[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]







 IS THE FEDERAL GOVERNMENT'S GENERAL SCHEDULE (GS) A VIABLE PERSONNEL 
                         SYSTEM FOR THE FUTURE?

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

                                HEARING

                               before the

                   SUBCOMMITTEE ON FEDERAL WORKFORCE,
                    US POSTAL SERVICE AND THE CENSUS

                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 15, 2014

                               __________

                           Serial No. 113-131

                               __________

Printed for the use of the Committee on Oversight and Government Reform






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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland, 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee       CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona               GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania         JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee          MATTHEW A. CARTWRIGHT, 
TREY GOWDY, South Carolina               Pennsylvania
BLAKE FARENTHOLD, Texas              TAMMY DUCKWORTH, Illinois
DOC HASTINGS, Washington             ROBIN L. KELLY, Illinois
CYNTHIA M. LUMMIS, Wyoming           DANNY K. DAVIS, Illinois
ROB WOODALL, Georgia                 TONY CARDENAS, California
THOMAS MASSIE, Kentucky              STEVEN A. HORSFORD, Nevada
DOUG COLLINS, Georgia                MICHELLE LUJAN GRISHAM, New Mexico
MARK MEADOWS, North Carolina         Vacancy
KERRY L. BENTIVOLIO, Michigan
RON DeSANTIS, Florida

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                    Stephen Castor, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director

 Subcommittee on Federal Workforce, U.S. Postal Service and the Census

                   BLAKE FARENTHOLD, Texas, Chairman
TIM WALBERG, Michigan                STEPHEN F. LYNCH, Massachusetts, 
TREY GOWDY, South Carolina               Ranking Minority Member
DOUG COLLINS, Georgia                ELEANOR HOLMES NORTON, District of 
RON DeSANTIS, Florida                    Columbia
                                     WM. LACY CLAY, Missouri



















                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 15, 2014....................................     1

                               WITNESSES

The Hon. Katherine Archuleta, Director, U.S. Office of Personnel 
  Management
    Oral Statement...............................................     4
    Written Statement............................................     7
The Hon. Donald J. Devine, Senior Scholar, The Fund for American 
  Studies
    Oral Statement...............................................    14
    Written Statement............................................    16
Mr. Robert Goldenkoff, Director, Strategic Issues, U.S. 
  Government Accountability Office
    Oral Statement...............................................    21
    Written Statement............................................    23
Ms. Patricia J. Niehaus, National President, Federal Managers 
  Association
    Oral Statement...............................................    50
    Written Statement............................................    52
Mr. J. David Cox, Sr., National President, American Federation of 
  Government Employees
    Oral Statement...............................................    64
    Written Statement............................................    66

                                APPENDIX

QFRs from J. David Cox, Sr., submitted by Rep. Farenthold........    94
QFRs from Robert Goldenkoff, submitted by Rep. Farenthold........    98
Response to QFRs from Ms. Patricia Niehaus, submitted by Rep. 
  Farenthold.....................................................   100
Answers to questions from Ms. Katherine Archuleta, submitted by 
  Rep. Farenthold................................................   101

 
 IS THE FEDERAL GOVERNMENT'S GENERAL SCHEDULE (GS) A VIABLE PERSONNEL 
                         SYSTEM FOR THE FUTURE?

                              ----------                              


                        Tuesday, July 15, 2014,

                  House of Representatives,
    Subcommittee on Federal Workforce, U.S. Postal 
                            Service and The Census,
              Committee on Oversight and Government Reform,
                                                   Washington, D.C.
    The subcommittee met, pursuant to call, at 10:00 a.m., in 
Room 2154, Rayburn House Office Building, Hon. Blake Farenthold 
[chairman of the subcommittee] presiding.
    Present: Representatives Farenthold, DeSantis, Issa, and 
Lynch.
    Staff Present: Melissa Beaumont, Majority Assistant Clerk; 
Molly Boyl, Majority Deputy General Counsel and 
Parliamentarian; Linda Good, Majority Chief Clerk; Jennifer 
Hemingway, Majority Deputy Policy Director; James Robertson, 
Majority Senior Professional Staff Member; Andrew Shult, 
Majority Deputy Digital Director; Peter Warren, Majority 
Legislative Policy Director; Jaron Bourke, Minority Director of 
Administration; Lena Chang, Minority Counsel; Devon Hill, 
Minority Research Assistant; Julia Krieger, Minority New Media 
Press Secretary; and Mark Stephenson, Minority Director of 
Legislation.
    Mr. Farenthold. The committee will come to order.
    I would like to begin this hearing as we begin all our 
hearings, with the mission statement of the Government 
Oversight and Reform Committee.
    We exist to secure two fundamental principles: first, 
Americans have a right to know that the money Washington takes 
from them is well spent and, second, Americans deserve an 
efficient, effective Government that works for them. Our duty 
on the Oversight and Government Reform Committee is to protect 
these rights. Our solemn responsibility is to hold Government 
accountable to taxpayers, because taxpayers have a right to 
know what they get from their Government. We will work 
tirelessly in partnership with citizen watchdogs to deliver the 
facts to the American people and bring genuine reform to the 
Federal bureaucracy. This is the mission of the Oversight and 
Government Reform Committee.
    At this point I will start with my opening statement, then 
we will go to Mr. Lynch for his, and then we will start with 
our witnesses.
    Much has changed since 1949, when the General Schedule was 
established to classify Federal workers according to their job 
duties and to assign pay. The minimum wage was $0.70 an hour 
and the average yearly wage was just under $3,000, and the 
Federal Government's workforce consisted mainly of clerical 
staff.
    Sixty-five years later the Government continues to classify 
and pay 80 percent of its work force using the same antiquated 
system, ignoring the realities of the current labor market. It 
is no wonder we continue to bear the burden of inefficient and 
unacceptable and unaccountable Federal Government.
    Grade inflation without a corresponding change in a 
worker's duty has become a commonplace occurrence in Federal 
Government. Over the last 15 years, the number of Federal 
workers occupying positions in the top grade, GS-12 through GS-
15, has increased by 30 percent, with salaries ranging from 
$75,000 to $157,000 a year. More than 99 percent of the GS 
workers are given a 3 percent raise based primarily on the 
passage of time.
    It is hard to see the fairness in the current system and 
bureaucratic culture that it fosters. It allows workers to 
simply show up for work and stick around for years and get 
wages, when those go over and beyond to serve the taxpayers and 
do a great job are awarded over the poor performers. No private 
sector company could survive if its HR system was run this way.
    Even Federal employees themselves recognize the flaws in 
the current system. I spoke with the local union leaders at the 
Corpus Christi Army depot in my district, and they agreed the 
current GS personnel system is outdated and needs reforming.
    In addition, the recent OPM workforce survey stated that 
half the Federal workforce has reported their pay raises did 
not depend on performance, while only 22 percent believe that 
performance and pay are linked. Way to motivate people, Uncle 
Sam!
    In its budget request for fiscal year 2015, President Obama 
stated the Federal personnel system remains inflexible and 
outdated and that ``the pay and classification system needs to 
be updated.'' He further stated, ``An alternative cost-
effective system needs to be developed that will allow the 
Government to compete for and reward top talent while rewarding 
performance.''
    The President and I could not agree more on this issue. 
Unfortunately, as with many things this President said, the 
sound bites are good, but actually implementing the policy 
never seems to happen as advertised.
    The OPM's strategic plan promises the agency will serve as 
a thought leader in research and data-driven human resources 
management and policy decision-making. The President's budget 
for the OPM states that it would permit the OPM programs to 
prioritize their activities in support of the OPM strategic 
plan. Alas, neither the strategic plan or the President's 
budget specifically addresses OPM's work to reform the pay 
classification system.
    Accordingly, I look forward to learning what efforts, if 
any, are underway within the OPM. The chief of human capital 
officer's counsel and the Administration have established labor 
management councils to craft a proposal for submission to this 
committee that would modernize the GS. Such a program and such 
a proposal should be completed promptly and include provisions 
to strengthen the link between pay and performance.
    Achieving common sense to how the Federal Government 
classifies, evaluates, and compensates its workforce will bring 
needed accountability and, I believe, much improved performance 
in the Federal Government. As we work to ensure a more 
efficient cost-effective Government to reduce the burden on 
American taxpayers, it is reasonable to expect the Federal 
workforce policy reflect modern HR practices and not one out of 
the 1940s.
    With this, I will now recognize the ranking member, the 
gentleman from Massachusetts, Mr. Lynch, for his opening 
statement.
    Mr. Lynch. Thank you, Mr. Chairman. I want to thank you for 
holding this hearing to examine the General Schedule system, 
which covers 80 percent, or 1.5 million, of the over 2 million 
dedicated civil servants in the Federal government.
    I also want to thank our witnesses for their willingness to 
come before this committee and share their thoughts on how to 
improve the Federal Government's management of its own 
workforce.
    I am not sure that Congress has a lot of credibility with 
Federal workers these days. Throughout the past several years, 
Congress has imposed on our vastly middle-income Federal 
employees, the Federal worker pay freeze of 2011, the Federal 
employee pay freeze of 2012, the Federal employee pay freeze of 
2013, unpaid furloughs, pay in benefit cuts; Congress has 
required Federal workers to contribute approximately $135 
billion towards deficit reduction over 10 years, including $21 
billion as a result of the increase in retirement contributions 
for our newest Federal workers.
    As we consider issues that affect our dedicated Federal 
workforce, including the effectiveness of the General Schedule 
pay system, we must bear in mind that the critical services 
that Federal workers provide to American citizens on a daily 
basis are extremely important to our Country. Our Federal 
workers are the border patrol agents who work every day 
securing our borders, the law enforcement personnel who 
identify and capture terrorists, the nurses and doctors at the 
VA who care for our wounded warriors, and the personnel in 
charge of administering and providing oversight of multi-
million and multi-billion dollar essential Government 
contracts.
    Today's hearing seeks to determine the ideal and necessary 
attributes of a modern personnel system for a 21st century 
government and the increasingly complex functions that our 
agencies are expected and required to perform in service of the 
American people.
    Some would like to modernize the GS system. Others want to 
eliminate it and replace it with the so-called pay-for-
performance system. We have tried that. We have tried that 
several times.
    In their written testimony, the Government Accountability 
Office identified eight attributes of a modern personnel 
system, but noted the difficulty in finding the right mix of 
attributes. Stakeholders disagree on the mix, and I believe 
that is the greatest challenge to modernizing our personnel 
system. For instance, does internal equity mean equal pay for 
work of equal value, continue to be a primary value or is 
allowing a greater degree of unequal pay, as some have 
proposed, the key to effective government?
    I think the Congress and stakeholders can all agree that a 
modern and effective personnel system must allow for an 
increasing focus on flexibility, accountability, and 
performance.
    I look forward to discussing these and other issues with 
our witnesses this morning.
    Thank you, Mr. Chairman, and I yield the balance of my 
time.
    Mr. Farenthold. Thank you very much, Mr. Lynch.
    Additional members may have seven days to submit their 
opening statements for the record.
    We will now recognize our panel of witnesses.
    The Honorable Katherine Archuleta is the Director of the 
United States Office of Personnel Management; the Honorable 
Donald J. Devine is Senior Scholar at The Fund for American 
Studies and former Director of the Office of Personnel 
Management; Dr. Robert Goldenkoff is Director of Strategic 
Issues for the Government Accountability Office; Ms. Patricia 
Niehaus is the President of the Federal Managers Association; 
and Mr. David Cox, Sr. Is the National President of the 
American Federation of Government Employees.
    Pursuant to committee rules, all witnesses will be sworn 
before they testify.
    Would you please rise and raise your right hand?
    Do you solemnly swear or affirm that the testimony you are 
about to give will be the truth, the whole truth, and nothing 
but the truth?
    [Witnesses respond in the affirmative.]
    Mr. Farenthold. Let the record reflect that all witnesses 
have answered in the affirmative.
    Thank you and please be seated.
    Pursuant to our normal procedure in this committee, and 
most committees here on the House, we ask that each of our 
witnesses limit their opening statement or testimony to five 
minutes so we will have time to question you on the issues that 
we are concerned about and that your testimony raises. So we 
will get started with Ms. Archuleta.
    You are recognized for five minutes, ma'am.

                       WITNESS STATEMENTS

         STATEMENT OF THE HONORABLE KATHERINE ARCHULETA

    Ms. Archuleta. Chairman Farenthold, Ranking Member Lynch, 
and members of the subcommittee, thank you for the opportunity 
to testify before you today regarding management of the Federal 
workforce.
    For over 65 years, the GS has been the primary 
classification and pay system through which the Federal 
Government has been able to attract and retain a skilled 
workforce, while also ensuring fairness and accountability. Of 
course, our Federal civilian workforce is much different than 
it was 65 years ago and is continuing to change. Today's 
knowledge-based economy requires different and more advanced 
skills and experience in order to meet the challenges we face.
    There have been concerns regarding whether current 
personnel systems are up to date and flexible enough to meet 
changing needs. To ensure we have the workforce with the right 
skills to meet the challenges we face, an examination of our 
human capital management system is needed. In addition to this 
examination, which is a key part of the President's Management 
Agenda, OPM also actively works to assist Federal departments 
and agencies in ensuring that they are able to recruit, retain, 
and train highly qualified workers. Both OPM and agencies have 
responsibility for implementing the GS classification system in 
accordance with principles set forth in law.
    While each agency has the responsibility to administer the 
classification system for its own positions, OPM is responsible 
for monitoring agency programs to determine whether they are 
consistent with Government-wide standards. This effort includes 
active outreach to agencies such as formal guidance, as well as 
quarterly policy forms.
    Agencies can also receive one-on-one assistance to address 
specific issues with items like series designation and the 
crafting of effective position descriptions. As part of the 
Government-wide strategy on gender pay equality, OPM will also 
continue to work with agencies to ensure compliance with the 
principle of equal pay for equal work. These outreach and 
education efforts are critical to ensuring that agencies have 
and are aware of tools necessary to properly apply 
classification policies.
    Agencies also have maximum flexibility to design and 
operate performance appraisal systems which are aligned to 
their organizational goals and are focused on achieving 
results. OPM issues regulations and provides guidance to 
support agencies and their managers in using the tools they 
have to carry out effective performance management, including 
ensuring that awards are based on merit and performance. This 
Administration has put limits on award spending in place that 
have required agencies to more rigorously scrutinize awards 
programs, and we continue to work to make sure that awards are 
targeted to those employees who are most deserving of 
recognition.
    Communication between managers and employees is essential 
to the performance management process. One of the principles of 
the Federal merit system is that employees who cannot or will 
not improve their performance should be terminated. Managers 
must use these tools they have available to hold poor 
performers accountable, support training and development 
opportunities as needed, and take necessary action if employees 
do not improve.
    One of my top priorities is for OPM to provide leadership 
in helping agencies attract and retain a skilled and diverse 
workforce for the 21st century. This includes ensuring an 
inclusive work environment where employees are fully engaged 
and energized to put forth their best efforts, achieve their 
agency's mission, and remain committed to public service.
    The People and Culture pillar of the President's Management 
Agenda includes goals to help agencies create a culture of 
excellence and engagement that enables the highest possible 
performance from employees; assist agencies in building a 
strong, world-class Federal management team; and help agencies 
hire the best talent from all segments of society. This 
includes working with agencies to better use data from the 
Employee Viewpoint Survey to shape how we manage our employees 
and increase accountability, identify innovative strategies to 
capitalize on the executive talent we have today, and build the 
executive workforce we need for the future and untie the knots 
in Federal human capital management.
    Thank you, Mr. Chairman. I would be happy to answer any 
questions you may have.
    [Prepared statement of Ms. Archuleta follows:]


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    Mr. Farenthold. Thank you.
    Mr. Devine, we will go ahead and let you have your opening 
statement and testimony.

          STATEMENT OF THE HONORABLE DONALD J. DEVINE

    Mr. Devine. Okay. I guess the first question is what is 
somebody who was OPM director 30 years ago doing here. I had a 
very different kind of experience. The President named Ronald 
Reagan, who came in, he said he was going to cut Federal 
spending and functions. But he wasn't doing it to save money, 
he was doing it to reorient priorities. The Federal Government 
was doing too much and not doing it well, and his changes were 
to make fundamental reforms of Government. He asked me to take 
the job and I said, what do you want me to do? He said, I want 
you to cut 100,000 non-Defense employees, I want you to reduce 
the bloated benefits, and I want you to make them work harder. 
I said, thanks a lot, going to make a lot of friends in this 
job.
    I always remember what Harry Truman used to say: You need a 
friend in Washington doing the tough job, buy a dog. So I 
bought two to be on the safe side.
    But in fact we did reduce 100,000 non-Defense slots, mostly 
by attrition. We did change the retirement system, the health 
system, saved $6 billion in those days. It's about $60 billion 
today. And we did put in a pay-for-performance system, and I 
think people do work harder and work better.
    I could say yes to President Reagan because I knew 
something he didn't, which was that Jimmy Carter run for 
President to reform the Civil Service, and I knew my 
predecessor, the first director of OPM. Scotty Campbell was 
actually my professor at Syracuse University when I was there, 
so I knew what he was doing. And they created a wonderful 
system. Unfortunately for them, they lost the next election, so 
they didn't have time to implement it. But they had it all 
ready for me and I just kind of picked it all up and made some 
changes.
    And the incredible thing is all our indicators, and I put 
in a lot of ways to try to measure this, it worked. I think it 
worked for four years or so. But it is very hard. I think Ms. 
Niehaus's testimony is very good about how tough this really is 
to do. Making a Government bureaucracy, especially one as large 
as this, work is really tough business, and if people aren't on 
top of it all the time it won't work. And that means you have 
to have the President interested in this. Jimmy Carter was very 
interested, President Reagan was constantly supporting me in 
making these changes. We had monthly, sometimes biweekly, 
meetings of the assistant secretaries for administration. You 
have to keep the pressure on to make this bureaucracy work.
    But the basic fact is it is doing too many things. 
Professor Paul Wright, he is a progressive conservative. He is 
a top public administration figure in the Country, done several 
major studies on the bureaucracy. He says the Federal 
Government is so bureaucratized now that it cannot faithfully 
execute its laws, which is what the Constitution says is the 
job.
    I just think the only solution is to really take this 
seriously. The Government is poorly organized; it is doing too 
many things. The programs conflict with each other; we have too 
many levels. Part of the problem is the personnel system that 
works, but a bigger part of it, and that is really Congress's 
job and the President's job, is to try to make this thing work. 
Right now we talk about 2 million Federal employees. There are 
19 million. Seventeen million of them are contractors. We don't 
even think about them in terms of running the system, mostly.
    And a lot of the problem is we are asking the Federal 
employees to do impossible jobs. Take the VA I mentioned in my 
testimony here. We set up an impossible system. They have 
waiting lists because the way it is set up requires the 
managers to do.
    Anyway, my only point is I would argue you need to look big 
at the whole fundamental thing and maybe get together, as my 
good friend Edgar Winsky did with the democratic chairman at 
the time, and try to fix this Government up again.
    Thanks for having me.
    [Prepared statement of Mr. Devine follows:]


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    Mr. Farenthold. Thank you very much, Mr. Devine.
    Mr. Goldenkoff.

                 STATEMENT OF ROBERT GOLDENKOFF

    Mr. Goldenkoff. Chairman Farenthold, Ranking Member Lynch, 
and members of the subcommittee. I am pleased to be here today 
to discuss the viability of the General Schedule personnel 
system, as well as other issues facing the Federal workforce, 
and what can be done to ensure a top-notch Civil Service going 
forward.
    Today's hearing is very timely, as the General Schedule 
will mark its 65th anniversary this October. Almost since its 
inception in 1949, questions have been raised about its ability 
to keep pace with the evolving complexity and nature of Federal 
work. This hearing provides an important opportunity to focus 
on whether or not is aging well.
    High performing organizations have found that the full live 
cycle of human capital management activities, from recruitment 
to retirement, need to be fully aligned with the cost-effective 
achievement of an organization's mission. However, as you well 
know, Federal human capital management has been on our high-
risk list since 2001. Over the years, Congress, OPM, and 
individual agencies have taken steps to improve the 
Government's human capital efforts; however, more work is 
needed in a number of key areas.
    In my remarks today I will focus on improving the design, 
management, and oversight of the classification system. I will 
also discuss other areas where reforms are needed, including 
creating a results-oriented Federal pay system, strengthening 
performance management in dealing with poor performers, 
addressing mission-critical skills gaps, and developing 
strategies to help agencies meet their missions in an era of 
highly constrained resources.
    With respect to the General Schedule, we have long been 
concerned that defining a job and determining the appropriate 
pay was complicated by the classification process and standards 
which we said were outdated and not applicable to current jobs 
and work. What is more, in our ongoing research, we found that 
the implementation of the General Schedule needs to more fully 
reflect the eight attributes of a modern, effective 
classification system that we identified based on conversations 
with subject matter experts, and those strategies include: 
flexibility, transparency, simplicity, and several others.
    One reason for this disconnect is the inherent tension 
among some of the attributes, where achieving one attribute can 
come at the expense of another. Going forward, OPM and 
stakeholders will need to find the optimal balance among these 
eight attributes. Further, OPM has not conducted oversight of 
agency classification programs since the 1980s, even though it 
is required by law to conduct occasional reviews. OPM officials 
told us that they rely on agencies to conduct their own 
oversight, and have not reviewed those oversight efforts in 
part because of a reduction in the number of OPM's 
classification specialists.
    With respect to pay, we believe that implementing a more 
market-based and more performance-oriented pay system is both 
doable and desirable, but it certainly won't be easy. For one 
thing, it will require shifting from an organizational culture 
where compensation is based on position and longevity to one 
that is performance-oriented, affordable, and sustainable. Key 
to a more results-oriented approach to pay is a credible and 
effective performance management system, but this too has been 
a challenge for many Federal agencies. OPM and agencies also 
need to address impediments to dealing with poor performers, 
such as the duration and complexity of the process.
    With respect to closing mission-critical skills gaps, under 
OPM's leadership, a working group identified six mission-
critical occupations, including cybersecurity and acquisition, 
and designated key Federal officials to lead remedial efforts 
for each. Going forward, additional progress will depend on the 
extent to which OPM both sustains its current efforts to 
address these six initial occupations, as well as develops a 
predictive capacity to identify and address newly emerging 
skills gaps in the future.
    The management challenges I have highlighted this morning 
are all exacerbated by the fiscal constraints all agencies are 
facing. But the good news is that the human capital officials 
we spoke with from across the Government told us that this 
difficult environment has triggered a willingness to consider 
creative and non-traditional strategies for addressing them. 
The strategies include strengthening coordination of the 
Federal human capital community, using enterprise solutions to 
address shared challenges, and creating more agile talent 
management.
    In closing, the Government has improved its human capital 
efforts, but the job is far from over. Further progress will 
require continued collaboration between OPM, individual 
agencies, and stakeholders, as well as continued congressional 
oversight to hold agencies accountable for results.
    Chairman Farenthold, Ranking Member Lynch, members of the 
subcommittee, this concludes my prepared statement and I would 
be pleased to respond to any questions that you might have.
    [Prepared statement of Mr. Goldenkoff follows:]


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    Mr. Farenthold. Thank you very much.
    Ms. Niehaus.

                STATEMENT OF PATRICIA J. NIEHAUS

    Ms. Niehaus. Chairman Farenthold, Ranking Member Lynch, and 
members of the subcommittee, in addition to being the National 
President of the Federal Managers Association, I am also the 
Chief of Labor and Employee Management Relations at Travis Air 
Force Base in California.
    Thank you for allowing me to present FMA's views to you 
today. As stakeholders in the General Schedule, we appreciate 
the opportunity to testify. Please note that I am here on my 
own time and of my own volition, representing the views of FMA, 
and I do not speak on behalf of the Air Force.
    Since its inception, the General Schedule has been hailed 
as the cornerstone of the Federal workforce. However, the 
Federal Government has evolved and the General Schedule has not 
kept up. It is FMA's stance that changes do need to take place.
    Pay-for-performance is a system that businesses in the 
private sector have utilized successfully for a long time. FMA 
believes the General Schedule should be utilized as a stepping 
stone to create a more evolved system that focuses on pay-for-
performance and reflects the needs of the present Federal 
workforce.
    Transparency, fairness, and objectivity need to be core 
elements that comprise any personnel system. FMA urges a 
departure from the rigid approach of the current General 
Schedule to a classification and pay system that reflects the 
diverse missions of agencies across the Federal Government. The 
current General Schedule system of classification and pay 
setting should be revised to more easily accommodate changing 
missions. The system would function more efficiently by 
allowing flexibility to significantly change positions as 
needed to accomplish the mission of the agency.
    The current system promotes a workforce based on longevity 
rather than performance. The highest performing employee should 
be rewarded with the highest rates of pay. Those employees who 
fall below the curve in terms of overall performance should not 
be rewarded at the same level. Where is the incentive in 
performing better than your colleagues when little is done to 
recognize additional efforts?
    While it certainly had its faults, the National Security 
Personnel System, which DOD used for five years, had many 
admirable aspects and improvements on the General Schedule. 
Under NSPS, an employee's pay raise, promotion, or demotion was 
much less inhibited than the current General Schedule rules 
permit.
    FMA supports the premise of holding Federal employees 
accountable for performing their jobs effectively and 
efficiently, and rewarding them accordingly. Under the General 
Schedule, an employee may start out as a GS-5, but demonstrate 
the skills and abilities to work at a higher grade. Because of 
the current time and grade requirements, that employee must 
wait at least a year before being promoted to the next higher 
grade, and then another year before progressing onward in his 
or her career.
    Evaluation and pay banding under NSPS for employees where 
evaluated and paid based on the job they were capably 
performing makes more sense and would encourage retention and 
recruitment. I know of many instances where highly qualified 
employees accepted lower graded jobs to get into the system, 
but then were discouraged from staying in the Federal workforce 
because of the rigid time and grade requirements imposed by the 
General Schedule.
    A shift in the culture of any organization cannot occur 
without interactive, ongoing training process that brings 
together the managers responsible for implementing the 
personnel system and the employees they supervise. 
Implementation trumps design is the biggest factor in a 
system's ultimate success or failure. With the upheaval any 
major change brings to a new pay or performance system, it is 
necessary to remain committed to the change long enough to make 
it work.
    FMA calls for the introduction of legislation that requires 
agencies to provide interactive, instructor-based training on 
management topics ranging from mentorship and career 
development to hostile work environments and poor performers. 
Training is critical to ensuring a successful implementation of 
any new program.
    If the Federal Government is to stand as the employer of 
choice, we must recognize that the Government's most important 
resources are the men and women who devote their lives to the 
public good. Full buy-in from all stakeholders, particularly 
front-line managers who are tasked with implementing any 
changes to the General Schedule, is vital. It is also important 
to listen and act when feedback is given.
    The current form of the General Schedule is outdated and 
does not reflect the demands of the Federal workforce. Its one-
size-fits-all format is not conducive to the continuing 
evolution and multifaceted mission of the Federal Government. A 
system needs to emerge that responds appropriately to these 
challenges. In the end, it is imperative that any system stand 
by the principles of transparency, fairness, and objectivity.
    Thank you again for the opportunity to express our views, 
and I am happy to address any questions you may have.
    [Prepared statement of Ms. Niehaus follows:]


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    Mr. Farenthold. Thank you very much, Ms. Niehaus.
    Mr. Cox.

                 STATEMENT OF J. DAVID COX, SR.

    Mr. Cox. Mr. Chairman, Ranking Member Lynch, members of the 
subcommittee, thank you for the opportunity to testify today.
    Starting with the three-year pay freeze initiated by 
President Obama, which first took effect in 2010, these years 
have been relentless and unjustifiably harsh towards Federal 
employees and their families. Federal workers hired in 2013 are 
forced to pay an extra 2.3 percent of salary for their pensions 
because their salaries were used to pay for the 2012 extension 
of unemployment insurance. And those starting this year must 
pay an extra 3.6 percent of their salary because of the 
Bipartisan Budget Act of 2013. They are paying more not because 
the system was underfunded, but because their salaries are a 
convenient ATM for budget agreements.
    Let me try to put that sacrifice into concrete terms.
    Mr. Chairman, right now, at Corpus Christi Army Depot, they 
are hiring a chemical engineering employee with a starting 
salary of $36,000 a year. That new employee will be paying 
$1300 more a year annually for his or her pension than someone 
in the exact same job in the same installation hired in 2012 or 
before.
    Congressman Lynch, the Boston VA Medical Center is hiring a 
respiratory therapist at a starting salary of $52,000 per year. 
That new employee will pay almost $1900 more per year than 
someone in the exact same job in the same hospital hired before 
2012 or before.
    How these employees ever going to be able to participate in 
the Employees Thrift Savings Plan is beyond my comprehension. 
The phony argument for forcing increased retirement 
contributions is that doing so brings us in line with the 
private sector. But according to the Bureau of Labor 
Statistics, 96 percent of private sector defined benefit plans 
don't charge employees one red cent.
    If this policy is not modified or repealed, it will 
impoverish an entire generation of Federal employees. 
Meanwhile, the salary gap continues to worsen. Each year OPM 
calculates gaps between Federal and private sector salaries on 
a city-by-city and job-by-job basis using BLS data. In spite of 
an ongoing campaign to discredit their findings by various 
right-wing think tanks, the data tell a consistent story: they 
show Federal salaries are an average of 35 percent lower.
    If the purpose of the pay freeze was to extend the pain of 
the recession to an engineering technician at the Corpus 
Christi Coast Guard or to a claims representative at the 
Brockton Social Security Office, then it was a resounding 
success, sirs. Between the pay freeze, temporary layoffs from 
sequestration, and the shutdown, we heard from members who fell 
behind on their rent, who were about to have their cars 
repossessed, or were not able to pay for their childcare. Worst 
were the calls from those in danger of losing their jobs 
because falling behind on bills threatened their security 
clearances. Last fall's 16-day Government shutdown was the 
financial last straw for many workers. While everyone 
eventually got back pay after it was over, the delay in getting 
their paychecks had a lasting consequences for many workers.
    These are real people who suffer real harm, not pawns on a 
political chessboard. It is not right, and we all know it.
    Fortunately for the American citizens, Federal employees 
are a devoted and resilient bunch. They are sick and tired of 
being a political punching bag and ATM, but they love their 
Country, they love their jobs, and they are profoundly devoted 
to the agencies that they work for and their missions. 
Austerity budgets make it all but impossible for Federal 
workers to keep up productivity and carry out their missions. 
Whether it is Border Patrol agents without enough staff to keep 
drug smugglers out of the Country, or USDA's plans to speed up 
the line at chicken processing plants so Federal inspectors can 
guaranty food safety, or VA doctors with patient loads of 2,000 
instead of the best practice standard of 1200, sequestration's 
cost-cuttings reduces productivity and services.
    Mr. Chairman, my written statement includes many other 
issues and I would be glad to answer any questions.
    [Prepared statement of Mr. Cox follows:]


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    Mr. Farenthold. Thank you very much, Mr. Cox.
    I will start with my five minutes.
    I appreciate the passion that you have for your members in 
the Federal workforce, and I do think that we need to be 
looking for ways to work with a budget. Unfortunately, it does 
look like the Federal workforce are the go-to people to balance 
the budget on, but that is where the bulk of the Federal 
dollars are spent, so that is why we are looking.
    I do want to point out you mentioned most Federal employees 
have a defined benefit plan, and you were comparing that to the 
private sector. Of the Fortune 100 companies now, I think only 
three of them still have a defined benefit plan; everybody has 
gone to a defined contribution plan. I just wanted to point on 
that fact.
    I want to go on with some more questions.
    Mr. Goldenkoff, in your written testimony, you talk about 
the wait times at the Department of Veterans Affair, management 
of only gas operations at the Department of Interior, IT 
management and Social Security acquisition management at DOD 
and Homeland Security all share a common problem: the breakdown 
of personnel policies such as performance management.
    How do we fix this? How do we create a system that rewards 
productivity, but don't, in the process, create something like 
in the VA, where there are checklists that encourage employees 
to keep paper lists so they meet their goals? How do we deal 
with this in a Federal environment where we have fairness in 
due process claims? In the private sector you just fire 
somebody who you think is cheating. How do we fix this? How do 
we do this in the Federal Government?
    Mr. Goldenkoff. The short answer is it is complicated, but 
it has to be addressed systemically, and one of the problems is 
that in the past we have tried to address it piecemeal, looking 
at the pay system, looking at the classification system, 
looking at the performance management system. The thing is it 
is all interrelated. It has to be treated as a matrix, as a 
system, and we are just not doing that.
    For example, starting with the classification system, as we 
all know, at 65 years old we are trying to accomplish the 
Federal Government's mission by essentially driving a 
Studebaker when we need Smart cars. If we start with that, but 
also the Federal classification system affects so many other 
things; pay and performance management. There are skills gaps. 
So all the different stakeholders, OPM, Congress, labor unions, 
different interest groups, really need to come together and 
figure out what are the problems, what can be addressed by 
agencies administratively, what needs to be addressed by 
statute, set priorities, set time frames. That is the first 
start, and we are just not doing that.
    Mr. Farenthold. Let's ask Ms. Archuleta.
    Where are you guys going on this? What are you all doing 
and what do you all need to get there?
    Ms. Archuleta. Mr. Chairman, thank you. The President, 
since 2012, has recommended that there be established a panel 
or commission to review Civil Service with the specific purpose 
of reform. I think the GAO's statement is a very important one 
in that in looking at the Civil Service system you can't look 
at it piece by piece; you have to look at classification, you 
have to look at pay, you have to look at performance.
    OPM, right now, stands ready and is willing to help in 
every one of those major areas, but we recognize that the 
system that was established 65 years ago does need reform, and 
that is why the President has suggested that a commission be 
established to look at this very carefully and to assess all of 
the impacts of putting this whole system----
    Mr. Farenthold. Is that something you all could do 
yourselves, without having to do a commission, or at least come 
up with something to start with?
    Ms. Archuleta. We would hope that we could join with 
Congress, with academics, with experts, with labor and 
management to take a look at this together.
    Mr. Farenthold. Great.
    Ms. Niehaus, I want to get back to the initial question I 
asked Mr. Goldenkoff. What do you see as the solution to the 
system of creating a goals-oriented, results-oriented 
compensation system, and not creating an incentive for fraud 
like we apparently have seen at the VA?
    Ms. Niehaus. I agree with Mr. Goldenkoff that it has to be 
a wholesale system. You have to address every aspect of the 
system in order to bring it up to date and make it more usable 
and more responsive, and I think that oversight is the answer.
    Mr. Farenthold. Well, I see that I am out of time. I think 
we have a few enough members here we will get to a second, 
maybe third round of questioning, so I am going to go ahead and 
let Mr. Lynch do his questions, and we will move back over to 
our side of the aisle after that.
    You have five minutes, sir.
    Mr. Lynch. Thank you, Mr. Chairman. And again I want to 
thank you for your thoughtful comments in working with us.
    You know, I agree with one of the things that Mr. Devine 
pointed out, that we are asking so much of our Federal 
employees. We are asking them to do a lot more than we asked 
them 30 years ago. And when I look at the FDA, we are asking 
the scientists, they are Federal employees, but they are 
scientists and PhDs and MDs, to evaluate these new 
pharmaceuticals coming online and trying to figure out what is 
safe to sell to the public. We look at the FCC with the 
explosion on social media, all these other issues regarding 
privacy. The burden on those Federal employees to get it right 
is enormous.
    The SEC. I sit on the Financial Services Committee as well, 
and trying to deal with these complex derivatives and also deal 
with the international monetary system and the reverberations 
around the world of some of these practices, it is a tremendous 
burden on these Federal employees. And here we are, as Mr. Cox 
points out, trying to hire a chemical engineer at $36,000 a 
year. Even a brand new chemical engineer coming out of college 
is going to have a bagful of student loans that $36,000 a year 
is not going to get it.
    And at my own VA in Boston, I have three VA hospitals in my 
district, we are having a hard time keeping docs. We have a lot 
of vacancies there because we can't get doctors because the 
competition from the private sector is just pulling them away; 
nurses, docs, therapists. We can't pay them enough to keep them 
in the system, so we are losing our best and it is just a tug 
of war to try to keep them.
    Even our own offices. I don't know how it is for Mr. 
Farenthold, but in my office the average is three or four years 
I will keep an employee. Once they understand the financial 
services system----
    Mr. Farenthold. That is twice what I get.
    Mr. Lynch. Okay.
    Once they get a little bit of experience working on the 
Financial Services Committee, they are off. Some of them, one 
of them just left for the Treasury over at NSA now because they 
can pay more money than we can. One of them went to Bloomberg, 
one of them just went to Fidelity, making exponentially more 
money than they are for the Federal Government. So that is the 
challenge here.
    And I am blessed to have the great employees I have at the 
VA that are willing to do that work. A lot of them are veterans 
themselves. So we have a real challenge here.
    And Government, by its nature, is very conservative. We 
don't change much. We got rid of the powdered wigs. That is 
about it. Meanwhile, the velocity of change in society with all 
of these things, with the FDA, FCC, SEC, that is at breakneck 
speed.
    And there has been a lot of talk here about poor 
performers, and we had the Merit System Protection Board do a 
study back in 2009 to try to address the issue of poor 
performers, and there was a quote in the report to the 
President that I will read now. It says, ``The greatest 
challenge for addressing poor performers in the Government did 
not come from responsibilities set forth in Title V. Addressing 
poor performers by merely changing a law that sets forth how to 
demote or remove a poor performer is not a feasible solution. 
Rather, the Government must concentrate on managing the 
performance of its employees.''
    That is sort of what Mr. Devine was getting at and also I 
think each of you have raised that issue. So, first of all, do 
you agree with that conclusion and would you agree that at 
least part of the solution is we have to manage our employees 
better to incentivize high performance, rather than just 
saying, okay, this person is not measuring up to the bar and we 
are going to cut them loose? That doesn't seem to be a feasible 
approach, given the fact that we have so many of these 
employees.
    Ms. Archuleta?
    Ms. Archuleta. Thank you, congressman. I agree with you, we 
have to take action before a problem begins, and that really 
requires, as you mentioned, top management being very strongly 
involved in the management of the employees and the performance 
management system.
    It also means that we have to have strong appraisal 
programs; that both the employer and the employee fully 
understand the performance standards that are set for success. 
And OPM can help because it takes training of these supervisors 
and the rating officers to make sure that they understand how 
we need to hold employees accountable. And I believe that 
employees want exactly that. This is not something that they 
are resisting. In fact, they want to know exactly what they are 
expected to do and how they will be assessed on their 
performance.
    And our ability to support departments and agencies is one 
that we are strengthening at OPM and one that I am very much 
focused on in terms of my commitment to the President and his 
management agenda.
    Mr. Lynch. I think I am running out of time.
    Mr. Farenthold. We will get around to a second round of 
questions.
    Mr. Lynch. All right.
    Mr. Farenthold. I think we have enough time before votes 
that we will be able to cover this matter thoroughly.
    We will now go to the chairman of the full committee, the 
gentleman from So Cal, Mr. Issa.
    Mr. Issa. Thank you.
    Mr. Devine, I am from the land of Reagan, and I think back 
to that era when a former union leader was President and he 
found himself with highly unionized air traffic controllers who 
simply wouldn't do their job, and he was forced to fire them 
all. You remember that period, don't you?
    Mr. Devine. They called him the Teflon President. All the 
grease went on me.
    Mr. Issa. You know, you don't use oil on Teflon.
    But I want to go down that line of questioning primarily 
for yourself and Mr. Goldenkoff. We now have a situation in 
which a 1949 law designed to protect or to take politics, if 
you will, out of public service was strengthened. Basically, 
that is it. And in 1949 how many labor unions were there in the 
Federal workforce? The answer is zero. 1963 was when President 
Kennedy decided that by executive order he would open the door 
for something that FDR said was wrong and should never happen.
    So I guess one of the first questions I have is as we are 
looking at the double layer of civil service protection and 
union protection, aren't we inherently--and we deal with the 
Postal Service on top of that in this committee--aren't we 
inherently dealing with a system that guarantees--Mr. Devine, I 
will take your experience--that in fact we fire or demote or 
eliminate less under-performers and outright bad workers than 
you would if you had only one, but not both, of those systems 
in place?
    Mr. Devine. Actually, Jimmy Carter, when he submitted the 
Civil Service Reform Act, he only had a Civil Service system, 
he did not originally propose to have that dual system; that 
was added by Congress as the Act was being considered. It makes 
no sense to have two systems like this. Do you want to have a 
grievance system? That makes some sense. You want to have a 
Civil Service system? That makes some sense.
    But to have two of them makes no sense. But that is what we 
have, and we should have one or the other. I mean, the fact is 
we came up with two good Civil Service systems to replace that. 
Jimmy Carter, and I give him all the credit for this, he came 
up with it. That Civil Service Reform Act, as it was passed 
originally, worked. It only worked for a couple of years, but 
it worked. I think the National Security Appraisal system 
worked. Both of them were stopped because people weren't 
willing to put the effort into it.
    Again, Ms. Niehaus, I think in her testimony, shows how 
tough that is to keep that going. So naturally the normal thing 
is, well, you know, let it go. I quoted Jimmy Carter when he 
looked over the Civil Service Reform Act beforehand, he said, 
this is boring stuff. I mean, it is boring stuff; members of 
the committee know better than anybody. But it is critical 
stuff and it is very hard to make it happen in a political 
environment.
    Mr. Issa. Well, Mr. Goldenkoff, I would like to call on you 
because you are looking at this in a slightly different way. 
Roughly two-thirds of people who call themselves Federal 
workers, not contractors, wear no uniform; and roughly one-
third, just a round number, wear the uniform of the Army, the 
Navy, the Air Force, or Coast Guard, Merchant Marine. In a 
sense, we provide this double layer of union membership, in 
most cases, or associations that act like unions, and/or civil 
service protection to those two-thirds and we provide 
absolutely nothing to the men and women who put themselves 
literally in harm's way in the most explicit sense.
    If we are going to look at civil service reform/
unionization, isn't the model, to a certain extent, the 
apolitical organizations like the Army, the Navy, the Marines 
who have merit systems for promotions, have evaluations, have a 
series throughout their careers, but ultimately can be quickly 
eliminated for crimes, quickly eliminated for dramatic under-
performance, and, in fact, historically are not promoted if 
they are marginal players?
    Would you like to comment on that? Then I will open it up 
to anyone else. Because it is amazing to me that the people who 
literally can get shot at, blown up, and killed for a living 
have the greatest risk of, if you will, if they fail to 
perform, losing their jobs, while civilians, often in the same 
theaters making more money, have no such risk.
    Mr. Goldenkoff. I think we need to be careful about any 
comparisons between the civilian workforce and the uniformed 
workforce. But focusing directly on the civilian workforce----
    Mr. Issa. How about when you are a major working at the 
Pentagon doing the exact job that a civilian at the Pentagon is 
doing? Why wouldn't there be some comparison? One is union 
represented and can't lose their job; the other is often doing 
the job that the civilian simply never gets around to, and that 
is why DOD pulls them in to do these jobs. We have had hearing 
after hearing that said that over the years.
    Mr. Goldenkoff. Well, for the civilian workforce, we are 
not excusing poor performance as Director Archuleta has said.
    Mr. Issa. I don't know. This committee has repeatedly seen 
that we give promotions to people who are negligent or outright 
criminal repeatedly, even after the misconduct is discovered. 
This is a place where the EPA director didn't have a problem 
until after a fake CIA agent at EPA had retired and was still 
using a slot, finally discovering that he had been paid for 
nine years not to work. Or in fact paying people who are in 
nursing homes full pay and benefits for years, and not firing 
the person who wrote the falsified check.
    Do you have any question but that in the uniform service, 
if somebody kept somebody on the payroll for nine years, 
knowing, in fact, they were in a nursing home, that that 
lieutenant, captain, major, or colonel wouldn't be outright 
fired for doing that, and isn't that appropriate?
    Mr. Goldenkoff. Well, of course, and that should be. And no 
one is saying that that performance is appropriate for the 
civilian workforce as well. In both cases there is no excuse 
for poor performance or under-performance.
    Mr. Issa. There is no excuse. I appreciate that, but there 
is no excuse, but there is also no repercussions.
    Mr. Goldenkoff. And there should be. And that is, with the 
performance management system, why it needs to be much more 
effective. And what it comes down to, might be painting with a 
broad brush here, but in many cases there are issues with the 
process; it can sometimes be cumbersome. There are a lot of 
protections built into it to protect it from things like 
politicization and arbitrary and capricious management.
    But in a lot of these cases, if managers would only be 
managers and do their jobs, a lot of these problems would go 
away; and we are not seeing that, and it is what Ranking Member 
Lynch said, the problem often is with managers not doing their 
jobs effectively.
    Mr. Issa. Mr. Devine, I will let you close. You know, that 
was a wonderful tirade on managers, but aren't managers also 
part of the Federal workforce that, in fact, find themselves 
keeping their jobs even while not managing? So isn't it two 
steps? The managers are being blamed for not firing the rank 
and file who simply do little or nothing in some cases, but we 
have the same protection, seemingly, for those managers.
    Mr. Devine. I have all the sympathy in the world for the 
managers. They are in an impossible system. As you said, they 
are in a dual system, and any manager that fights this is a 
hero in my book; and several of them have gone up to the Court 
of Appeals and done it. But the basic fact is I recommend, I 
didn't come across this until after my testimony, Helen Ruben, 
is a professor at State University New York at Albany. OPM was 
kind enough, I don't know if you were there or before, to give 
the data to her and compare it to GAO's comparison.
    The fundamental tool of personnel management is a 
performance appraisal system. Thirteen percent of the agencies 
only met the GAO standard, and only 80 percent of the GAO 
standard. That means that 87 percent of the agencies are not 
evaluating their people on a meaningful basis. Everybody is 
getting the same ratings. It can't work without the appraisal 
system, and I know managers hate to evaluate people. I know 
people hate to get evaluated, but that is what happens in the 
rest of the world. We have to do it in the civil service too.
    Mr. Issa. Mr. Chairman, I thank you for your indulgence.
    Mr. Lynch, I thank you for your indulgence.
    And I only meant to use the military because in fact every 
enlisted man, once he becomes an NCO, and every officer sees 
performance management reports that are part of their permanent 
record. It is not an option to ever serve 90 days or more under 
any command and not have one of those, and I think that is what 
makes the difference in the military, is they do force their 
managers and their managers' boss to score the performance of 
every man and woman in uniform.
    Thank you.
    Mr. Farenthold. Thank you, Mr. Chairman.
    We will now recognize the gentleman from Florida, Mr. 
DeSantis, for five minutes.
    Mr. DeSantis. Thank you, Mr. Chairman.
    Ms. Archuleta, I read about the strides that the Federal 
Government has made with gender pay gap, down to 11 percent 
difference in the GS ranks. The most recent numbers I have seen 
from the White House are roughly 20 percent, almost twice as 
high. So is it an accurate statement to say that the White 
House performs worse than the agencies that comprise the 
Executive Branch in terms of the gender pay gap?
    Ms. Archuleta. I think the White House is working very hard 
to close the gap.
    Mr. DeSantis. Well, I appreciate that, but at this point 
they are laggards, is it fair to say that?
    Ms. Archuleta. I believe part of that, Mr. Congressman, is 
that there have been much younger----
    Mr. DeSantis. Can you just answer the question yes or no? 
You are trying to explain it, but is it true that they are 
lagging behind where the Federal Government is in terms of the 
individual agencies?
    Ms. Archuleta. I believe they are working hard to close the 
gender gap.
    Mr. DeSantis. Okay. Well, I will take that as a yes.
    Mr. Cox, I just wanted to clarify. You talked about the pay 
freeze instituted by President Obama. Are you testifying here 
today that since that pay freeze was initiated that no Federal 
employee has seen an increase in their pay?
    Mr. Cox. I am saying that they have not seen the cost of 
living adjustments for three years, sir. You know that they got 
the----
    Mr. DeSantis. So they have received----
    Mr. Cox. They got the within rate increase----
    Mr. DeSantis. But they have received step increases as 
appropriate?
    Mr. Cox. If they were due them, yes, sir.
    Mr. DeSantis. And merit increases. And then there have been 
individual bonuses. I mean, we have seen bonuses given out to 
employees who have admitted to misconduct in the EPA. We have 
seen bonus payments in the IRS. I take your point on that, but 
I just don't want to leave the impression that somehow they 
were denied the ability to move ahead in their career simply 
because of the President's order.
    Mr. Devine, I appreciated your comments to start, talking 
about reducing the size and scope of Government. There is a 
political component of that. I think that unleashes positive 
energy in our Country, more freedom. I think we would be better 
off. But even if you are somebody who is a liberal and believes 
in activist Government, we have a problem that this Government 
is just not accountable and is not susceptible of proper 
congressional oversight. We don't know how many agencies there 
are; we don't know what they are doing. So I think there should 
be some bipartisan agreement that we need to have a more 
accountable system.
    Let me ask you to chime in about this dealing with people 
who perform poorly, because when I was in the Navy on active 
duty, if you performed poorly, particularly as a junior 
enlisted, they could be summarily processed out with a negative 
administrative discharge from the service, and the idea was you 
have to perform, otherwise we are going to find somebody else. 
So in the civil system that clearly is not the case.
    We have had people testify before our Oversight Committee 
who have admitted to serious misconduct and yet they still end 
up working for the agencies. This drags on months and months, 
sometimes years. So how would you say how should we in Congress 
be looking at that issue of accountability within the system 
and how would you address the difference between the civilian 
and the military?
    Mr. Devine. I would put back into effect the National 
Security Appraisal system or go back to the Civil Service 
Reform Act. Go back to the managers. I mean, it was Congress, 
not under your control, but it was Congress that got rid of the 
pay-for-performance system for managers. The problem is the 
system. We can't expect the managers to operate in a system 
that doesn't work. It needs radical reform.
    Jimmy Carter believed in big government as much as anybody 
in the world, all right? But he knew that it wasn't working, so 
he put a tremendous amount of energy into trying to set up a 
system that worked; and, in my opinion, it did. People can 
differ with that, certainly, but in my opinion it did. I think 
what Ms. Niehaus says with the problems they had with the Air 
Force or whatever, they had problems with it, but of course it 
is going to have problems. You have to work on it.
    But that means it has to start with Congress and the 
President. You have to say this is a serious system; it is hard 
to do, but we have to do it. And I know the politics of things 
today is very difficult, but you could start working on this 
committee now. This is where it came from before, with people 
as far apart as you are, and I can guarantee you that; they 
were in charge then. I mean, I think you have to seriously look 
at reforming this whole system. It is easy to blame them, and 
blame certainly can go around, but the problem is the system 
makes no sense and it has to be fixed.
    Mr. DeSantis. Well, I appreciate those comments. A lot of 
my constituents are frustrated as taxpayers. They want their 
dollars used well. If someone is not doing the job, they want 
that to be done in an effective way. So I appreciate those 
comments and I yield back.
    Mr. Farenthold. Thank you very much.
    I want to talk a little bit, for my five minutes here, 
about working with the Government and passion for your job. I 
have always told my children pick a job doing something that 
you like, and then it isn't like work. It worked for me. Once I 
got fed up with being a lawyer, I went and became a computer 
consultant. Computers do what you tell them and your clients, 
as lawyers, don't always. Then I got interested in politics, 
went into talk radio and wanted to make a difference, and 
realized I was kind of a brick thrower on the radio; maybe I 
would do better running for office. And here I am.
    I don't think anybody, as a child, sits and says, well, I 
want to be a bureaucrat in the Federal Government, but that is 
what they end up. What robs the Federal workforce of their 
passion? You go to work for the EPA because you care about the 
environment. You study forestry and go to work for the National 
Park Service because you love the outdoors. You go to work at 
the Corpus Christi Army Depot because you are good with your 
hands; you want to help the military, you want to fix 
helicopters. You go to work at the VA because you want to help 
people. But all of a sudden you get caught and mired up in 
something.
    I don't understand how some of the folks at the VA get to 
sleep at night knowing what a backlog there is. Why aren't they 
saying I am going to stay an extra hour, I am going to work a 
little bit harder and get this backlog done? What kind of 
system have we created where just doing the barest minimum is 
acceptable?
    I am going to start with Ms. Niehaus and Mr. Cox. What have 
we done to rob the people that are working of the passion to do 
the best job possible?
    Ms. Niehaus. I have to say that part of it is feeling, as 
Mr. Cox said earlier, that the Federal employee is the ATM for 
the budget system. That is tremendously de-motivating for 
employees to feel like they are not being recognized. It is 
also, I think, de-motivating for an employee to be in a pass/
fail performance system. If you have an employee who is a 
stellar employee, who still has that passion, who works that 
extra hour, who goes that extra mile, and the person sitting 
next to them comes in and does the job they are paid to do and 
they do it well, but they just do what they are paid to do, 
they don't go that extra mile, they get exactly the same 
performance rate. They get the same paycheck.
    Mr. Farenthold. So in the private sector, when it comes 
time to tighten the belt, and I have had to do that a couple of 
times in my computer company, the person that gets to stay is 
the person that works the extra hour.
    Mr. Devine, do you want to address that question a little? 
Do you have any thoughts on that now that you are kind of on 
the outside looking in?
    Mr. Devine. I think it goes back to performance. I live in 
the Washington area. I know many, many Federal employees. They 
know the system doesn't work. They know that if you perform 
well you don't get paid better. That can be discouraging.
    Mr. Farenthold. The 2013 Federal Employees Viewpoint Survey 
found that only 28 percent of Federal employees agreed their 
work unit takes steps to deal with poor performers who cannot 
or will not improve. That is a decrease from 2012 results.
    Ms. Archuleta, is there anything the OPM can do to help?
    Ms. Archuleta. I think the EVS also showed that the 
employees, when asked about were they willing to do even more, 
the fact of the matter is that I believe, and I have literally 
spent the last eight months talking to employees across the 
Country, is that they are very engaged. Are they satisfied with 
pay? Do they have concerns about how they are evaluated? That 
is true, and OPM is working very hard with top managers to make 
sure that they understand their responsibilities in appraising 
performance and certainly the issues of classification. 
However, when I speak to employees and talk about the work that 
they do, I do see that passion. I do see that commitment to 
what they have taken on, and I would be very reluctant to use a 
broad brush to paint all employees with one color of 
enthusiasm. I believe that there is great enthusiasm among 
Government employees who every day provide service to the 
American people.
    Mr. Farenthold. Some of the comparisons are drawn between 
what you can make in the private sector and what is made in the 
Federal Government, and it is hard to compare apples to apples. 
Federal Government, a lot of the jobs have a defined benefits 
retirement plan, which, as we know, is very uncommon in the 
private sector. You do have a lot more due process and 
protections and job security there. So I guess it is difficult 
to get an apples to apples comparison.
    Is there something that can be structured to where we are 
paying the employees what they could get? I had a receptionist 
that worked for me for a very short period of time because she 
got mad that I paid the computer techs, who went out and fixed 
computers, more than I paid her. She was mad about that. Well, 
they had a higher skill set and were doing a different job. So 
how can we create a systems where we are competitive or similar 
to the private sector and compare those apples to apples, make 
sure we are getting the compensation we need, but not 
overpaying them if we take in all of the perks that are 
associated with a Government job?
    Ms. Archuleta. I believe that all of your panelists have 
mentioned the fact that we really need to take a look at the 
whole system. And it is not just about pay, but certainly the 
classification. I think it is time, after 65 years, to begin to 
look at all parts of the Civil Service reform with input from 
the Congress, from the President and his Administration, from 
labor and experts in the field. I think there is time to step 
back and take a look at that.
    In the meantime we need to enforce and to support the 
system that we have right now, and that is OPM's job to make 
sure that managers are held responsible, employees understand 
their responsibilities, and that there are performance 
management tools available to both so that they can perform to 
the level the American people expect.
    Mr. Farenthold. All right, thank you very much.
    I see I have gone a little bit over time.
    Mr. Lynch, you have been a little outnumbered on our side 
of the aisle, so I will give you your five minutes and I will 
be loose with the gavel if you have some more you want to go 
along with.
    Mr. Lynch. I appreciate that, Mr. Chairman.
    I do want to just talk a little bit about some of the 
things we talk about, the backlog of the VA. Now, I understand 
that that is an embarrassment and that we need to fix that, but 
I do want to drill down on that a little bit. You know, at my 
VA hospitals, I have three of them, as I said, in my district, 
and what we try to do in Division 1 was get rid of that backlog 
by telling any veteran that was waiting for an appointment at 
the VA that if we couldn't give them an appointment within 14 
days, they could go to any private hospital in the area, and we 
have some good ones in the Boston area, and I represent Boston, 
Quincy, and Brockton, and we have a lot of good hospitals in 
there, great teaching hospitals, world-class hospitals.
    So we told our veterans that if we can't treat you in 14 
days, you go to Mass General or Tufts or Quincy Medical Center 
or Good Samaritan Hospital down in Brockton. You know what the 
veterans said? No thanks. No thanks, we'll wait for the VA. 
Almost 70 percent of our veterans said we want to be treated at 
the VA; we are veterans. And we appreciate the camaraderie, the 
esprit de corps, the way we are being treated at the VA.
    So even though we gave everybody the opportunity to go to 
the private sector, go to private hospitals, they valued what 
they were getting at the VA; and that is a sign of success that 
70 percent of them wanted to stay at the VA because they love 
the way the VA docs and nurses and therapists and staff are 
treating them. So just saying there is a backlog doesn't 
explain everything.
    The other fact of the matter is that we had 3 million men 
and women in uniform serve in Iraq and Afghanistan over the 
last few years, last 10, 11 years; and that has created a 
problem as well that the demand for services at the VA has 
created a real crunch and a real struggle for them to meet the 
need, as well as the fact that many of our World War II and 
Korea veterans are at that age, for the first time in their 
lives they have to rely on someone else to care for them. So 
that explains some of what is going on at the VA as well.
    I spend a fair amount of time at the VA in my district and 
they are doing a hell of a job, and I just hate to see them get 
beat up all the time.
    The other thing I wanted to talk about is it is true that 
President Kennedy changed the way we do things with the fact 
that unions now represent Government employees, but I do want 
to make one important distinction here. When we allow Federal 
employees to become unionized, we strip away their right to 
strike. So any worker who is out there who feels that they are 
unfairly treated, that their job is dangerous, that they are 
upset about the working conditions, their pay scale, I was an 
iron worker and I will confess I was a union president for the 
iron workers, and if I felt that the men and women on my job 
were in a dangerous situation, I would pull them off in a heart 
beat, I would shut that job down. Federal workers don't have 
that opportunity; they have to keep working. They have to keep 
working. They can complain, they have the right to complain, 
they didn't take that way, but we take a lot away from those 
Federal employees when we allow them to become unionized.
    The other thing is I appreciate the comparison between the 
military and the civilians, but I do want to point out where 
one instance in our recent history where that overlapped, and 
that was when--I was elected on September 11, 2011 in the 
Democratic primary, so when I came to Washington it was a new 
place here, and we had anthrax attacks in some of the 
Government buildings, as well as the Brentwood postal facility 
in Brentwood that services the D.C. area.
    So even though it is a union environment, they don't have 
the right to strike, the postal employees; we had two of our 
great postal workers, Thomas Morris and Joseph Curseen, who 
died of anthrax inhalation; it was in the mail. So the unions, 
at that time, were pressed with the dilemma that do we send our 
workers in there. We are talking about letter carriers, clerks, 
mail handlers, supervisors, postmasters, all of them 
represented by unions and associations. Do they send their 
workers in there to go to work? Because coming out of that 
Postal Service, if you have anthrax on your clothes, you are 
bringing it home to your family.
    So a lot of those postal workers had a dilemma of do we go 
to work. Do we go to work? Do we keep the mail going? A lot of 
people were concerned that if the mail did not get delivered to 
every home and business in America six days a week, that the 
economy would shut down at that time.
    Well, the postal workers stepped up. Every mail handler, 
every clerk, every letter carrier, every supervisor, every 
postmaster showed up for work. Even though that anthrax was in 
those facilities, they kept going to work. And, in my mind, 
that reflects the patriotism that we see in our military. No 
less. It reflects the passion that they had for their job and 
the duty that they feel they owe to this Country. Those are 
postal workers, those aren't necessarily regarded as uniformed 
employees, as the comparison was made by the committee 
chairman.
    But I do see that in many of our workers at the Federal 
level and I think it is important for us to--and I agree with 
Mr. Devine on this point and Ms. Niehaus, that we try to 
elevate that work that they are doing and encourage that higher 
level of performance, but in a way that I think balances out 
across job levels, that we don't end up with the situation we 
had with NSPS, which is also in Ms. Niehaus's testimony, where 
it was very subjective, very arbitrary. Under the pay-for-
performance standard, it paid very well to be white and male. 
That would work for me as a worker, but I know there are a 
whole lot of people out there it wouldn't work for.
    So when we had pay-for-performance, if you were white and 
male, you were very highly likely to get a bonus. It didn't 
work so well for a lot of other folks. So I am just very leery 
about going--and, Ms. Niehaus, the reason you haven't been 
asked so many questions is you are so smart. I honestly believe 
that. But you do, in your testimony, point out the gaps in that 
program that we had on pay-for-performance, and I just think 
there has to be a better way. We can't just go back to that. We 
can't just institutionalize inequality in our hiring system and 
in our job performance and job rating system. We can't just 
take a giant step back in time to that problem. I think we are 
making progress here, but you need to make a whole lot more.
    I am way over on my time. Thank you, Mr. Chairman.
    Mr. Farenthold. Thank you very much.
    We will now go to the gentleman from Florida for his second 
round of questionings. Mr. DeSantis, you are recognized for 
five minutes.
    Mr. DeSantis. Thank you, Mr. Chairman.
    I think one of the issues that I have noticed is it seems 
to me the 19th century basically had a spoil system, and your 
guy got in, his people would be there, and that is how the 
Government operated; and there were a whole host of problems 
with that, of course. But the one thing you did have was 
honesty. I mean, you knew what you were going to get with that.
    Then we moved away from that and said, you know, we 
actually need the Government to be administered by neutral 
professionals, and that is kind of the civil service system was 
born.
    The issue, though, that I have seen in this term of mine is 
a lot of these folks are not necessarily neutral, and we, on 
this committee, have dealt with misconduct at the IRS. And if 
you look at the activity of somebody like a Lois Lerner, I 
mean, she is clearly operating as a partisan operative, not as 
somebody who is simply neutral applying the law. Whether she 
wanted to refer Senator Grassley for an audit, whether she was 
saying that the Tea Party was dangerous, whether she was 
rooting on Democratic Senate candidates, whether any time 
somebody would raise issues on the Democratic side, you could 
see her starting to move, even having meetings with the 
Department of Justice about whether you could criminally 
prosecute some of these 501(c)(4) groups.
    But then that is not it. You look at how the EPA works with 
some of the environmental leftists. There is a very close 
relationship there. The FEC, we have had a woman who had to 
resign because she violated the Hatch Act by campaigning for 
the President's re-election. And oh, by the way, today it is 
reported that we tried to get her emails and her hard drive 
supposedly has gone the way of the buffalo, so I guess these 
things just happen any time Congress is interested.
    So I wanted to ask you, Mr. Devine, is this a legitimate 
concern that we have kind of a veneer of objectivity, but in 
some of the activities, particularly with the IRS, you clearly 
don't have even-handed treatment given to American citizens?
    Mr. Devine. I agree. I mean, people who were oriented to 
serve in Government and come more from one kind of persuasion 
than another. We have done studies of this. So there is kind of 
a natural part of this, and that is why you need some kind of 
appraisal system to what is going on there to try to keep it 
somewhat neutral.
    Mr. DeSantis. Did you, when you came in with President 
Reagan, it is one thing to have a persuasion or the other. 
There are a lot of people who disagree with me who are 
honorable, do a good job. But did you see anything in those 
days that would rival, say, the conduct of a Lois Lerner, where 
the official conduct was done in a way that was partisan in 
nature?
    Mr. Devine. Well, Congressman Lynch mentioned that you are 
not allowed to strike when you become a worker. When I was 
there, they did go on strike. And I will say that most people 
of the other party wanted to let them get away with it. You 
mentioned not taking jobs. We had job actions all over the 
place. Now, admittedly, we came in there with an agenda that 
the workforce didn't like, but, no, there is an attitude, a 
kind of way of thinking of the average person in the Federal 
workforce. I don't think there is much you can do about it 
except make sure that they don't act on it; and that means you 
have to have good management and it means you have to have good 
structure, and the fact is we don't.
    Just preparing for this, over the weekend, in The 
Washington Post, Center of Disease Control is sending deadly 
pathogens to the Country, all right? They have been doing it 
for 10 years. All right? In the same paper, the National 
Institutes of Health improperly stores vials of incurable small 
pox without having it under control. The Washington Navy Yard 
has 160 cameras that try to find the guy who shouldn't have 
gotten through the security system in the first place. 
Department of Health and Human Services, the same weekend, they 
can't find the numbers for the Obamacare sign-up, so they are 
just not going to report them anymore.
    I mean, the VA, for all the good Mr. Lynch talks that they 
do, the fact of the matter is that 70 percent won't go to 
another hospital of the 15 percent of veterans who go to 
veterans hospital. Most veterans do not go to veterans 
hospital; overwhelmingly, about 85 percent don't.
    Mr. DeSantis. I appreciate that very much.
    Mr. Chairman, thank you for pursuing this. When you look at 
somebody like a Lerner, like we have documented on the full 
committee, Dave Camp sends a letter, saying hey, preserve these 
emails and then we find out that, 10 days later, her hard drive 
mysteriously crashes, supposedly. These emails are not 
recoverable. Now there are two Federal judges who don't think 
that that is a very good explanation; they are demanding 
answers in court within the month. I think that that is good.
    But then, just last week, we find out that that within days 
of the draft IG report that substantiated the targeting being 
circulated at the IRS, Lerner writes to the IT technician 
saying, well, you know, Congress will look at these emails, so 
we need to be careful of what these say; could we instant 
message and that not be searchable? This is very problematic, 
so I think that there are whole host of issues, but certainly 
that accountability is important.
    And I yield back.
    Mr. Farenthold. Thank you. You have given me a business 
idea for when I retire from Congress. Backup solutions for the 
Federal Government could potentially be pretty lucrative.
    I am going to do one more quick round. I am going to bat a 
little bit of cleanup here and hit a couple of questions I 
wanted to get answers to, then see if Mr. Lynch has any that he 
wanted, then we will let you guys go.
    Mr. Cox, I wanted to visit with you about how your union is 
seeing the pay-for-performance working. Are there any 
facilities where you have employees, you all represent, that 
are using pay-for-performance, and how is that working?
    Mr. Cox. The pay-for-performance systems that were in place 
with NSPS that Congress scrapped because there were so many 
problems with it, as Mr. Lynch pointed out, there was a lot of 
discrimination that came out very clear; it was a very 
subjective type system, so we have not seen good examples of 
pay-for-performance. I actually believe if you look at the VA 
and the system that they had for their medical center directors 
and the pay-for-performance, it certainly created a very 
convoluted system that gave us the backlog, sir.
    Mr. Farenthold. Do you think there is any situation in 
which a pay-for-performance would work? Do you think something 
that could be crafted could work within the Federal workforce?
    Mr. Cox. I think that if Congress would allow the Federal 
Employee Pay Comparability Act that was passed in the 1990s to 
actually be implemented and the Federal employees were given 
the locality, the cost of living adjustments, and that there 
was full implementation of that, that we would see a lot more 
improvement throughout the Country with Federal employees and 
the pay and some of the----
    Mr. Farenthold. So that is adjusting it for localities. But 
wouldn't you agree that the highest performing employees should 
be rewarded with the highest rates of pay and the lowest 
performing employees should be a little worried about their 
jobs?
    Mr. Cox. There are many, many systems in the Federal 
Government to reward employees with step increases, to give 
them bonuses, and many things of that nature. Sir, frequently, 
when I come to Congress, when I come to many meetings, we talk 
continuously about the poor performers in the Federal 
Government. I believe most employees, a high percentage, go to 
work every day with that passion and do that job. I was a 
registered nurse in the VA and I loved it every day of my life 
to go and to care for those veterans. Most people are doing 
that.
    Mr. Farenthold. Well, there is no question the bad apples 
are the ones that get all the publicity. But we need to get rid 
of those bad apples, I think, so they don't spoil the whole 
bunch. It is the people who lose their hard drive or the people 
who keep secret lists that have shaken the American people's 
faith in the Government. You guys, more than anybody else, 
should want to get rid of those people, I would think.
    Mr. Cox. Sir, there are many, many procedures within the 
federal regulations, as well as in contracts, to terminate 
Federal employees and remove Federal employees. I deal with 
that on a regular basis.
    Mr. Farenthold. Let me ask you one more question. Your 
testimony discusses the effect of the temporary freeze. I would 
like to know how many AFGE members have left the Federal 
workforce as a result of their unhappiness with the temporary 
freeze on the January adjustment. Is it a big number?
    Mr. Cox. We have seen a larger number of Federal employees 
leaving the Federal Government through retirements, through 
other jobs simply because, yes, the pay freeze has been in 
effect for three years.
    Mr. Farenthold. But you don't have numbers or percentages?
    Mr. Cox. I don't have specific data, no, sir.
    Mr. Farenthold. All right. Thank you.
    Ms. Archuleta, I wanted to address one more topic, and that 
is the probationary period. Typically, there is a one year 
probationary period for employees. I think that is probably 
reasonable for somebody who comes in as a data entry clerk or 
an entry level job. But there are some types of jobs that you 
are not even completed with your training for that job within a 
year. Do you have any thoughts on that? Do you think it would 
be appropriate to adjust the probationary period to begin not 
at the time of hiring, but at the time you complete your 
training and actually begin your job?
    Ms. Archuleta. It is true, sir, that, as you stated, there 
is a probationary period of one year for both GS and SES. I 
believe that, in looking at civil service reform, that that 
would be an issue that would be obviously ready for observation 
and discussion.
    Mr. Farenthold. Thank you very much.
    Mr. Lynch, did you have some cleanup you needed to do as 
well?
    Mr. Lynch. Yes, just a little bit. Thank you, Mr. Chairman.
    Ms. Archuleta, let's stay with you. On average, how long 
does it take to remove a person for poor performance, if you go 
through this whole system?
    Ms. Archuleta. It could take anywhere from 60 to 120 days, 
around that, dependent upon whether the evaluations have been 
complete as that employee has been moving through the system.
    Mr. Lynch. Okay.
    Ms. Archuleta. If they are not completed, obviously, it 
could take longer.
    Mr. Lynch. Ms. Niehaus, do you think there are ways we 
could streamline that whole process?
    Ms. Niehaus. I think that based on a lot of the MSPB case 
law, rather than the regulations that OPM is responsible for, 
it actually takes a lot longer to prepare a case. Once you have 
actually hit the removal stage, the appeals go fairly quickly, 
but I know our attorneys are very exacting in wanting to make 
sure that every loophole is closed when we do remove an 
employee for performance; and it does take a lot longer than to 
remove an employee for misconduct, because you are required to 
give them an opportunity to improve.
    Mr. Lynch. Right. Right. I understand that. Okay, thank 
you.
    Ms. Niehaus. But, by and large, I think the majority of 
Federal employees are good employees. They come to work, they 
work hard. I know the people at Travis Air Force Base, the 
people at Corpus Christi, I toured that facility last year and 
met with a lot of them, they come to work to support the war 
effort; they come to work to support the military or the VA.
    Mr. Lynch. I appreciate that. Thank you. I am out of time.
    Mr. Cox, would you support pay-for-performance for members 
of Congress? I think our popularity is about 4 percent right 
now. I think that a lot of Americans would like to see Congress 
put on a pay-for-performance standard as well. I am not going 
to force you to answer.
    Mr. Cox. I will yield that to the American public.
    Mr. Lynch. Okay. Thank you.
    Lastly, I just want to ask unanimous consent if we could 
enter into the record this report addressing poor performers in 
the law. It is a report to the President and the Congress of 
the United States by the U.S. Merit Systems Protection Board.
    Mr. Farenthold. Without objection, so ordered.
    We have a copy.
    Mr. Lynch. All right. Thank you, sir.
    I yield back.
    Mr. Farenthold. Thank you very much.
    I would like to thank our witnesses for participating. Your 
input has been very helpful. Hopefully we will continue to make 
some progress on this and Congress will be able to perform on 
this one.
    Again, thank you, and we stand adjourned.
    [Whereupon, at 11:30 a.m., the subcommittee was adjourned.]










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