 
pilot to make sure that they can get us information maybe even 
before someone retires so we can get a head start.
    Those are all just bandaids until we can get this new 
system. This year, we're asking for about $27 million. That's 
this year's installment. OPM had made an attempt in the past to 
try and come up with a new system. They tried to build one from 
scratch. It didn't work. There was some money left after. We 
put it in the bank, in effect. We were able to use that, plus 
this, plus some other money that we think we will be able to 
get a good start on getting this system in place. We hope by 
2009 that we can have the new system up and running.
    In the meantime, we have been making some progress through 
some of the basic process improvements in getting that wait 
time down to getting a final accurate payment. But the ultimate 
answer, that is, we've got to have this new system. We can't 
keep using this file system that we have today. It's just not 
going to work.
    Now let's go to the next chart, if you can. The question 
is, it's great to have a plan, all these to-dos, visibility, 
but it doesn't mean anything if you can't get these things 
done. We believe the American people and all of you expect us 
to get things done.
    So the question is, how do we do that? One of the things--
we have it in a chart, and we've given you a copy--is that we 
have put together a chronological list. Now this is the 2007 
page, but I have this starting from this month right on forward 
through the whole 5 years of this plan, is a chart that 
essentially says, for each month, here's what we've got to get 
done; next to that, not in your copy but in my copy, who at OPM 
is responsible; and next to that is a column that says the date 
that it was completed.
    And this is my score card to make sure that everything gets 
done, everyone knows what they need to get done, so it takes 
this plan and puts it onto a tracking sheet. Now beyond that, 
each member of the SES at OPM has these goals in their 
performance contract. That means that every executive at OPM 
has their pay on the line for getting these things done.
    We can do that in the SES. We can't do that through the 
rest of the organization, as you know, but we can do it in the 
SES. That means executive comp at OPM is tied to achieving the 
goals in this plan. So that is accountability.
    I have reviewed this with Comptroller General Walker, he 
said it's really pretty impressive to go from a plan to a 
tracking sheet to how people are actually paid in their SES 
performance contracts.
    Beyond that, it's not just a stick issue; there's a carrot 
to this. We're going to reward people. We're going to 
congratulate them. We have all kinds of ideas to keep the 
momentum going as we achieve these goals.
    There's also obviously public pressure because people have 
this plan; it's visible. No one likes to be embarrassed. I 
certainly don't, and neither do the people in OPM. So they're 
excited about getting these goals done and showing that this 
kind of system can work.
    Just two more quick charts. That's the second half of 2007. 
We couldn't get it all in 1 year; there are so many goals.
    Next to the last chart shows two areas that I want to 
highlight for you that relate to legislative proposals that are 
in the President's budget. One is, there's a fix in there that 
we hope you will take up that relates to a penalty in effect 
for people who want to stay on in their government job on a 
part-time basis after they've retired. We have many people, and 
I go around the country; I have been to a dozen cities, talked 
to the Federal executive boards. People don't want to go from 
working full-time to no time, in many cases. They'd like to 
stay with the Federal Government. We'd like to get the benefit 
of their knowledge and that knowledge transfer. But they can't 
do it if they're in the CSRS without a penalty to their 
pension. That's a bad answer.
    So there is in the President's budget a fix for that. We 
hope that you will be able to take that up and pass that.
    The second thing is that we are looking to expand health 
care options. I understand that there's some concern about 
that, but we believe that the Blue--first of all, half the 
people are under the Blue Cross/Blue Shield system, and so we 
believe that those people deserve the same choices that other 
people in the private sector have, and the Blues offer these 
type of arrangements in the private sector.
    We believe people in the Blues who really want to stay with 
Blue Cross and Blue Shield as they have for decades deserve to 
have that option. So we are looking to expand to have that 
third option.
    So I just want to finish up by saying as it says on this 
last chart, we view this as a partnership. This is the largest 
font size I could find to fit on the chart.
    But we believe that our success is tied to the partnership 
that we have with you. We can only accomplish the things that 
are in this plan if we get the funding for them. We believe 
that it is a tight budget year. It will be a challenge for us, 
but we believe that the amount that is in the President's 
budget will allow us to do the things that are under this plan. 
We think they're the right things to do, and we believe that we 
can get that done.
    So, again, we look at it as a partnership, and we're glad 
to have the opportunity, certainly I am, to visit with you 
today, and we'll make ourselves available in the future as 
well.
    Thank you, Mr. Chairman.
    [The prepared statement of Ms. Springer follows:]

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    Mr. Porter. Thank you very much. Before I get into the 
question-and-answer period, Mr. Cummings, would you like any 
opening comments today?
    Mr. Cummings. No, Mr. Chairman.
    Mr. Porter. Thank you. Very impressive. I appreciate that 
you have set some pretty major goals, and you're putting not 
only yourself but your employees in a position where 
performance is going to have to happen, and I appreciate your 
goals.
    I'd like to go back to the 28,000 file cabinets. As an 
example, you mentioned having to search out information for 
retirees. How does that work today? Literally their file can be 
in multiple places? How does it work today?
    Ms. Springer. The starting point is the request that comes 
into OPM from the agency where the individual is retiring from. 
Now that person may have worked at three or four other 
different agencies and there may be a paper trail that follows 
them around. We have some of the records, but there's other 
information we need to get from that final agency, and so until 
we get all of that information, then we can't really start the 
process.
    For the month of February, which is the last complete month 
I have, we have about 11,000 or 12,000 cases where someone has 
requested a retirement calculation, but we're still waiting on 
an average of 30 days for agencies to complete the information 
that we need. So we can't even start our part of it until we 
get that. But there's paper information that we have, paper 
information from the agency.
    Mr. Porter. The Blue Cross/Blue Shield, of course, has been 
increasing substantially over the past 10, 15 years. Is it 50 
percent now?
    Ms. Springer. That's right.
    Mr. Porter. Do you see that as a problem with one major 
carrier that's the bulk of the enrollees?
    Ms. Springer. I don't see it as a problem, no. I think that 
certainly if you were talking about 80, 90 percent, you would 
have to view that more of a monopoly situation. I don't believe 
that the Blue Cross/Blue Shield system even approaches that. In 
fact, it's made of, as you know, of local Blue organizations so 
it really isn't like it's just one organization in the way we 
traditionally think of it. So, no, I don't find that to be a 
problem.
    Mr. Porter. Again, I think there is a lot of pleased 
participants. I just wanted to have your perspective.
    Ms. Springer. There are choices throughout the country so 
it's not as if that's the only choice that's offered.
    Mr. Porter. The health benefit plan does a good job in 
competing or providing for competition to keep the premiums low 
and the cost low for our employees. Are you able to do that 
soon with the dental and vision plans, where we can maybe have 
some competition?
    Ms. Springer. We do hope to do that. We've had a request 
out obviously for some time for people to--or for organizations 
to apply throughout the country. We're looking to regional 
carriers as well as national carriers. We will be introducing 
the coverage in the next open season, which will be in the 
latter part of calendar 2006. Under the law, we had to get that 
done by the end of 2006.
    We believe there will be choice, and choice is what leads 
to--and competition leads to cost containment. So that's an 
important factor.
    Mr. Porter. This global economy also has global challenges, 
and one of those is, as our work force, of course, is aging in 
certain areas, a key component of retirement today in this 
economy is long-term care. It's a huge challenge for our 
retirees.
    Can you address plans for long-term care and those 
provisions for employees as options?
    Ms. Springer. There's no question that long-term care is 
important. I think it's going to become increasingly important. 
We have the aging of the population generally, in addition to 
the Federal work force population and our own dependence. We 
believe we have a good program. The carriers that we partner 
with on that, John Hancock and, I believe, Met Life are leading 
carriers in this. They have been in the forefront of this for 
many years.
    So we believe we're doing our due diligence with respect to 
providing strong plans and strong options to the Federal work 
force. I believe we have more people in the Federal work force 
plans than in any other--compared to any other employer in the 
country. So people are, while it's not large, it's growing, and 
we've gotten good response to it. It's something we're going to 
have to continue. It's very, very important.
    Mr. Porter. Do you think there is any way we can find 
additional incentives to help our employees to invest in a 
long-term plan. Are there some other things to help. I mention 
that because I see this as a critical part of retirement. If 
there's anything else we can do to get incentives to have the 
employees sign up.
    Ms. Springer. It's an area that we need to continue to look 
at, I agree with you. It's got such--in addition to the 
individual level, the economic value of having long-term care 
provisions in place is just going to become more and more 
important.
    Mr. Porter. I'd like to, not necessarily today but in the 
near future, chat with you or someone with your staff and see 
what else we can do to help encourage incentives to keep the 
costs reasonable. Again, I think it's a priority for us.
    Ms. Springer. Glad to do that.
    Mr. Porter. Mr. Davis.
    Mr. Davis of Illinois. Thank you very much, Mr. Chairman.
    Madam Secretary, this is actually one of the most 
comprehensive and most clearly delineated management tools that 
I have seen, and I want to commend you and the agency for 
having developed it.
    Since there was no mention in your fiscal year 2007 budget, 
I'm assuming that OPM does not intend to apply to the Centers 
for Medicare and Medicaid services for the $1 billion a year 
employer subsidy your agency is entitled to under the Medicare 
Modernization Act, since Federal annuitants receive drug 
coverage through the FEHBP that is at least equal to the new 
Medicare part D benefit.
    I also understand that you have said that the agency did 
not need to take advantage of the subsidy since you did not 
intend to significantly change the drug coverage Federal 
annuitants age 65 or older receive through that Federal 
Employees Health Benefits Program plan for the 2006 contract 
year. Why should OPM opt out since the Medicare law does not 
require CMS to determine if employers applying for the subsidy 
would have retained their retiree drug coverage with or without 
the payment?
    And, finally, I have heard that OPM has said that you do 
not believe it is appropriate for the Federal Government to be 
paying itself for this purpose. As you know, payments to OPM, 
unlike other employers, would not result in new spending on the 
Federal budget rules since they would not be spent outside the 
government. Furthermore, such inter-governmental transfers are 
not unusual. In fact, the Federal Government pays itself for 
the future retirement obligations when Federal agencies make 
contributions to their own budget retirement trust on behalf of 
their employees.
    If the government regularly pays itself for other purposes, 
why not apply for this subsidy and use it to help mitigate 
costs in the Federal Employees Health Benefits Program?
    Ms. Springer. The way OPM views it is that there's a 
principle involved with respect to that subsidy that we believe 
doesn't apply here, and that is that we believe that subsidy 
was intended to ensure that plans who might otherwise start to 
draw back from what they would offer their employees would get 
that to help preserve the level of benefits that they were 
being offered. As you say, we have no intention of drawing back 
from that.
    Now one could say that, why not still take advantage of it? 
And in that case, we view it that it would be taking out of one 
part of the government as you say and giving it to another. The 
FEHB plan is heavily subsidized already from the employee 
standpoint and so, again, both from the standpoint of the cost 
to the employee and to the member, as well as to the 
preservation of our benefit offerings, we just didn't feel that 
it met that test and so we did not elect to take advantage of 
it.
    I know that there are some people who might say even with 
the subsidy that you have, and even though you're not planning 
any cutbacks, you should still take it. If we were to do that, 
as you say, from an overall Federal Government standpoint, it 
would be neutral because it would be taking from one part to 
another. So we haven't elected to do it, and we followed the 
principle that's being applied that we think when that was 
designed in the first place.
    Mr. Davis of Illinois. Are you suggesting the annuitants 
would be well covered without it, that there is really not the 
absolute need?
    Ms. Springer. I don't believe there is an absolute need, 
no.
    Mr. Davis of Illinois. You also mentioned that, in the 
future, we can look forward to getting rid of the part-time 
penalty. Would you elaborate a bit on that?
    Ms. Springer. I'm sorry, could you repeat that?
    Mr. Davis of Illinois. The penalty that----
    Ms. Springer. In the CSRS, yes. Currently, if I retire from 
the Federal Government and if I were in the CSRS, which is the 
plan in effect for employees hired before 1984, if I wanted to 
elect to stay on on a part-time basis, the high three benefit 
calculation or high three compensation salary calculation that 
leads to my benefit would be adversely affected by that part-
time service, the way it's treated. So that would bring down 
the benefit that I would ultimately get when I fully retired.
    So that is driving people away from part-time service if 
they were covered by the CSRS. So this fix makes an adjustment 
to how part-time service is counted.
    Mr. Davis of Illinois. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Porter. Not a question, but it's a problem Nationwide 
where we have a work force, I know the public employees in 
Nevada are penalized if they come back in the system, and there 
are so many folks out there that are talented and would like to 
remain part of the work force and provide so much information 
and talent. I think it's great. We have to make sure that we 
continue not only in the Federal program but other programs so 
there's an incentive.
    Congresswoman, do you have any questions?
    Ms. Norton. Thank you, Mr. Chairman.
    I want to commend you as well, Ms. Springer, on laying out 
your objectives. I ran a very troubled agency; when I came, it 
was troubled, and we put in place management by objective and 
held to it, and it really is the only way to kind of monitor 
yourself.
    Some of what you're monitoring looks like it may be out of 
your control. Let me ask you the status of the appeal from the 
district court decision almost a year ago that threw out the 
collective bargaining regulations in the Department of Homeland 
Security system.
    Ms. Springer. Well, let me go back to how we deal with 
those things in our plan. There are a couple of references in 
the plan to personnel reform, and one specifically is DHS and 
to the DOD. We are monitoring those, we're holding ourselves 
accountable for monitoring the results to the extent that they 
move forward. We are looking to, and there is specific language 
in here to build the case for personnel reform, further reform.
    Now the parts that have been most contentious of the two 
existing relate predominantly to the labor management sections, 
as you know.
    Ms. Norton. You have two cases; you have two cases that--
one has thrown out the DOD's new personnel regulations, and of 
course, these were the two agencies that were before the 
committee and where the changes were going on. And then another 
involving, yes, collective bargaining. That was a wholesale 
throwing out of the entire set of regulations.
    Ms. Springer. Yes. So with respect to those, and I can't 
comment actually on where we are with respect to appeals and 
things like that.
    Ms. Norton. Wait a minute, I'm not asking--as I understood 
it, the government--you can comment, seems to me, on the status 
of the case. Has the Government appealed the collective 
bargaining case to a higher court as yet?
    Ms. Springer. Not in DOD.
    Ms. Norton. I'm sorry?
    Ms. Springer. Not in the Department of Defense, I'm told. 
That appeal to a higher court has not occurred in the 
Department of Defense case.
    Ms. Norton. All right. The Department of Defense case 
involved personnel regulations. If you haven't appealed, the 
time for appeal--that involved something where the 
regulations--Mr. Chairman, you may remember, we had this very 
complicated hearing where somebody in an effort to deal with 
the appeals processes wanted to put everything together. It was 
extremely complicated. One of them was labor relations. The 
labor relations sections, the appeal sections. DOD regulations 
and all of the collective bargaining of Homeland Security 
regulations have now been thrown out by district court. The 
labor relations ones were a total disgrace. They simply 
collapsed everything into the chairman of the commission. It 
didn't have a ghost of a chance of surviving. But all of that 
was predictable.
    The reason I ask these questions is, if we're going to get 
regulations and then everything is going to be on hold for 
years because you're in court, it doesn't make much sense to 
issue such regulations. So what I want to know is both of these 
cases are old; one, August 2005, the other, I don't have the 
date in which it was decided. All I want to know is, is the 
department appealing these cases or is it going back to the 
drawing boards to try to in fact conform to the court 
decisions?
    Ms. Springer. Let me answer that with two pieces. One is 
that, in the case of DOD, while an appeal has not been filed 
yet, it's being considered.
    Ms. Norton. You mean, the time for appeal hasn't----
    Ms. Springer. That's a more recent one. There's a little 
bit more time for the DOD one. The DHS one has been appealed, I 
believe. And there are some oral arguments next week. The 
lawyers handle that.
    Ms. Norton. So, what, the present collective bargaining is 
in place, or we're on hold?
    Ms. Springer. The present one is continuing in place. But, 
if I may, we had a hearing with this committee a few months ago 
where we talked about the future of personnel reform, and given 
what was going on with DOD and DHS, did that bear on our 
thinking for the future? One of the things that I remember 
having discussion when the comptroller general was here and his 
recommendation was to focus on the personnel, the pay parts, 
rather than on the labor management parts. And so I think that 
was something that several of you had thought might be 
fruitful, and so in accordance with this plan, as well as that 
hearing, that's an avenue that we're looking at as well.
    We are continuing to work with the existing DOD and DHS as 
those go through the courts, but we're continuing to review and 
build the case and see how we can make the business case, 
particularly with respect to the pay portion. And what I'm 
finding as a validation for that type of thing is how that's 
helping me to get our things done, our plan done, because in 
the SES, at least I can tie the actual goals to compensation.
    Ms. Norton. I'm very pleased that you're working on the pay 
parts. Perhaps--I can think of nothing more controversial that 
I have ever heard in the committee than the notion that there 
would be pay for performance but there were no regulations 
describing how an employee would be notified in writing what 
was expected of the employee whose pay would be conditioned on 
performance.
    I have to ask you, particularly since you say you're 
working, and I'm very pleased to hear that, on the pay parts of 
the reform; are you working on that particular threshold notion 
of notice to the employee in writing on how the employee is to 
be evaluated and pay is to be therefore conditioned?
    Ms. Springer. The answer to that is, yes, and that's 
nothing new. That has actually been in our proposal. I feel 
very strongly if someone won't put it in writing what they 
expect of you, then you should question why you're working for 
that person.
    Ms. Norton. There was a huge defense given, and I don't 
know who it was, about why this wasn't necessary, and it took a 
lot of time of the committee.
    Ms. Springer. That is in the version that we put out last 
summer, that the requirements should be in writing, that they 
need to be in writing. So, yes, that is important. I agree with 
you.
    Ms. Norton. Thank you very much.
    Now let me ask a question about whether you intend--you 
say, on page 8, implementation of Civil Service reform across 
the Federal Government monitoring report on demonstration 
projects at agencies. We know there are all kinds of 
demonstration projects going on. My question is, do you intend 
to implement the reforms or the changes that were passed for 
DOD and for Department of Homeland Security anywhere else in 
the Federal Government at this time?
    Ms. Springer. There is no proposal right now like the DOD 
or DHS proposal, other than the kind of straw man, if you will, 
that we put out as a discussion piece last summer.
    Ms. Norton. There's a great deal of anxiety in the Federal 
work force about that. As I said in my opening statement, you 
really do have a huge number of employees to figure this out 
with, and it does seem that since you have the majority of the 
work force already, that ought to be enough for now, and then 
if there is to be implementation, if you can show that this 
works, you would have shown it because you have most of the 
people to show it on.
    What is the average age of the Federal work force?
    Ms. Springer. I believe it is in the mid 40's.
    Ms. Norton. I ask that question because I want to know why 
you think that a work force of that age would--sorry, whether 
the FEHPB, which has seen rising premiums, to much of our 
consternation and yours, for years, would benefit if in fact 
large sections of the work force, young and highly paid, were 
to opt for these health benefit plans, and what condition do 
you think that would leave the health benefit--the FEHBP in?
    Ms. Springer. First of all, with respect to the work force 
population, it's a little bit of a barbell population, if you 
will. We have a lot of people in the upper age group and we 
have been trying to bring people in at the younger age group. 
I'd like to have people at every age group come to the Federal 
Government.
    Ms. Norton. You got what you got.
    Ms. Springer. But we have a little bit of a barbell now.
    Ms. Norton. What?
    Ms. Springer. A barbell effect, where we've got a lot at 
the upper end, fair amount at the younger end, not quite as 
much in the middle. I believe that choice is good, and limiting 
choice is usually not good. Now when you have as we have right 
now in the Federal Government only a few options for that one 
type of the high deductible, it's only in a very few plans, 
then you can't really give a fair assessment in my opinion of 
what the response will be and who will respond to it.
    We have somewhere around 7,000 to 14,000 I believe people 
who have responded. That's a very small portion of a plan that 
covers 8 million people. So to draw conclusions just on that 
small sample, I think is a little bit premature.
    Ms. Norton. Although we do know that they're young and 
among the highest paid.
    Ms. Springer. That's true, but the fact is that most of the 
people who might be interested from those other age groups are 
covered by Blue Cross and Blue Shield.
    Ms. Norton. If what you want to do, if your answer to me 
then is, premiums won't go up, and choice is what we're after, 
then you need some kind of control group. And are you trying to 
get that. Because so far that's not what you have.
    Ms. Springer. I'm not saying the premiums will go up.
    Ms. Norton. Do you think premiums would not go up if 
substantial numbers of young and highly paid parts of the 
Federal work force were to opt for health benefit plans. Do you 
not believe that the premiums for everybody else would in fact 
go up?
    Ms. Springer. I don't know. I don't know for sure what that 
would do. It would depend on who it was and----
    Ms. Norton. I have just said who it was.
    Ms. Springer. I understand who it was. That's not 
necessarily the case. There are different things that drive 
that, whether it's prescription drug use or whatever the 
procedures are and the cost of those procedures. We care about 
costs. As a matter of fact, our people negotiated a $700 
million lower overall premium cost in the 2006 FEHB as a result 
of some pretty tough negotiations. So we're interested in cost, 
but I also believe choice is important. That's a state-of-the-
art choice. And for us to not offer that in our largest plans, 
I think is doing disservice to many people in the Federal work 
force.
    Ms. Norton. Mr. Chairman, I don't have another question. 
I'd just like to ask Ms. Springer, and I appreciate your 
answers to these questions, I'd like to ask you if perhaps you 
and I could have a conversation concerning a bill that the 
chairman of the full committee and I have introduced involving 
what we can only believe is an oversight and another one of 
those things that came long before you came, and that was in 
1997.
    That was in 1997 when the Federal Government took over some 
District of Columbia functions, and those functions mostly had 
to do with the criminal justice system. Included were some 
court employees who were--because the court system, they took 
over the courts. They didn't take over the implementation of 
that system. Included were some court employees. These 
employees lost all the time they had put in as public 
employees; and, of course, they lost their annuity.
    The bill that the chairman and I--Chairman Tom Davis and I 
had put in has nothing to do with the annuity and nothing to do 
with the Federal work force in general, although these are 
Federal employees for purposes of pay. In order--and it was 
done to relieve the District government of great State costs 
that only the District carried. It really does not involve the 
Federal work force as such in any case. The chairman's bill 
that I co-sponsor only would allow employees to retain their 
time in service so that, for example, if you retired--if you 
get to retirement age, you can retire.
    We have employees, for example, who are close to retirement 
age. Now they have to start all over again, so they have lost 
their time.
    I don't think that OPM has anything to gain or--but there 
was somebody in your Human Resources Department that apparently 
there were negotiations with at the State level over a long 
period of time, and those negotiations failed, and the chairman 
and I have introduced a bill. I would like to be able to have a 
conversation with you, rather than send my staff to talk to the 
Human Resources staff who could not see that the Federal 
Government had nothing to lose by letting these employees who 
work for the D.C. Superior Court retire on retirement age. We 
have people 60 years old who have been told, well, you have to 
work 12 more years because you got transferred to the Federal 
Government, and I'm just wondering if you would be willing to 
sit down with us.
    Ms. Springer. I would. I would be glad to do that.
    Mr. Porter. Chairman Davis.
    Chairman Tom Davis. Thank you. Good to see you.
    In 2004, as you know, Congress enacted legislation creating 
a new dental-vision benefit. Proposals have been submitted, and 
award is scheduled for late May. I think one of our intentions 
at that point was that an option be available to Federal 
employees to include a low-cost option such as a dental HMO. Is 
that coming, do you think?
    Ms. Springer. I will check and get back to you on that, Mr. 
Chairman.
    Chairman Tom Davis. I think that is very, very important, 
as they compete with their dollars for what they are going to 
do, to have some benefit there in the low-cost range.
    Telecommuting, this is an area where the Federal Government 
continues to lag far behind the private sector. I go out to 
some of the leading technology companies in the world out in 
northern Virginia, and their workers are able to telecommute 
from their homes, from any kind of equipment they have, 
wherever they are in the globe. They are not required to be 
there and punch a clock from 9 to 5, and they are some of the 
most productive workers in the world. And yet, at the Federal 
level, we see ourselves floundering at this.
    Being a Federal employee is different than it was 100 years 
ago when the Civil Service rules were written. When are we 
going to get with the program and what do we have to do up here 
to spur agencies on to allow some of their sophisticated 
employees to telecommute? Not only will this help the traffic 
in the region, it is a lifestyle issue, but it's a recruitment 
and retention issue. Some of my staff--my staff director was 
telecommuting for 3 months after her child was born and was 
just as effective. I wanted to keep her here. I think we are 
losing good people sometimes because we don't show this kind of 
flexibility.
    Ms. Springer. Well, I couldn't agree with you more. We do 
need to do it. It is proven that it works. We, I think, are 
doing a good job of convincing managers that it does work.
    There was, obviously, a natural reticence to it. If you 
didn't see people in the office, there were people that felt 
that they didn't have control or accountability. That's 
changing. So that's the first step. But we need to go beyond 
that. We need to make sure that agencies are including that in 
their recruiting options.
    As you know, in this particular plan one of the career 
patterns that we are establishing is for remote employees. So 
if someone wants to get up at 4 a.m., and work from their home 
for the Federal Government, that's fine. We want that person. 
Not only should we say, well, we can accommodate that, we 
should go out and look for that person if they are going to be 
a good worker for the Federal Government. And that involves 
telecommuting.
    And I would go further to say that it's even more and more 
a requirement as we plan for the potentiality of possible 
pandemics or other types of events where maybe there might be a 
period of time where people do have to work from a remote 
location. So I would say there is even more of an urgency today 
than we've had in the past to make telework an important 
component of our employment structure.
    Chairman Tom Davis. I agree with that, and I just think we 
are missing the boat in so many ways. We recently changed the 
law so that Federal contractors are allowed to charge the 
government for time their workers are telecommuting. They don't 
have to be in the office 9 to 5 to do that. And you find some 
of the most productive workers. When you are home, the phones 
aren't ringing around you. If you have to leave in the middle 
of the day for a doctor's appointment or your kid's school play 
or something like that, it's a lot easier. You can be more 
productive. It can be abused, and I recognize that as well. But 
we have to be able to work out some guidelines to enable these 
agencies to allow their employees more opportunities to 
telecommute. I think it will lead to more productivity if it's 
done right.
    Ms. Springer. I agree with you.
    Chairman Tom Davis. The Federal Government is notoriously 
slow and inefficient in its hiring. We have to have a better 
hiring process. Can you explain how you plan to reduce the time 
required to hire an employee down to 45 days or less?
    Ms. Springer. Well, we've had an ongoing effort with that. 
We are monitoring how well we're doing, and it's been uneven. 
One of the pieces to that is not just that you get to the point 
of processing and arriving at a decision but to let people know 
what the decision is. We have hundreds of thousands of people 
who apply for the jobs. Let's say 1,000 people apply for a 
given job, and 1 person's accepted. We don't get back to the 
999. So that hurts our reputation for anyone who might want to 
apply a second time or a third time for another job.
    So one of the things that's in this plan is a requirement 
that agencies will notify all applicants of decisions at the 
end of that 45-day period. That's a requirement.
    We are also asking and putting into place for managers and 
applicants to fill out a very brief 10 or 12 question survey on 
how the process went. What can we learn? Did managers get 
everything they needed to make that decision quickly? Did 
applicants get everything they needed, or were we easy to deal 
with?
    We are also trying to get more and more of our positions 
that are available up on USAJOBS. USAJOBS is a good tool, but 
it's not used to the fullest extent yet by all agencies. So 
we've got a goal in here to have their position requirements 
conform to the USAJOBS structure so that it can get put up on 
there and have broader access. That will allow for a more 
timely process for going through the whole application and 
decision.
    So those are some of the steps in addition to what we are 
already doing.
    Chairman Tom Davis. Thank you very much.
    Mr. Porter. Thank you.
    Mr. Cummings.
    Mr. Cummings. Thank you very much, Mr. Chairman.
    Director Springer, just a few questions. Right now, if we 
were trying to sell the Federal Government to young people and 
they said, well, what's the advantage, Director, of me coming 
into the Federal Government as opposed to going into private 
industry, what would be your best pitch?
    Ms. Springer. If I were doing that today, I would say that 
you can come to the Federal Government and do almost anything 
you want to do. If you don't know yet what you want to do in 
your career, if you come to work for us and you change your 
mind, you are still in the same system of opportunities. You 
can go to anyplace you want. If you want to get into science 
and research, fine, we can do that for you. If you want to 
become an engineer, that's great. If you want to find a cure 
for cancer, we're big enough to give you the funding to do it. 
If you want to clean up the Everglades, that's great. If you 
want to work in a park, we can do that for you. Anything that 
you want to do in your career, you can do with the U.S. 
Government; and, at the same time that you are doing that, you 
are serving your country and other people. So it is really 
fulfilling, and it's a great place. You can do anything you 
want.
    Mr. Cummings. And if they said in response to what you just 
said, ``I notice that there is a 2.2 percent raise. I think I 
can do better than that perhaps in private industry,'' what 
would you say?
    Ms. Springer. I'd say that, first of all, that 2.2 percent 
is tied to an index. So we think that keeps it competitive. But 
what we are going to do in this budget, the President has 
proposed that we should be able to start to look occupation by 
occupation and see if we need to do some special adjustments to 
make sure that we are competitive.
    Mr. Cummings. And if they said, ``When are you going to do 
that? Because my life is going by. I am about to get married, 
and I want to have children, and I need to have some kind of a 
way to plan my future''--and let me give you the rest of it--
``and I know how slowly the Federal Government works.'' That's 
it.
    Ms. Springer. If you are getting married and you are 
thinking of having children, then one thing you are really 
thinking about, in addition to just your salary, is your health 
benefits. You want to get with an organization that has good 
health benefits. You are going to get with an organization 
that's going to let you plan for the future. Companies today 
out there, you have no assurance they're going to keep that 
health benefit program or that you are not going to have to 
pay. We pay 70 percent of the premium. Not only that, we have a 
great retirement for you to start to be planning on. Not only 
do we have a defined benefit plan, we also have our equivalent 
of a 401(k). You are lucky to find either one of those in the 
private sector.
    So I am glad you care about your family, because we care 
about them, too; and that's why we've got a great benefit 
structure. The salary part is competitive, and we are making it 
even more competitive. Do you want a job?
    Mr. Cummings. That's pretty good.
    Now what happens when they say, ``I notice that the 
increase has been 3 percent over the last several years, and it 
looks like we are dealing with 2 percent and 2.2 percent now. 
Why should I have a lot of optimism about this pay raise 
situation?''
    Ms. Springer. Well, if it turns out that--we think 2.2 is 
in line. But if it turns out that it's not, the U.S. Congress 
will take care of it for you.
    Mr. Cummings. But--OK. Let's talk about that 2.2 percent. 
We have tried to have some kind of equity between the military 
and the civilian population, is that right? And this is a part 
of all of that?
    Ms. Springer. Yes.
    Mr. Cummings. But we are also going down, am I right, as 
compared to in the past, the pay raises?
    Ms. Springer. It's a lower percentage.
    Mr. Cummings. And that is because of the overall budget 
situation?
    Ms. Springer. Well, it's not so much as that it is tied to 
an employment cost index. That's what we look at. If that 
employment cost index had been higher, then it would have been 
a higher proposal in the budget. But the idea is that we are 
trying to preserve the relative position of the Federal 
Government in the labor market. We don't think we lose ground 
if we can stick to that index. The index happened to be lower.
    Mr. Cummings. And the locality based payment, how does 
that--in the past--where does that money come from?
    Ms. Springer. The locality-based portion is--that's part of 
the 2.2.
    Mr. Cummings. That's part of the 2.2.
    Ms. Springer. Mm-hmm.
    Mr. Cummings. And that has always been a part of the 2.2?
    Ms. Springer. Yes.
    Mr. Cummings. So you said to that employee--I see my time 
is up. I do want to ask you this last question, though.
    Ms. Norton was asking you a question about the health 
insurance situation and this high-deductible situation. And you 
have--you described your work force as one like a barbell. That 
means we've got a few people in the middle, is that right?
    Ms. Springer. Less in the middle. Yeah.
    Mr. Cummings. So we've got the high-deductible folk at the 
one end, and they are paying a lot of money, and they are 
basically, I guess, probably the younger folk because they are 
not so much worried about having to pay that deductible. Is 
that a reasonable assumption?
    Ms. Springer. There are some people that will react that 
way.
    Mr. Cummings. Well, what have been your findings? Have you 
done any research on that?
    Ms. Springer. It's limited so far. Because we've, first of 
all, only offered this recently. And, as I said, it was either 
7,000 or 14,000 people, which is a very small subset of the 
whole 8 million that are covered in the plan. So we are still 
studying it. GAO has issued the first report on it. And it is 
true that younger people have made up a greater portion of 
those who have been attracted to it. It remains to be seen 
whether or not that will continue to be the case as it is 
offered more broadly.
    Mr. Cummings. And the GAO report talks about insufficient 
information being given to the employees to make a decent 
decision. You are familiar with that, are you not?
    Ms. Springer. I've heard it. Yes.
    Mr. Cummings. Well, I hope you've more than heard it, 
because that's a big deal. Because I think the same person that 
I talked to you about a little earlier would be concerned about 
that whole issue of having sufficient information to make a 
decision for the family. And, you know, you talk about how 
concerned the Federal Government is about them. I think it 
would be a sad day when somebody goes to try to get the 
information that you need to make a decision--any of us--to 
make a decision, and the GAO, which I have a tremendous amount 
of respect for, comes back and says: These people are trying to 
make a decision for their families. A lot of these people are 
young people planning to have families. And then they look and 
come to find out they don't have sufficient information.
    I guess what I am asking you is you are the person who has 
the--you carry a lot of weight--I am almost finished, Mr. 
Chairman. You carry a lot of weight. And I believe that if you 
said, look, there's something wrong with this picture, 
insurance companies, we in the Federal Government want you to 
give our people sufficient information so that they can make 
decent decisions. I think just you saying that, if you haven't 
already said it, would make a phenomenal difference.
    As my pastor always said, he says: Words can create. And I 
believe that the next time GAO looks at that, after you have 
said these words that create a better circumstance for those 
Federal employees to select, then that won't be a part of the 
report.
    Ms. Springer. Well, I agree with you. The next time GAO 
does look at that, that won't be a part of the report. We, I 
think, historically have done a good job on education. To the 
extent that we need to do a better job on this piece of it, we 
are going to do it.
    One of the things, incidentally, that's in this plan--I'll 
just take a second--is that we are trying to--and starting with 
this call letter that goes out right now for the carriers of 
the next season--is to ask them to give us more transparency, 
particularly with specific procedures. So that if you are 
trying to make a decision, well, on an appendectomy--if we know 
that an appendectomy costs this if we go this way or this if we 
go this way, that will help allowed for more informed choices.
    So I agree with you 100 percent. That won't be there in the 
next GAO report.
    Mr. Cummings. Thank you very much.
    Ms. Springer. Thank you.
    Mr. Porter. Thank you very much. We appreciate your 
testimony today.
    I'd like to leave a couple thoughts. One, regarding more 
information and health technology. And I appreciate your help 
at least in partnering with us with that language where my bill 
has to do with information technology. I understand we are 
trying to make it as transparent as possible for the employees, 
and I appreciate your help.
    Twofold. What I would like to work on, whether it is in a 
comprehensive bill, those that you've mentioned, or free 
standing, two areas that I am very concerned about, one is 
long-term care, as we mentioned, looking for some initiative 
there. But also a priority is the part-time piece, and we have 
to make sure that we address that nationwide and even in the 
private sector and local governments to make sure we can 
encourage those--especially those areas of significant need 
from teachers across the country to Federal employees.
    There is such a wealth of talent in our retirees that would 
like to remain in the work force, and I would like to spend a 
little bit of time understanding why the scoring is the way it 
is, and not for today but in the future, so I can better 
understand if it is an actuarial question or if it's a policy 
question or an administrative question. I would like to find an 
incentive to allow our Federal retirees or soon-to-retire and 
even the private and local government sector to be able to stay 
in the work force.
    Ms. Springer. Glad to do that.
    Mr. Porter. And I am also looking forward to the garage 
sale when we sell all those cabinets. That's 28,000 cabinets. 
So let me know when that is.
    Ms. Springer. Will do.
    Mr. Porter. Thank you very much for an outstanding hearing. 
The meeting is adjourned.
    [Whereupon, at 11:30 a.m., the subcommittee was adjourned.]
    [Additional information submitted for the hearing record 
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