[Senate Hearing 113-507]
[From the U.S. Government Publishing Office]


-



                                                        S. Hrg. 113-507


  A MORE EFFICIENT AND EFFECTIVE GOVERNMENT: CULTIVATING THE FEDERAL 
                               WORKFORCE

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

                                HEARING

                               before the

                   SUBCOMMITTEE ON THE EFFICIENCY AND
                   
      EFFECTIVENESS OF FEDERAL PROGRAMS AND THE FEDERAL WORKFORCE

                                 of the

                              COMMITTEE ON
                              
                         HOMELAND SECURITY AND
                         
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 6, 2014

                               __________

         Available via the World Wide Web: http://www.fdsys.gov

       Printed for the use of the Committee on Homeland Security
                        and Governmental Affairs
                 

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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                  THOMAS R. CARPER, Delaware Chairman
CARL LEVIN, Michigan                 TOM COBURN, Oklahoma
MARK L. PRYOR, Arkansas              JOHN McCAIN, Arizona
MARY L. LANDRIEU, Louisiana          RON JOHNSON, Wisconsin
CLAIRE McCASKILL, Missouri           ROB PORTMAN, Ohio
JON TESTER, Montana                  RAND PAUL, Kentucky
MARK BEGICH, Alaska                  MICHAEL B. ENZI, Wyoming
TAMMY BALDWIN, Wisconsin             KELLY AYOTTE, New Hampshire
HEIDI HEITKAMP, North Dakota

                  Gabrielle A. Batkin, Staff Director
               John P. Kilvington, Deputy Staff Director
               Keith B. Ashdown, Minority Staff Director
                     Laura W. Kilbride, Chief Clerk
                   Lauren M. Corcoran, Hearing Clerk


 SUBCOMMITTEE ON THE EFFICIENCY AND EFFECTIVENESS OF FEDERAL PROGRAMS 
                       AND THE FEDERAL WORKFORCE

                     JON TESTER, Montana, Chairman
MARK L. PRYOR, Arkansas              ROB PORTMAN, Ohio
CLAIRE McCASKILL, Missouri           RON JOHNSON, Wisconsin
MARK BEGICH, Alaska                  RAND PAUL, Kentucky
TAMMY BALDWIN, Wisconsin             MICHAEL B. ENZI, Wyoming
HEIDI HEITKAMP, North Dakota

                 Tony McClain, Majority Staff Director
                 Brent Bombach, Minority Staff Director
                       Kelsey Stroud, Chief Clerk
                       
                            C O N T E N T S

                                 ------                                
Opening statement:
                                                                   Page
    Senator Tester...............................................     1
    Senator Portman..............................................    11
    Senator Heitkamp.............................................    15

                               WITNESSES
                          Tuesday, May 6, 2014

Hon. Katherine Archuleta, Director, U.S. Office of Personnel 
  Management.....................................................     4
Hon. Carol Waller Pope, Chairman, Federal Labor Relations 
  Authority......................................................     5
Jeri L. Buchholz, Assistant Administrator for Human Capital 
  Management, National Aeronautics and Space Administration......     7
Paige Hinkle-Bowles, Deputy Assistant Secretary of Defense for 
  Civilian Personnel Policy, U.S. Department of Defense..........     9
J. David Cox Sr., National President, American Federation of 
  Government Employees...........................................    25
Colleen M. Kelley, National President, National Treasury 
  Employees Union................................................    27
Carol A. Bonosaro, President, Senior Executives Association......    29
Max Stier, President and Chief Executive Officer, Partnership for 
  Public Service.................................................    30

                     Alphabetical List of Witnesses

Archuleta, Hon. Katherine:
    Testimony....................................................     4
    Prepared statement...........................................    43
Bonosaro, Carol A.:
    Testimony....................................................    29
    Prepared statement...........................................    83
Buchholz, Jeri L.:
    Testimony....................................................     7
    Prepared statement...........................................    54
Cox, J. David Sr.:
    Testimony....................................................    25
    Prepared statement...........................................    64
Hinkle-Bowles, Paige:
    Testimony....................................................     9
    Prepared statement...........................................    57
Kelley, Colleen M.:
    Testimony....................................................    27
    Prepared statement...........................................    76
Pope, Carol Waller:
    Testimony....................................................     5
    Prepared statement...........................................    51
Stier, Max:
    Testimony....................................................    30
    Prepared statement...........................................    92

                                APPENDIX

Information submitted by Mr. Stier...............................   102
Federal Law Enforcement Officers Association, prepared statement.   109
National Education Association, prepared statement...............   111
Presidential Management Fellow, prepared statement...............   114
Responses to post-hearing questions for the Record:
    Ms. Archuleta................................................   117
    Ms. Buchholz.................................................   120
    Ms. Hinkle-Bowles............................................   123

 
                     A MORE EFFICIENT AND EFFECTIVE

             GOVERNMENT: CULTIVATING THE FEDERAL WORKFORCE

                              ----------                              


                          TUESDAY, MAY 6, 2014

                                 U.S. Senate,      
        Subcommittee on the Efficiency and Effectiveness of
                Federal Programs and the Federal Workforce,
                      of the Committee on Homeland Security
                                        and Governmental Affairs,  
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:45 p.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Jon Tester, 
Chairman of the Subcommittee, presiding.
    Present: Senators Tester, Begich, Heitkamp, and Portman.

              OPENING STATEMENT OF SENATOR TESTER

    Senator Tester. Good afternoon. Thank you all for being 
here. There are several coming, including Ranking Member 
Portman, but it is great to have the folks from both panels 
here today. I appreciate the opportunity. I call to order this 
hearing of the Subcommittee on Efficiency and Effectiveness of 
Federal Programs and the Federal Workforce.
    Today's hearing is titled, ``A More Efficient and Effective 
Government: Cultivating the Federal Workforce.'' We have 
assembled two great panels of witnesses today. I want to thank 
you for joining us to share your perspectives on this important 
issue.
    A lot of folks in Washington like to demand an efficient 
and effective Federal Government, but you would never know it 
judging by the way they often treat the Federal workers. 
Instead of investing in new initiatives that allow agencies to 
better recruit, cultivate, and retain a quality and experienced 
Federal workforce, it seems that more and more politicians use 
these folks as a punching bag when the budget season rolls 
around. Retirement benefits are targeted. Pay and hiring 
freezes are instituted. Training and travel budgets are zeroed 
out. And then along comes a sequester, followed by a government 
shutdown.
    For some folks, sequestration and the shutdown were about 
scoring political points. For others, they were opportunities 
to shake their heads and bemoan the state of affairs here in 
Washington, D.C. For Federal workers, sequestration and the 
shutdown kept them from work and threatened their livelihoods. 
Equally as damaging, it implied that their work is not 
essential. Well, guess what. We all know that is not true. 
Federal workers did not cause our budget problems and they 
should not be the scapegoats for those trying to score 
political points. Sequestration and the shutdown never should 
have happened because they sent the wrong message about the 
value of public service.
    The Federal workforce is not a faceless or nameless group 
of folks showing up simply to get a check every day. It is the 
nurse working late every night, sometimes shuttling back and 
forth between Veterans Affairs (VA) facilities and buildings in 
Helena some 240 miles one way to ensure that the shifts are 
covered and that our veterans receive the quality care that 
they have earned and deserve. Or, it is the Farm Service Agency 
loan officer working closely with farmers to ensure that they 
are making informed decisions for them, their family, and their 
business. It is the Border Patrol Agent covering hundreds of 
miles of dangerous terrain along the Northern border in the 
dead of night, working to ensure that our borders are secure 
and our citizens and communities are safe. It is the Park 
Ranger taking the time to educate school children about 
wildfires and who, when the fire season starts up again, risks 
his life to protect our homes and our forests. These men and 
women and countless others should be recognized for how hard 
they work on our behalf.
    If we truly seek an effective and efficient government, we 
need to ensure that Federal workers are able to make a living 
doing their jobs and we need to ensure that they have 
opportunities to grow and feel valued in their jobs. It is 
discouraging to see recent studies depicting low morale at many 
Federal agencies. Governmentwide Federal employee job 
satisfaction rates are at an all-time low.
    Today's hearing will discuss the challenges before us, 
highlight agency and governmentwide successes, and seek to 
identify smart solutions that keep the Federal workplace 
dynamic and rewarding.
    Our first panel today will provide the agency perspective 
on these issues and our second panel will provide the 
perspective of the employee. I look forward to the discussion. 
I again thank everybody for being here.
    Senator Portman will be here shortly, and Senator Heitkamp 
will, too, and there may be others that show. When Senator 
Portman gets here, we will do his opening statement. What I am 
going to do right now is I am going to introduce the first 
panel of witnesses.
    We are fortunate to have assembled two great panels of 
witnesses. The first consists of Federal agencies, both large 
and small, who will share their perspective on Federal 
workforce issues.
    Katherine Archuleta is the Director of the Office of 
Personnel Management (OPM), and I was pleased to preside over 
Katherine's nomination hearing last year and have been 
impressed with her leadership that she has brought to that 
agency. One of OPM's chief tasks is to build a Federal 
workforce that is innovative, diverse, and versatile. Today, we 
discuss some of the policies and initiatives implemented by 
OPM, highlight its successes, and discuss some of its 
challenges moving forward. And, I want to welcome you, 
Katherine, to the Committee hearing today.
    Carol Waller Pope is the Chairman of the Federal Labor 
Relations Authority (FLRA). I also had the privilege of 
presiding over Carol's nomination hearing and have been very 
appreciative of her leadership at FLRA. In recent years, FLRA 
has made significant strides in improving workforce morale and 
job satisfaction rates. Today, Carol will share some of FLRA's 
lessons learned and provide the perspective of a smaller agency 
in tackling various workforce issues. Welcome to you, Carol.
    We also have Jeri Buchholz. Now, I have to tell you, as a 
sidebar, and I told my staff this, we have some folks in my 
hometown who spell the name the same way, but it is pronounced 
``Boo-holse.'' But, we are going to call you ``Buck-holse.'' 
Hopefully, that is correct. Jeri is Assistant Administrator for 
Human Capital Management at the National Aeronautics and Space 
Administration (NASA). For the second year in a row, NASA has 
been selected as the ``Best Place to Work in Government.'' 
These rankings are compiled from employee feedback on job and 
agency satisfaction and whether employees recommend their 
agency as a good place to work. Today, we hope Jeri will let us 
in on NASA's secret and share some of the initiatives that have 
allowed the agency to achieve such high rates of employee 
satisfaction. Welcome, Jeri.
    And then we have Paige Hinkle-Bowles, who is the Deputy 
Assistant Secretary of Defense for Civilian Personnel Policy. 
At the Defense Department (DOD), Paige is responsible for 
civilian workforce development and sustainment, performance 
management, and leader development. The policy she helps 
develop and carry out ultimately impact more than 900,000 
civilian defense employees worldwide. Welcome, Paige.
    It is our custom to swear all witnesses who appear before 
the Subcommittee, so if you do not mind, please stand and 
answer in the affirmative or the negative, whichever applies to 
you.
    Do you swear that the testimony you will give before this 
Subcommittee will be the truth, the whole truth, and nothing 
but the truth, so help you, God?
    Ms. Archuleta. I do.
    Ms. Pope. I do.
    Ms. Buchholz. I do.
    Ms. Hinkle-Bowles. I do.
    Senator Tester. Let the record reflect that the witnesses 
answered in the affirmative.
    We are going to start with the testimony. Each of you have 
5 minutes for oral statements. Please summarize your statements 
as much as possible. Please stick as close to the 5-minutes as 
you possibly can. You folks have been here before. You know how 
it goes. Know that your complete written testimony will be 
included in the record.
    With that, Katherine, would you please get us started.

 TESTIMONY OF THE HON. KATHERINE ARCHULETA,\1\ DIRECTOR, U.S. 
                 OFFICE OF PERSONNEL MANAGEMENT

    Ms. Archuleta. Thank you, Chairman Tester and Members of 
the Subcommittee, thank you for allowing me the opportunity to 
appear before you today to discuss the state of the Federal 
workforce.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Archuleta appears in the Appendix 
on page 43.
---------------------------------------------------------------------------
    This week, we celebrate Public Service Recognition Week to 
recognize the service of Federal employees. Those who have 
answered the call of public service and especially those who 
have given their lives deserve our gratitude for their 
contributions to our country.
    Circumstances such as the 3-year pay freeze, sequestration, 
the government shutdown, and reductions in budgets have 
presented serious challenges to our Federal workforce. One of 
my top priorities as the Director of OPM is to enhance employee 
satisfaction and engagement. In our strategic plan, one of 
OPM's goals is to provide leadership to help agencies create 
inclusive work environments where a diverse Federal workforce 
is fully engaged and energized to put forth its best effort, 
achieve its agency's mission, and remain committed to public 
service.
    I am working closely with the Chief Human Capital Officers 
(CHCO) Council, the Office of Management and Budget (OMB), the 
National Council on Federal Labor-Management Relations, and 
agency leaders to address employee satisfaction and engagement. 
One tool that measures employee satisfaction and engagement is 
the Federal Employment Viewpoint Survey (FEVS). The survey is 
designed to provide agencies with valuable information on 
employee satisfaction, commitment, engagement, and retention.
    The 2013 FEVS governmentwide results reveal that more than 
80 percent of the Federal employees who responded like the work 
they do and understand how their work relates to their agency's 
goals and priorities. However, there were decreases in all four 
human capital indices as well as in employee engagement and 
global satisfaction.
    OPM is committed to working with agencies to provide the 
tools needed to improve employee satisfaction and engagement. 
To assist agencies, we have developed an online tool which 
provides data for agencies to use in order to better understand 
their FEVS results. That data is being used by managers and 
supervisors across government to improve employee engagement 
and to identify best practices and processes that lead to 
progress.
    The President's Management Agenda will also facilitate a 
more effective and efficient government that is supportive of 
economic growth. One of the four pillars of the Management 
Agenda is people and culture, where OPM plays a pivotal role. 
OPM believes that an engaged, inclusive, and diverse Federal 
workforce is critical to the Federal Government's success.
    In seeking to create a culture of excellence and engagement 
to enable higher performance, three initiatives have been 
identified: GovConnect, to help all agencies test and scale 
talent exchange; GovU, an enterprise learning and development 
resource exchange which is modeled after our own Human 
Resources University (HRU); and a third initiative, to develop 
a data dashboard to drive improvements to engagement in 
government operations.
    A first class Federal workforce requires strong investments 
in civil service leadership, and to that end, we are working 
with agencies to strengthen a senior executive service (SES)-
wide leadership and engagement training curriculum.
    Finally, at a time when agencies are dealing with smaller 
budgets, fewer hiring decisions, and less experienced human 
resources expertise, it becomes more critical than ever that 
agencies find the best talent possible. OPM is committed to 
working with agencies to reduce skills gaps, foster diversity 
in Federal employment, and improve organizational outcomes.
    Despite all the challenges, there is cause for optimism. 
Survey results show that Federal employees continue to be 
committed to serving the American people. Over 90 percent of 
FEVS respondents reported the work they do is important, that 
they constantly look for ways to do their jobs better, and that 
they are willing to put an extra effort in to get the job done.
    The survey reflects what I hear from Federal workers as I 
travel across the country to meet with them. Time and time 
again, whenever I ask the question, why do you do what you do, 
the answer is almost always the same, ``Because I feel a 
commitment to my work and to the services I provide for the 
American people.'' That is why each of us is here today.
    I want to thank you for the opportunity to testify, and I 
am happy to address any questions you may have.
    Senator Tester. Well, thank you, Katherine. I appreciate 
your comments. There absolutely will be questions. Thank you 
for your testimony.
    Ms. Archuleta. Thank you.
    Senator Tester. Carol, you may proceed.

 TESTIMONY OF THE HON. CAROL WALLER POPE,\1\ CHAIRMAN, FEDERAL 
                   LABOR RELATIONS AUTHORITY

    Ms. Pope. Good afternoon. I want to thank the Committee 
and, in particular Senators Tester and Portman, for conducting 
this hearing on a subject that is near and dear to my heart--
attracting, engaging, and retaining a first-class, diverse 
workforce for the Federal Government.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Pope appears in the Appendix on 
page 51.
---------------------------------------------------------------------------
    I have been in public service as a part of the Federal 
workforce my entire professional career--starting as a career 
employee, and thanks to this Committee and President Obama, as 
a Presidential appointee. When I began working as a General 
Schedule (GS)-9 Staff Attorney at the Department of Labor 
(DOL), the idea of being the Federal Labor Relations Authority 
(FLRAs) Chairman was not even a dream. Serving as Chairman is 
an honor beyond measure, and I believe that my story speaks to 
employee engagement, succession planning, and a commitment to 
mission performance. I salute all career Federal employees who 
are on a similar professional journey for their public service.
    Before addressing our efforts to cultivate the FLRA's 
internal workforce, I would like to talk about the FLRA's 
mission. The FLRA exists to promote stable, constructive labor-
management relationships throughout the Federal Government and 
to resolve disputes in a manner that contributes to an 
effective and efficient government. That is, our customers are 
the management and labor components of the Federal workforce. 
This means that day in and day out, our employees are working 
to assist other Federal employees, whether management or 
labor--to accomplish the work of the government in a way that 
enhances mission performance and, we hope, employee engagement 
and satisfaction.
    While the FLRA's business is assisting other Federal 
agencies and unions, I am here to address our efforts to engage 
the FLRA's workforce in order to improve our mission 
performance and our employee satisfaction.
    With the collaborative efforts of the FLRA's senior 
leadership and career employees at all levels, we have achieved 
nearly unprecedented improvements in employee morale over the 
last 5 years. To set the stage, in 2008, the FLRA was not only 
at the bottom of employee-satisfaction rankings for small 
agencies, it was below the bottom. That is right, below the 
bottom. In 2008, the Partnership for Public Service (PPS) 
excluded the FLRA's scores on the Employee Viewpoint Survey 
from the small-agency calculations because the FLRA's scores 
were so low they skewed the ranking of other agencies. We 
busted the curve in the wrong direction.
    The next time the survey was conducted, 2010, the FLRA 
showed a 250 percent improvement in employee satisfaction and 
an over-400 percent increase in effective leadership. I am told 
that the statisticians assumed there was a mistake and triple-
checked their calculations, but there was no mistake. The FLRA 
moved from last place to 20th in the small-agency rankings with 
a still unbeaten 250 percent increase in overall employee 
satisfaction. Again, the FLRA busted the curve, but this time 
in the right direction. We are still moving forward. We were 
No. 7 in the overall rankings in 2011, and with the decrease 
overall in government rankings, as Director Archuleta referred 
to, we were No. 8 in 2012 and 2013.
    So, what exactly did we do to achieve these results? I 
believe it is that FLRA employees and leadership undertook 
sincere, sustained efforts to focus on the core values of 
transparency and accountability. And we focused on mission 
accomplishment. These were not pro forma efforts. They were 
real and substantive, and they began with recognition that, 
from top to bottom and side to side, FLRA employees are deeply 
committed to the mission of the agency and the work that they 
perform.
    FLRA's leadership clearly communicated its belief that 
employees did important work and did it well. This resonated 
with employees. It probably contributed to that difficult to 
describe synergy that occurs when employees start to feel 
valued. One of the tangible things, increasing our 
communication. We embraced the ideas of revitalization, 
reinvention, and reengagement, both as to our customers and our 
employees. We started a weekly newsletter. We started to ask 
for employee involvement and input with respect to how to 
improve our mission performance, how to improve employee 
satisfaction.
    We took the survey results seriously and we drilled down 
and conducted, using our labor-management forum, our own 
internal survey. To the extent one of our challenges was 
employees feeling under-resourced and overworked, we directed 
resources not only to ask employees what resources were they 
lacking, but also to engage employees in how we could improve 
the work-life balance. And with that initiative and under the 
directive of OPM, we initiated telework, and I am happy to say 
80 percent of our employees telework in some form or fashion.
    Simply stated, we learned that successful efforts are 
multi-year and multi-pronged. I was mistaken in 2009, my first 
year as Chairman, when I announced it was the Year of the FLRA 
Employee. My mistake was that every year should be the year of 
the employee, not a single year. Long-term support of and 
engagement with our employees resulted in improved efficiencies 
and mission performance. I am happy to say that not only with 
regard to employee satisfaction: we reduced case backlogs, and 
we improved timeliness and quality of our work. And I think 
that is what made the difference with respect to employees, 
from a low in 2008, saying the FLRA was not a place that they 
would recommend to their friends to work, to a very different 
outcome now.
    So, I am pleased to answer any questions you might have. I 
look forward to this discussion. I would like to continue our 
work, because I realize there is more work to be done. While we 
have improved our mission performance, I know that I am not 
satisfied. I did not come back as Chairman to burrow in and 
stay at the level of satisfaction and mission performance that 
we are now. So, I look forward to your questions and to 
learning from the other panelists with respect to their 
successes and lessons learned.
    Senator Tester. Well, thank you for your testimony, Carol, 
and thank you for your perspective. I think there always needs 
to be room for improvement and we always need to take advantage 
of that opportunity.
    Jeri, you are going to let us in on the secrets of NASA. 
You may proceed.

 TESTIMONY OF JERI L. BUCHHOLZ,\1\ ASSISTANT ADMINISTRATOR FOR 
   HUMAN CAPITAL MANAGEMENT, NATIONAL AERONAUTICS AND SPACE 
                         ADMINISTRATION

    Ms. Buchholz. Chairman Tester, Ranking Member Portman, and 
Members of the Subcommittee, thank you for the opportunity to 
testify today on the topic of employee morale and productivity 
in the Federal workforce.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Buchholz appears in the Appendix 
on page 54.
---------------------------------------------------------------------------
    At NASA, employee morale and productivity begin with a 
unique and exciting mission. Our orbiting outpost, the 
International Space Station, is home to a crew of astronauts 
from America and across the world who are conducting research 
and learning how to live and work in space. We have scientists 
exploring with robotic spacecraft that are probing diverse 
regions of the solar system and the vast regions of 
interstellar space. We will soon launch the James Webb Space 
Telescope, which will allow our astrophysicists to see back in 
time to the formation of the first stars and galaxies. Our 
people are developing the aeronautics and space technologies 
for tomorrow's missions, and we are preparing for a challenging 
mission to capture and redirect an asteroid for human 
exploration--a stepping stone to future human exploration of 
Mars.
    NASA is comprised of 35,000 contractors, 18,000 employees, 
149 occupations, 10 centers, and one goal, to reach for new 
heights and reveal the unknown for the benefit of humankind. 
But, like any other large and complex organization, NASA faces 
management challenges in ensuring that we continue to engage 
our workforce and create a culture of innovation. Today, I 
would like to share with you three components of NASA's 
strategy to address these challenges.
    First, we focus on connecting people to each other and the 
mission every day. Connection begins at the top. The NASA 
Administrator, Charlie Bolden, fundamentally believes that 
communication is the cornerstone to connection. He encourages 
every NASA staffer to use his or her voice. He visits employees 
in their labs and at their worksites to talk to them directly 
about their work and their work life. The Administrator 
personally reviews the results of the Employee Viewpoint 
Survey, an annual survey administered by the U.S. Office of 
Personnel Management to Federal employees, down to the Center 
level so he can understand how we are doing as an agency and 
how we are doing in each major subcomponent.
    To make people more connected to each other, we are working 
hard to make geography inconsequential. We have made great 
improvements in effective virtual collaboration. We are able to 
conduct acquisition activities, panel interviews, international 
presentations, whole conferences in virtual space. This has 
become an integral part of NASA culture.
    Second, we ensure that first-line supervisors appreciate 
the importance of developing innovative employees. A key to 
success in all areas of workforce culture is the first-line 
supervisor. We infuse our leadership values into potential 
leaders early in their careers. We have agency-level leadership 
development programs as well as leadership development programs 
at the Center level. These programs have a heavy emphasis on 
personal effectiveness, relating to others, and self-
reflection. Approximately 500 NASA employees have gone through 
these programs.
    Third, we recognize and reward innovative performance by 
moving past traditional monetary recognition. We use every tool 
that is available to us as a Federal employer to recognize our 
employees and their achievements, and we ask our employees to 
tell us what kinds of rewards they find most meaningful. 
Ultimately, however, there is no greater incentive to 
innovation than to have one's creativity recognized and 
incorporated into the NASA mission, and there is no greater 
pride than being able to describe one's contributions to the 
public. We encourage our employees to do so through a variety 
of means, including social media.
    We are engaged in a constant search for better ways to 
work. We model the behaviors that we expect from others. Over 
the past year, we have worked to reinforce these principles by 
asking each senior NASA leader to engage in a reverse mentoring 
relationship, to be mentored by a junior employee in the agency 
on a topic of his or her choice. This was a tremendously 
successful program that gave NASA senior leadership the 
opportunity to walk a mile in another's shoes.
    In sum, we have a robust NASA strategy to engage our 
workforce and create a culture of innovation. We do this by 
connecting our workforce to each other and the mission, by 
building model supervisors, and by recognizing and rewarding 
innovative performance. All of these efforts have paid off. We 
were not satisfied when NASA was rated the ``Best Place to 
Work'' in 2012, we continued to improve and were rated the 
``Best Place to Work'' and Most Improved in 2013.
    Mr. Chairman, I thank you for the opportunity to be up here 
before you and I would be pleased to respond to any questions.
    Senator Tester. I appreciate your testimony Jeri, and there 
will be questions, so thank you very much.
    Last but not least, Paige, you are up to bat. Tell us about 
the DOD.

TESTIMONY OF PAIGE HINKLE-BOWLES,\1\ DEPUTY ASSISTANT SECRETARY 
 OF DEFENSE FOR CIVILIAN PERSONNEL POLICY, U.S. DEPARTMENT OF 
                            DEFENSE

    Ms. Hinkle-Bowles. Thank you. Chairman Tester, Ranking 
Member Portman, and Members of the Subcommittee, on behalf of 
the Acting Under Secretary of Defense for Personnel and 
Readiness, thank you for the opportunity to appear at today's 
hearing.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms Hinkle-Bowles appears in the 
Appendix on page 57.
---------------------------------------------------------------------------
    The Department shares the Subcommittee's focus on achieving 
a more efficient and effective government and we are wholly 
committed to the readiness, capability, and efficiency of our 
total force to accomplish the Department's mission. Our people, 
to include our valued Federal civilian workforce, are a central 
element of the Department's ability to serve the Nation. Our 
900,000 civilians are employed in more than 600 occupations in 
over 3,000 locations, to include nearly 100 foreign countries 
and territories around the world. The past few years have been 
challenging for the Department. However, our civilian employees 
continue to demonstrate resilience and a staunch commitment to 
the Department's mission even during these challenging times.
    One of the more recent high-profile impacts on the 
workforce was the administrative furlough of the majority of 
our civilian employees last year. As one means to garner 
savings to meet sequestration mandates, we applied furlough 
actions in a consistent and equitable manner with few 
exceptions.
    In reviewing the 2013 results of the Office of Personnel 
Management's annual Federal Employee Viewpoint Survey, we 
confirmed that the morale of the Department's civilian 
workforce had been declining prior to the implementation of the 
furloughs, likely attributable to continued pay freezes and 
limited budgets. Survey responses indicated that our 
workforce's satisfaction with pay, opportunities for growth and 
advancement, and the resources available to get the job done 
have declined from previous years. However, the results also 
showed that the Department continues to be strong in the areas 
of personal commitment to achieving the mission, looking for 
ways to do the job better, as well as work-life balance and job 
satisfaction. These survey results provide the Department's 
leadership with valuable information and we are committed to 
addressing workforce concerns.
    We continue our comprehensive Strategic Workforce Planning 
(SWP) efforts, which cover nearly 93 percent of the civilian 
population and include strategies carried out by 22 functional 
communities. These strategies involve direct contact and 
interaction with civilian employees in the advancement of 
career broadening opportunities, enhancement of training and 
credentialing programs, and development of employee career 
mapping.
    We also note that approximately 13 percent of the 
Department's civilian employees are currently eligible to 
retire, and we anticipate that 30 percent of our civilian 
workforce will be eligible to retire within the next 5 years. 
We are closely monitoring these trends, recognizing the 
potential loss of critical skills and knowledge. To mitigate 
long-term consequences, we continue to use available resources 
and authorities to hire into critical skills. We also continue 
to lead the Federal Government in new veteran hires, retaining 
their capability and valuable skill sets within the Department. 
Our strategic workforce planning and recruitment efforts help 
us achieve an optimal balance among our varied hiring sources.
    Additionally, the National Defense Authorization Act (NDAA) 
for fiscal year (FY) 2010 directed the Department to design and 
implement a new performance management system and authorized 
flexibilities relating to appointments. Following the 
comprehensive efforts of three design teams comprised of union 
and non-union DOD employees called New Beginnings, the 
Department endorsed the vast majority of the design team's 
recommendations for the new system.
    In cooperation with the Department's national-level unions, 
we are developing a new performance appraisal system which will 
include a multi-level rating pattern that links performance 
expectations to mission and organizational goals and that 
ensures regular feedback during the appraisal cycle between the 
employees and rating officials. We believe such a system is 
critical to effective mission accomplishment, as well as 
increased employee morale and effectiveness.
    I offer in closing that the Department values the work that 
our civilians perform in support of our military. We recognize 
their commitment to getting the job done, even during these 
challenging times. We appreciate this year's 1 percent pay 
increase that brought the 3-year pay freeze to an end and the 
ability to once again pay performance awards to our high-
performing workforce. Going forward, the Department is engaging 
in shaping our civilian workforce to increase efficiencies, 
ensuring the workforce is motivated and has the skills needed 
for the future.
    We thank you for your continued interest and support of the 
DOD's civilian workforce. I look forward to your questions.
    Senator Tester. Paige, thank you very much.
    Senator Portman, I think what we will do is, because we can 
then get multiple rounds in, we will do 5 minutes, and Senator 
Portman, you may proceed.

              OPENING STATEMENT OF SENATOR PORTMAN

    Senator Portman. Great. Thank you, Mr. Chairman. I 
appreciate your having this testimony today. It was great to 
have some of our expert witnesses before us. Two of them, at 
least, went through our Subcommittee for their confirmations 
and were successful.
    I was the head of OMB at one point, the head of the United 
States Trade Representative (USTR) at one point, had the 
opportunity to work with a lot of members of our Federal 
workforce, and I came away with an impression that I think 
anyone in that position would have, which is we have a lot of 
really talented people in the Federal workforce who are there 
for the right reasons, committed to public service, work hard. 
They are focused on the mission and objective of the agency 
across different political parties and different 
administrations.
    I also had to experience what it is like to work under a 
tight budget, because we had tight budgets then, even tighter 
now. How do you boost morale and productivity, and I was 
interested in what NASA had to say today about that, because 
you guys have actually lived under some tighter budgets and yet 
you kept your morale up.
    But, the bottom line is that people are ultimately what 
matters the most, and how to promote that common mission to 
incentivize people to work hard toward that mission is 
critical. You talked about identifying and rewarding success 
today a little bit, and I think that is one of the key 
challenges in the Federal Civil Service System.
    We are dealing with a tougher budget. We are looking at $17 
trillion in debt right now and another budget deficit this year 
of probably over $500 billion, and the Congressional Budget 
Office (CBO) says it gets worse over the next 10 years, so this 
pressure is not going to go away. And the Federal workforce is 
expensive. I mean, it is about 26 percent of the total 
discretionary spending in 2012. So, we have to figure out how 
to deal with these tough fiscal times, again, that even get 
tougher going forward, and we have more and more pressure 
coming from the entitlement side and discretionary spending 
under more and more pressure.
    So, this is a very helpful hearing to talk about how do we 
do more with less, which is the goal, and how do we adapt and 
innovate and thrive and continue to attract great people.
    The challenges are out there. Ms. Hinkle-Bowles talked a 
little about DOD's challenge. Today, only 14 percent of the two 
million permanent career employees are eligible for retirement. 
Over the next 3 years alone, that number more than doubles, to 
31 percent. I think you said 30 percent at DOD. So, this is 
obviously an issue, of people retiring.
    Meanwhile, we are not attracting the young people that we 
should be, and I think the Federal workforce now has only 6 
percent under the age of 30. By comparison, in the private 
sector, it is about 23 percent. So, this begs the question, why 
is the Federal Government struggling to attract talented young 
people in particular?
    I appreciated hearing from NASA today and other witnesses 
about how do we manage our high-skilled science technology 
workforce? How do you recruit these folks? How do you retain 
them, given the fact that they often have better opportunities 
in the private sector, for our future military capabilities, 
for science and exploration, for dealing with cybersecurity, 
some of these really difficult technical problems. We have to 
figure out a way to show some flexibility, I believe, on the 
Federal workforce side.
    So, we have heard a variety of views from you all and I 
look forward to continuing after my round here with some 
questions.
    I will say on NASA, because NASA Glenn is in my home State 
of Ohio, 1 of the 10 facilities, I am very proud of the work 
that we have done there and I think it is an example of an 
agency that has managed, despite a decline in spending, to do 
very well in attracting and retaining people. Despite a decline 
of $1 billion in funding between 2010 and 2014, NASA ranks No. 
1 out of the 19 large agencies on the Partnership for Public 
Service's ``Best Places to Work'' in their 2013 survey. And you 
indicated that, that you have had some luck retaining folks.
    At NASA Glenn, we have 1,700 folks there. Funding has been 
tight, a 15 percent drop in funding in the last decade and 
plenty of challenges. But, people feel pretty good about 
working there. In fact, among the 10 centers, we have gone up 
to No. 5 in terms of the ``Best Place to Work.'' I will say 
that, again, we have challenges there, because we do have a lot 
of folks there who are near retirement age or qualifying for 
retirement in the next couple of years.
    So, again, I look forward to asking more questions in a 
moment and appreciate Chairman Tester holding this hearing, and 
I thank the witnesses for coming to share their views.
    Senator Tester. Thanks, Senator Portman.
    I have a few questions for you, Katherine, and then we will 
move down the line. From a historical perspective, where are we 
in the overall size of the Federal Government workforce?
    Ms. Archuleta. Well, sir, the number of employees continues 
to drop. We are a little over two million, and so that 
continues to hold pretty steady. We are looking at how we 
cannot only maintain those numbers with our limited resources, 
but also how do we grow that in the critical areas that are 
needed by departments and agencies.
    Senator Tester. So, where were we at 10 or 15 years ago? Do 
you----
    Ms. Archuleta. I am sorry, I do not know that number. I 
would be glad to get that for you.
    Senator Tester. That would be great. And then, I guess the 
next question would be, assuming that it is less, and I am sure 
it is, quite frankly----
    Ms. Archuleta. It is about 1.9, just--right around that 
number.
    Senator Tester. What has been used to fill the gap with 
fewer employees?
    Ms. Archuleta. The issues of how we fill the gap is making 
sure that we have trained the employees that we do have on 
board, making sure that they are able to do the work. We have 
had to make some obvious, decisions. Each manager makes 
decisions on how it will be able to continue to deliver its 
services with the number of employees that it has.
    I am very hesitant, Senators, and I am sure you are, to ask 
employees to do more with less. So, we are looking at where are 
the most important aspects of each mission that we have, and I 
think, as the other witnesses have testified, it really takes 
the leadership of each agency to determine what are the most 
important aspects to fulfill its mission needs. And so those 
decisions are made at the leadership level. We try to work very 
closely with each of the departments and agencies to make sure 
that they have the skills available to them.
    Senator Tester. This is for Katherine, but any of you can 
answer it if you have an answer for it--several of you talked 
about the government shutdown, pay freezes. Have these events, 
or are there other ones you could add to the list--the 
sequestration, potentially--have they impacted recruitment and 
retention, No. 1? And, No. 2, what have you done to mitigate it 
if they have? Let us start with you, Katherine.
    Ms. Archuleta. Well, certainly, the impact of pay freezes, 
sequestration, furloughs is on the front page of many 
newspapers across the country and certainly has its impact on 
how we recruit. However, I would say, Senator, that when I go 
out about the country, there is still a strong interest in 
public service.
    Senator Tester. Good. All right. Katherine--does anybody 
else want to answer that? I mean, have you had any?
    The application process for somebody who wants to look for 
a career, I will tell you the complaints, you tell me if it has 
changed. The complaint is, you will apply for a job and it may 
be months--or longer--before you hear back that there is any 
interest. You get a call. You may or may not have already found 
a different job by then. You probably have. We may be missing 
out on some good personnel. What does the current process look 
like? How long does it take, on average? And, is there anything 
we are doing to shut that down?
    I can tell you that, in my office, when we look for a 
person, we usually have this thing done within 10 days to 2 
weeks, because if we do not hire them, then Portman or Heitkamp 
will hire them before I get a chance to. So, I have to get them 
quick, OK. [Laughter.]
    So, what does the process look like? What are we doing to 
speed that process up? And I would talk to the others on that, 
too, when you are talking about hiring.
    Ms. Archuleta. Sure.
    Senator Tester. Go ahead, Katherine.
    Ms. Archuleta. Thank you, Senator. This is a topic that you 
and I are very concerned about and I welcome the opportunity to 
talk not only about it today, but after.
    The USAJobs portal is a very important one. All jobs for 
the Federal Government are posted there and applications flow 
through there. One of the concerns you expressed to me, as did 
other Members of this Committee, is how efficient and how 
effective is it, and I am pleased to tell you that in the last 
6 months, I have been focused in on USAJobs and we are looking 
at it from a lot of different perspectives.
    First of all, the application process. As the applicant 
goes into USAJobs, indeed, what does it take to get their 
resume through it? And as that application flows through the 
process, I am looking at each spot that their application 
touches. I am involving in that discussion not only the hiring 
managers, to make sure that we have the right information on 
USAJobs, but also taking a look at it through our information 
technology (IT) experts to make sure that, in fact, at each 
point, that there is not some IT issue that prevents us from 
getting that information to USA Staffing and then on to hiring 
managers.
    I can assure you that we are looking at it step by step. We 
are trying to untie all those knots, because I am as concerned 
as you are that it takes that long.
    Senator Tester. Right. Carol, you have a fairly small 
agency. What is your hiring timeline?
    Ms. Pope. We have been successful in reducing it by using 
alternative sources to assist our Human Resources office, such 
as OPM. We do not have a problem with recruitment, given the 
economy.
    Senator Tester. Right.
    Ms. Pope. If we post for an attorney entry-level job, we 
get hundreds of applicants nationwide.
    Senator Tester. Yes.
    Ms. Pope. But, we have looked to reduce the amount of time 
it takes to bring someone on board, and we have been successful 
on that where we have the smaller H.R. office----
    Senator Tester. Yes.
    Ms. Pope. And we have made it a priority, initially, when 
we had a lot of vacancies, to staff up H.R. first, because we 
realized that was a linkage to bringing on a talented, diverse 
workforce.
    Senator Tester. So, you have reduced it by how much?
    Ms. Pope. We were not hiring----
    Senator Tester. Right.
    Ms. Pope [continuing]. So we do not have a good track 
record with how long it took us to hire, because for a long 
time, we were not filling vacancies. But, we are now successful 
with respect to 4 to 6 weeks, depending on the job.
    Senator Tester. Jeri, do you want to talk about NASA?
    Ms. Buchholz. We have been working really hard to 
streamline our hiring process using information technology and 
systems. We have an issue of abundant workload when we put out 
a vacancy announcement.
    Senator Tester. Right.
    Ms. Buchholz. NASA is ranked No. 1 in a study by Universum 
as the ideal employer for engineers, outscoring Apple and 
Google and all other high-tech employers. So, when we put out a 
vacancy announcement, lots and lots and lots of people apply. 
So, one of the things that we are having to manage is very 
large workload volume, and so we use our systems to do that. We 
have brought our average hiring time to about 90 days, but 
certain occupations take much longer. For example, astronauts 
take a much longer period.
    Senator Tester. Got you. I got you on that, and they 
probably should. [Laughter.]
    Paige, do you want to talk about the civilian workforce at 
DOD.
    Ms. Hinkle-Bowles. Yes, sir. Our DOD-wide average time to 
hire is about 74 days across the entirety of DOD. We do that by 
using direct hire authorities, Schedule A hiring authorities, 
other special authorities that we have to reach particular 
occupations. As I mentioned earlier, we also do very robust 
veteran hiring. In our last 6 months of hiring, 53 percent of 
our new hires were veterans----
    Senator Tester. That is good.
    Ms. Hinkle-Bowles [continuing]. So, that is a great talent 
pool to pull from.
    Senator Tester. Well, I would hope we would work to make it 
as lean and mean as possible to get it down. Senator Heitkamp.

             OPENING STATEMENT OF SENATOR HEITKAMP

    Senator Heitkamp. Thanks so much, Senator Tester.
    I am just going to read off a list of agencies here: Social 
Security (SSA), Department of Interior (DOI), DOD Civilian 
Defense, Federal Law Enforcement, Tribal Social Workers, Bureau 
of Indian Affairs (BIA), Farm Service Agency (FSA), Forest 
Service. All of these people call me and complain. Because they 
do not get paid enough to live in my State.
    It has been enormously frustrating. You could read any 
number of reports, from listening to statements that Williston, 
North Dakota, has a higher rent schedule than New York City. 
But yet you all have been slow to respond. Well, obviously, 
NASA is not present in North Dakota and you do not have a 
presence, but I think the Federal Government has been 
incredibly slow, and the consequences of that has been really 
threefold.
    No. 1, people leave, and when people leave, it costs you 
money and time to recruit. It costs you money to train. And, a 
lot of times, you cannot replace that worker. And I will tell 
you, I have Farm Service Agencies in North Dakota that have had 
vacancies for not just months, but almost years, and we have a 
new farm bill we need to implement. No people. And I know that 
a lot of these agencies have contacted both, Paige, your 
organization, and, Katherine, yours, begging to get some 
attention to this problem, because we cannot continue to not 
serve the public.
    Now, I would tell you, ironically, some of the biggest 
complainers about not having a workforce out there are the 
industries that you serve, whether it is an oil field company 
that needs a permit to do something, or whether it, in fact, is 
a contractor who needs to be able to hire people to operate on 
the air base.
    And so this is not make believe in North Dakota. This is 
real. And the civilian workforce, not just in Minot, but also 
in Grand Forks, as you know very well, Katherine, has huge 
problems in recruitment and retention in North Dakota.
    So, the inability of us to respond to the needs of the 
Federal workforce has, in fact, stymied development, and I will 
give you an example. Not getting people at the Bureau of Land 
Management (BLM), not getting people at BIA, has meant that 
rigs have moved off the reservation, where people clearly could 
use those resources. They have moved off the reservation and 
they are going someplace else where they do not need to deal 
with a Federal agency.
    I do not think we can fix this problem today, but I think 
it is critically important that you guys start paying attention 
to what is happening in North Dakota to the Federal workforce, 
because this is not make believe. I think Senator Tester would 
join me as we look at building out Federal law enforcement to 
meet the needs. The corner of his State in Northeast Montana is 
affected exactly the same way.
    I would like a commitment today that we are actually going 
to have a very real discussion about this and come up with 
solutions on how we can secure a Federal workforce for my 
State, so----
    Ms. Archuleta. Senator, I would welcome the opportunity to 
sit down and talk to you about this further, because I think we 
are approaching this since I came to OPM in several different 
ways. Most particularly, we are working with our hiring 
managers to make sure that they understand what authorities 
they have to hire. In several cases----
    Senator Heitkamp. Can we just for a moment, though, 
Katherine, talk about retention of the workforce you have----
    Ms. Archuleta. Sure.
    Senator Heitkamp [continuing]. Because, it is 6 months, 7 
months to hire someone to do child protection work on the 
reservation, is not my idea of where I want to go. I want to 
retain the worker that I have who has already done that work. 
And so, what are we going to do to deal with an adjustment 
somehow in pay or in supplement on housing that will retain the 
workers that we have?
    Ms. Archuleta. In the----
    Senator Heitkamp. And then we can talk about retention--or 
recruitment.
    Ms. Archuleta. I understand. Thank you, Senator. Again, I 
would reiterate my desire to work with you very closely on each 
of these cases.
    There are pay authorities that allow us to do retention 
incentives. And, again, I want to be sure that, as we work with 
each of these agencies, that the managers really understand 
what authorities they have available to them. And what I have 
found--not always the case, but in some cases, we have been 
able to assist with not new authorities, but new information so 
that the managers understand that they have these retention 
incentives especially in geographic regions where it is hard to 
recruit and retain employees, we especially want to work with 
these agencies to help ensure that they can not only recruit, 
but retain the employees.
    Senator Heitkamp. Great.
    Ms. Archuleta. So, I would very much like to have that 
opportunity to sit with you and talk.
    Senator Heitkamp. I am running out of time, but Paige, 
twice, I think, your agency has denied adjustments to the 
civilian workforce on the Minot Air Force Base. Can you explain 
why you would do that in light of our challenges, especially in 
Minot, where we had a flood that wiped out a lot of affordable 
housing, where housing costs are astronomical?
    Ms. Hinkle-Bowles. Yes, ma'am. We have worked with the 
Department of the Air Force specifically with Minot Air Force 
Base on some of their requests for different salary rates. The 
data that we have, that our staff has analyzed, had shown that 
we did not see the significant recruitment and retention 
challenges you described. But, I will offer to take that back 
and certainly have a more deliberate discussion with you or 
your staff on that. We do in the Department have capabilities 
for establishing special salary rates and also to use the 
recruitment and retention incentives.
    Senator Heitkamp. And to Katherine's point, they tried to 
get approval to make the adjustments and twice you said there 
really are not problems out there. Now, I can tell you, there 
are problems recruiting engineers onto the Air Force Base. This 
is, for very many of the people I talk to in the civilian 
workforce, they are very discouraged, because what happens when 
you do not recognize their current living conditions is that 
they do not feel valued. They do not feel understood and they 
do not feel valued, and let me tell you, a guy who can do 
heating, ventilating, and air conditioning (HVAC) work, he can 
walk with his feet right off your facility and never come back 
and never look back, and good luck hiring a new one. Good luck 
hiring an engineer. Good luck hiring an electrician or a 
plumber. These are essential to fulfilling the mission of the 
Grand Forks and Minot, in particular, Air Force Bases.
    I just feel like I have to plead their case here, because 
this is not make believe. This is true and we see it every day. 
And you cannot see stories that tell you that the rental rates 
in these communities are higher than New York City and then not 
think that we have a problem and we do not need to address it.
    Senator Tester. Senator Portman.
    Senator Portman. Thanks, Mr. Chairman.
    First, to Ms. Buchholz on NASA Glenn in particular. Looking 
at NASA's overall numbers, 52 percent of workers are over the 
age of 50. Sixty percent of NASA Glenn's workers are over the 
age of 50. And I know this is not a unique problem to NASA, as 
we talked about earlier, but what are you doing to address this 
issue? Do you think the aging workforce is a threat to the 
long-term health of the research and development (R&D) program 
at NASA, and NASA Glenn specifically, and can you explain why 
it is happening and what steps are you taking to ensure that 
this incredible wealth of knowledge is not lost.
    Ms. Buchholz. So, one of the interesting things about NASA 
employees is that they have one of the longest lengths of 
service in the entire Federal Government, almost 19 years, on 
average. And what we find is, although people are eligible to 
retire, they do not often retire as soon as they can walk out 
the door.
    So, a really interesting data point comes from the Employee 
Viewpoint Survey, which actually asks employees about intent to 
retire. And what we find is that about 13 percent of the NASA 
workforce has indicated they intend to retire in the next 5 
years, which is a much lower number than the people who will 
actually be eligible to retire.
    We have very robust early career hiring programs and our 
intention is to go out, hire people early in their careers to 
come in and have the opportunity to learn from the more 
experienced individuals before they decide to depart the 
workforce.
    With 13 percent of the workforce intending to retire over a 
5-year period and our very low quit rate, our current 
recruitment and staffing policies and procedures are sufficient 
to meet that level of turnover.
    Senator Portman. But, if folks are not leaving and you need 
to replace a lot of people over the next, it sounds like, 20 
years, and you want to hire people as they are getting into 
their career rather than mid-career or late-career, you 
obviously have a problem with the limited budget that you have. 
And, I am not suggesting there is any easy answer to that, but 
one is to try to keep the very best people and provide more 
incentives for them to stay.
    I talked in my opening statement about identifying and 
rewarding success and performance, and some of you talked about 
that today. In this new normal we have, with the budget 
pressures, I think innovative human resources practices 
generally are going to be necessary to keep employees committed 
to their mission, and you noted in your testimony that NASA's 
key to successful management is rewarding innovative 
performance by moving past traditional monetary recognition. 
You pointed out, ``There is no greater incentive to innovation 
than to have one's creativity recognized and incorporated into 
the mission, no greater pride than being able to describe one's 
contributions to the public.'' Can you provide additional 
detail about some of these non-conventional or even non-
monetary methods you use to reward some of your top employees?
    Ms. Buchholz. Over the past year, we have worked to develop 
a new set of honorary awards that recognize innovative 
contributions to the agency. The first is called an Innovation 
Champion, which is someone who is championing innovation in the 
workforce and recognizing those efforts to spread innovation to 
a broader range of people.
    The second is an award we call Fail Fast, Learn Smart, 
meaning that what we are looking for are people who have 
projects that did not necessarily succeed on the first go 
around that learned something really important about that 
failure and then they were able to apply that to the next test, 
the next version of their project, so really encouraging people 
to take smart risks and learn from their experiences and apply 
them going forward into their future.
    And then simpler things, as well. We are developing an 
Innovation Coin that we are making available to all supervisors 
so that they can do on-the-spot recognition of innovation when 
it occurs in the workplace.
    Senator Portman. Do you think some of what you are talking 
about could be replicated in the Federal workforce as a whole?
    Ms. Buchholz. I think that Federal Government employees 
very much appreciate being recognized, no matter what form it 
takes, and what you need to do is find those things that really 
resonate with your workforce, with the occupations and the work 
that you have in your workforce and the contribution that they 
make to serve the American people every day.
    Senator Portman. Thank you. My time is up. I do have some 
questions for you, Ms. Hinkle-Bowles, regarding Wright-
Patterson that we will get to, hopefully, after the next round.
    Senator Tester. Paige talked about the fact that your 
agency leads in veterans' hires, and I applaud you for that. 
Did any other of the agencies have specific things that they do 
to encourage veterans not only to apply, but that you give them 
preference in hiring? Jeri, I will start with you.
    Ms. Buchholz. Veterans, five-point veterans and ten-point 
veterans, all have preference in the hiring process.
    Senator Tester. Right.
    Ms. Buchholz. One of the things that we have done is when 
we go out to college campuses, most college campuses now, 
especially in engineering programs, have Veterans Program 
Coordinators at the college.
    Senator Tester. Yes.
    Ms. Buchholz. And so we are reaching directly out to the 
Veterans Program Coordinators at the colleges and universities, 
looking for those individuals who have always wanted to work 
for NASA, who drew a picture of a Space Shuttle when they were 
8 years old, and we are finding that there are large numbers of 
veterans on campuses pursuing undergraduate and graduate 
degrees in engineering and science that make a really good 
match for our agency.
    Senator Tester. Good. Carol, is FLRA doing anything to 
encourage veterans to apply?
    Ms. Pope. We have not had any additional initiatives, but 
certainly in our technical areas, our technical jobs, we found 
that employees--veterans who have learned skills through the 
military have been particularly attracted to us with respect to 
our technology jobs.
    Senator Tester. Katherine, is there anything Federal 
Governmentwide that we are doing to encourage veterans to apply 
to jobs that are available across the government?
    Ms. Archuleta. Yes, Senator. I am pleased to report that we 
have just reengaged the Veterans Employment Council, chaired by 
Secretary Shinseki and Secretary Perez, and through that, we 
have targeted two important initiatives as well as our ongoing 
commitment to hiring veterans, and those are in the areas of 
increasing the number of women veterans, in particular--to fill 
some of the needed areas within the agencies. In addition, we 
are looking at retention of veterans as a priority within that 
Council.
    Senator Tester. OK. Thank you very much.
    I want to dovetail onto what Senator Portman was talking 
about, about the number of folks that are going to be retiring 
from the workforce, I think potentially a third of them by 
2017. I do not know if your agency is falling that high or not, 
maybe higher, actually. But, are there steps that your agencies 
are taking--I am going to start with you, Paige--to cultivate 
and to be able to bring on board the next generation of 
workers, particularly in the more highly skilled management 
positions?
    Ms. Hinkle-Bowles. Yes, sir. Thank you for that question. 
As mentioned earlier, we do have 13 percent of our population 
now eligible and we anticipate another third within the next 5 
years. So, we are taking those steps toward making sure that we 
are renewing the workforce.
    We have a series of programs that we use when we reach out 
to the colleges and universities, similar to the other 
agencies. We certainly use the Pathways Program to hire interns 
and recent college graduates. While our numbers are not as high 
as we would have liked them to be because of our latest 
restrictions in hiring, we now have about 5,000 students on the 
rolls. We focus on science, technology, engineering and 
mathematics (STEM) hiring. We have scholarship programs for 
students that are in those types of occupations. We also do 
have a program where we hire individuals at the universities as 
student Ambassadors to the individual employees, or, excuse me, 
to the students that are there to try to encourage them to 
apply for positions with the Department of Defense.
    Senator Tester. How many campuses are you on?
    Ms. Hinkle-Bowles. Sir, right now, we are targeting four 
campuses.
    Senator Tester. OK. There are a couple in Montana that we 
could probably utilize you on.
    Jeri, is there anything that NASA is doing?
    Ms. Buchholz. I think one of the things that we are doing 
that would be very helpful to other Federal agencies is we have 
student employment floors, a minimum number of full time 
equivalent (FTE) that must be occupied by students. There are 
about 250 FTE per year, which can be as many as 800 students, 
and each center has an allocation and they are not permitted to 
go below that number. So, we have a really robust pipeline of 
early career people, both undergraduate and graduate level, 
coming into the agency.
    Senator Tester. Good. Carol.
    Ms. Pope. In the 5-years since I have been Chairman, we 
have lost probably 40 percent of our workforce to retirement. 
Our average age is 48, and we expect nearly 25 percent to 
retire--or are eligible to retire now. What we have done to 
address that is we focus training and development resources on 
building leaders within. We have primarily focused, because of 
our limited resources, on hiring at the entry level. But with 
the workforce in place, we have looked to develop future 
leaders. We have used cross-component training, developmental 
details. Our entry-level supervisory jobs, by and large, are 
filled internally, and we have been very successful in 
providing support for first-level supervisors, and that has 
been a real retention boost for us.
    Senator Tester. OK. Good. Senator Heitkamp.
    Senator Heitkamp. Just a couple more questions, and it goes 
to this issue of recruitment and young people and the aging out 
of the workforce. A lot of large institutions are going through 
exactly this same problem today, and so, obviously, there is a 
difference between the Baby Boomers you see up here and the new 
workforce.
    My question to you, Katherine, is, give me the two top 
reasons why you think a young person would want to work for the 
Federal Government, and I will use that broadly, and the two 
reasons why they would not.
    Ms. Archuleta. I think the two reasons I have heard----
    Senator Heitkamp. That is kind of the point I wanted to 
make. We really do not know, do we?
    Ms. Archuleta. Well, I can speak from the conversations I 
have had.
    Senator Heitkamp. But, we have never done surveys. We have 
never done kind of scientific analysis which would tell us, 
these are the things that the millennials or the X-Generation 
or whatever it is----
    Ms. Archuleta. That is----
    Senator Heitkamp [continuing]. Whatever category we are 
going to put them in--these are the reasons why they find this 
system good or bad.
    Ms. Archuleta. Not to my knowledge.
    Senator Heitkamp. And that is kind of a problem, I think. I 
am not saying we need to adapt the Federal workforce for the 
new kind of generational personality, but we may, in order to 
meet the needs going forward. You can still answer the 
question. I just want to make the point that you and I could 
speculate on what that is, but we would not really know.
    Ms. Archuleta. Well, based on the conversations that I have 
had and I travel a lot around the country talking to university 
students--the first one is public service. And the second one, 
frankly, is the diversity of opportunities within the Federal 
Government. Obviously, if an IT or a STEM student chooses to go 
into Google, they are pretty much in that one particular area. 
What I talk about and what they talk about is the vast variety 
of opportunities that government offers.
    Senator Heitkamp. OK. Well, what would be the reasons why 
they would not want to work for the government?
    Ms. Archuleta. I think, especially at the early years and 
especially in the STEM areas, pay is an important 
consideration.
    Senator Heitkamp. OK. What about status? Do you think that 
Federal workers have taken a beating and----
    Ms. Archuleta. I have never heard that as a reason why they 
would not consider.
    Senator Heitkamp. I want to just get to one point which has 
obviously been in the news and creates a concern for the 
American public, which is the Internal Revenue Service (IRS) 
bonuses. Take a look at kind of those incentive payments and 
how do you respond to someone who says, ``See, once again, 
management of a Federal workforce, we let people get bonuses 
who owe the Federal Government money? ''
    Ms. Archuleta. I think that is a particular interest, and I 
would never try to paint the whole picture----
    Senator Heitkamp. Sure.
    Ms. Archuleta [continuing]. With the small paintbrush that 
perhaps this would indicate. I think this is an important 
issue. It is one that I am concerned about, and I understand 
your concern. I think that as we do performance assessments, 
that we need to be sure that they are based on the quality of 
work and the quantity of work individuals are providing in the 
workforce. These are issues, I think, that OPM is very 
concerned about and we are looking at very carefully in terms 
of conduct and the role conduct plays in certainly this issue 
of performance awards.
    Senator Heitkamp. Yes. I guess, not to put too fine point 
on it, but you can understand that this is the kind of 
publicity that does not work very well for the Federal 
workforce.
    Ms. Archuleta. I agree.
    Senator Heitkamp. And, no one here wants to say the whole 
system of rewards is not good. I mean, I think that there just 
has to be a hyper-vigilance to any kind of bonus situation when 
you are looking at a workforce that is as diverse as the 
Federal Government.
    And one final question, and that really is on security 
clearances, and I know that this has been a point of discussion 
at this table in the past, but, obviously, there is another 
place where I think we could get some further follow-on 
discussion with you about how we can improve that system, speed 
up security clearances. Maybe make those a bit more transparent 
in terms of how we decide we are going to give security 
clearances to Federal employees and contractors.
    Ms. Archuleta. Yes, Senator. As you know, the President's 
120-Day Plan has begun its implementation and I am working very 
closely with the Director of National Intelligence (DNI) on 
these issues.
    Senator Heitkamp. And when will we have a sense of how well 
that plan is working?
    Ms. Archuleta. The Director is charged, as the security 
executive agent, to review the number of clearances that are 
being issued and I believe he is working on that right now.
    Senator Heitkamp. Thank you.
    Senator Tester. Senator Portman.
    Senator Portman. Thank you, Mr. Chairman.
    Ms. Hinkle-Bowles, I want to talk to you about the STEM 
workforce, also. We heard from NASA. You also have a lot of 
scientific and research expertise, and you need to attract more 
and retain what you have. Wright-Patterson Air Force Base is in 
Ohio, as I am sure you know. That is the home of AFIT, among 
other things. The Air Force Institute of Technology (AFIT) is 
basically your graduate school for the Air Force. However, it 
is also the Air Force Research Lab, which is critical not just 
to the Air Force, but also incredible military and private 
sector research.
    I think it is fair to say--and I touched on this earlier--
the most important element that they have is not 
infrastructure, as important as that is, but just attracting 
and retaining the right talent. In particular, it is important 
to be able to compete with the private sector and get 
incredible individuals willing to work on things like 
cybersecurity, engineering innovations, and other sciences.
    In the 2004 DOD Authorization Act that was just signed into 
law in December, there was a provision that required your boss, 
the Under Secretary of Defense for Personnel and Readiness, to 
submit a briefing to Congress within 90 days, which would have 
been due at the end of March. The challenges to the management 
of the scientific and technical workforce of the Department and 
make recommendations for possible actions to improve such 
management. We have not seen anything, and this Subcommittee, 
of course, is very interested in that report. Can you tell us 
the status of this briefing to Congress and share with us any 
of your preliminary findings?
    Ms. Hinkle-Bowles. Sir, we do have the presentation right 
now drafted and we are ready to come up on the Hill to provide 
that presentation to your staff. We have been working closely 
with the right functional communities on those provisions and 
we are working on issuing the Federal Register notices that 
will launch some of those provisions early this summer.
    Senator Portman. While we await the details of it, I would 
like to get your thoughts on some of the management of the 
workforce. Again, we are eager to get that report. We think it 
is a high priority, which is why we asked for it within 90 
days. But, what is the Department of Defense doing to attract 
and retain top scientists right now within the workforce? What 
are some of the things that you are already doing?
    Ms. Hinkle-Bowles. Sir, thank you for the question. I will 
talk a little bit at the global level, or at the DOD level. I 
mentioned earlier that we do have a Strategic Workforce Plan in 
process. It covers 93 percent of our workforce. And that is 
then broken up into 22 different functional communities. So, at 
the Office of the Secretary of Defense (OSD) level, we have 
executives that are responsible for individual functions, to 
include scientists and engineers. We have engineering non-
construction. We have IT. And those individual functional 
communities evaluate what are the skills they need today and in 
the future, what gaps do they have, and they build independent 
strategies for recruitment and retention that will address 
those particular occupations.
    Senator Portman. Do you think the hiring process is too 
slow and cumbersome, per the Chairman's earlier questions?
    Ms. Hinkle-Bowles. I think we have opportunities there for 
improvement. We are always working to streamline where we can. 
But, as several of my colleagues have mentioned, I do think we 
have made tremendous strides in the last few years.
    Senator Portman. When you include benefits, do you think 
you have competitive pay packages?
    Ms. Hinkle-Bowles. I am sorry, sir?
    Senator Portman. Do you think you have competitive pay 
packages for your STEM workforce?
    Ms. Hinkle-Bowles. Yes, sir. I think the Federal 
Government, as a whole, does have a competitive benefits 
package.
    Senator Portman. Let me ask you about a particular, 
authority with which I became involved when I was on the Armed 
Services Committee. In fact, I was the Ranking Member of the 
Subcommittee there. I talked to the Department of Defense 
acquisition and technology folks, including a couple of your 
colleagues, Mr. Kendall and Mr. Lemnios. At that time, we were 
reviewing an extension of what is called ``direct hire''. They 
said that they needed more flexibility, and that this authority 
was critically important. Mr. Kendall stated, ``anything that 
gives us flexibility to bring talent to the workforce is 
good''.
    As you know, at that time there was a sunset provision on 
direct hire. In that year's DOD authorization bill, we were 
able to get that authority extended. We removed the sunset 
provision, making it permanent. I wonder if you could talk 
about that. Have you been using direct hire authority over the 
past 2 years? Has it been an effective tool to get talent in 
the door and, again, to be able to compete effectively with 
some of the private sector opportunities?
    Ms. Hinkle-Bowles. Yes, sir, we do use all of those 
available authorities, specifically direct hire. We also do 
have an expedited hiring authority for acquisition, and then we 
have a Schedule A hiring authority specific to cyber 
occupations. And so, all of those combined, we find to be 
effective.
    And then, as I had mentioned earlier, we do have tremendous 
amounts of talent in the military, that as those individuals 
separate from the service, we can reach back into that talent 
pool using all the different veterans' hiring authorities 
available to us.
    Senator Portman. Does your current direct hire authority 
give you what you need to go around the requirements of the 
bureaucracy and hire somebody quickly when appropriate?
    Ms. Hinkle-Bowles. Sir, I believe that we do, but if I can 
take that for the record, I will get more information back to 
you.
    Senator Portman. Yes. We would like to hear from you on 
that.
    My time is up. I appreciate the hard work that all four of 
you are doing to attract and retain good people. I think Ms. 
Archuleta and I have a little difference of opinion on this 
notion of doing more with less. I will just tell you that we 
are going to be under pressure. As much as you might like to 
think the Federal workforce is going to get more funds out of 
the budget, I do not see us making the progress we should be 
making on the other two-thirds of the budget. Within 10 years, 
75 percent or more of the budget that is on auto-pilot that is 
not part of the Federal workforce but rather is on the 
mandatory side, and that puts a lot of pressure, even if we did 
not have these enormous deficits and historic level of debt. We 
need to figure out how to be smarter, more innovative, and 
attractive the best and brightest. We need to be as productive 
as possible.
    Thank you, Mr. Chairman. Thank you all.
    Senator Tester. Well, thank you, Senator Portman. We 
definitely do have challenges ahead of us. Working together, I 
think both parties and agencies-- we can come to a conclusion 
that will work for everybody.
    There will be an opportunity for questions for the record. 
I actually am going to have some questions for you, Katherine, 
on the security workforce and security clearances with the use 
of the situation where the oversight is for the contractors and 
what role the Federal employees are going to play in that, 
because that is a huge issue.
    Somebody said in their opening remarks, and I do not 
remember which one of you, that one of the opportunities we 
have in a hearing like this is to be able to listen to other 
folks on the panel and learn from them. I hope everybody did do 
that, because I think everybody brings some things to the table 
that other agencies can utilize, especially when it comes to 
recruitment, morale, and retention.
    So, I want to thank you all for the time that you spent 
here today, and like I said, there will be an opportunity for 
additional questions, not only from us but for the folks who 
did not come to this Committee hearing, so thank you all very 
much.
    We are going to go to our second panel, which includes 
stakeholders from the Federal employee and public service 
communities. I will let you get set up here and then I will 
introduce the second panel of witnesses.
    [Pause.]
    Our second panel of witnesses includes stakeholders from 
the Federal employee and public service communities.
    J. David Cox is the National President for the American 
Federation of Government Employees (AFGE). AFGE is the largest 
Federal employee union, representing 650,000 government 
workers. Before joining the leadership at AFGE, David was a 
registered nurse and served for over 20 years at the VA. Thank 
you for your service there, David, and we want to welcome you 
here today.
    We have Colleen Kelley, who is the National President for 
the National Treasury Employees Union (NTEU). The NTEU is the 
Nation's largest independent Federal sector union, representing 
150,000 employees. I should note that Colleen has distinguished 
herself as a leader in the ongoing fight to curb waste and 
abuse in government contracting, a fight worth fighting. Thank 
you, Colleen, and welcome.
    We have Carol Bonosaro, who is the President of the Senior 
Executives Association (SEA). SEA is a nonprofit professional 
organization that advocates for the interests of both active 
and retired career Federal executives. Carol's long history of 
Federal service spans from her start as an intern at the Bureau 
of Budget to the senior leadership positions at the U.S. 
Commission on Civil Rights. It is good to see you again, Carol. 
Welcome.
    And last is Max Stier, who is President and Chief Executive 
Officer (CEO) of the Partnership for Public Service. The 
Partnership actively promotes public service, provides 
assistance to Federal agencies to improve their operations and 
leadership capacity, and advocates for legislative and 
regulatory reforms. They also generate valuable research on the 
workforce challenges that face the Federal Government. Welcome, 
Max. We look forward to hearing your testimony.
    As with the previous panel, we are going to have an oath, 
if you would please stand and either answer in the affirmative 
or the negative, whichever you would prefer.
    Do you swear the testimony you will give before this 
Subcommittee will be the truth, the whole truth, and nothing 
but the truth, so help you, God?
    Mr. Cox. I do.
    Ms. Kelley. I do.
    Ms. Bonosaro. I do.
    Mr. Stier. I do.
    Senator Tester. Let the record reflect that all the 
witnesses answered in the affirmative.
    As with the previous panel, you will each have 5 minutes 
for oral statements. As I said with the first panel, please 
summarize your statements as much as possible so we can stick 
to the 5-minute clock so that we have time for questions. Your 
complete written testimony will be a part of the record.
    David, please proceed and get us started.

TESTIMONY OF J. DAVID COX SR.,\1\ NATIONAL PRESIDENT, AMERICAN 
               FEDERATION OF GOVERNMENT EMPLOYEES

    Mr. Cox. Mr. Chairman and Members of the Committee, thank 
you very much for the opportunity to testify today.
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    \1\ The prepared statement of Mr. Cox appears in the Appendix on 
page 64.
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    Starting with the 3-year pay freeze initiated by President 
Obama, which first took effect in 2010, these years have been 
relentlessly and unjustifiably harsh toward Federal employees 
and their families. Federal workers hired in 2013 are forced to 
pay an extra 2.3 percent of salary to their pensions because 
their salaries were used to pay for the 2012 extension of 
unemployment insurance. And those hired starting last 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 automated teller machine (ATM) for budget 
agreements.
    Let me try to put that sacrifice in concrete terms, Mr. 
Chairman. Right now, the Montana VA Hospital in Fort Harrison 
is hiring a dental assistant at about $32,000 a year. That new 
employee will pay more than $1,100 more than someone in the 
exact same job and hospital hired in 2012 or before. How these 
employees will ever be able to participate in the Thrift 
Savings Plan (TSP) is beyond me.
    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 (BLS), 96 percent of private sector defined benefit 
plans do not charge employees one red cent, a horrible policy 
based on false assumptions. Mr. Chairman, if this policy is not 
modified or repealed, it will impoverish an entire generation 
of Federal employees.
    Meanwhile, the salary gap continues to grow worse. Each 
year, OPM calculates gaps between Federal and private sector 
salaries on a city by city, 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 still tells 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 aircraft mechanic at Malmstrom Air Force 
Base, or a Border Patrol Agent at Havre Sector, or a claims 
representative in the Missoula Social Security office, then it 
was a rousing success, sir.
    Between the pay freeze, temporary layoffs from 
sequestration, and the shutdown, we heard from our members who 
fell behind on the rent, were about to have their cars 
repossessed, or were not able to pay for day care. Worse 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, or lockout, as I 
choose to refer to it was, 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 lasting 
consequences for many workers. These are real people who 
suffered real harm, not pawns on a political chess board. It is 
not right, and we all know it.
    So, how could morale in Federal employees be anything but 
extremely low under these circumstances? Well, the American 
people are extremely lucky, because Federal employees are 
devoted and a resilient bunch of people. They are sick and 
tired of being a political punching bag and an ATM, but they 
love their country, they love their jobs, and they are 
profoundly dedicated to the agencies and their missions that 
they serve.
    Austerity budgets make it all but impossible for Federal 
workers to keep up productivity and carry out the missions of 
the agencies. Whether it is Border Patrol Agents without enough 
staff to keep drug smugglers out of the country, or the United 
States Department of Agriculture (USDA's) plans to speed up the 
line at chicken processing plants so Federal inspectors cannot 
guarantee food safety, or VA physicians with patient loads of 
2,000 instead of the best practices of a standard of 1,200, 
sequestrations and cost cutting reduces productivity and 
service.
    Mr. Chairman, my written statement addresses many other 
issues, but in closing, let me thank you for your strong 
support for the Federal workforce, and I would be happy to take 
any questions.
    Senator Tester. Thanks, David, and you did a good job of 
hitting on the key Montana sectors. [Laughter.]
    Colleen, you are up next.

TESTIMONY OF COLLEEN M. KELLEY,\1\ NATIONAL PRESIDENT, NATIONAL 
                    TREASURY EMPLOYEES UNION

    Ms. Kelley. Chairman Tester, thank you very much for 
inviting me to testify today.
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    \1\ The prepared statement of Ms. Kelley appears in the Appendix on 
page 76.
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    Wherever I go, my members talk to me about how difficult it 
has become to accomplish the tasks that are required of them. 
The No. 1 problem is that there are not enough employees to do 
the work that needs to be done. Employees leave and no one is 
hired to replace them.
    Although the recently passed Bipartisan Budget Act changed 
the amounts of 2014 and 2015 funding, cuts will still be needed 
in the years of 2016 to 2021 due to the sequester funding 
levels in place under the Budget Control Act. Unless the 
sequester is ended, it is going to have a crushing impact on 
jobs and on economic growth and it will cripple the ability of 
the government to deliver services to the American public.
    As you noted in your opening statement, sequestration has 
made it much more difficult for the Federal workforce to do its 
job and to complete its missions. If Congress wants an 
efficient and effective government, and I say ``if,'' then it 
needs to end the sequester and to provide resources for 
adequate personnel and training.
    Due primarily to the sequester funding levels, the IRS 
today has 10,000 fewer workers than it had just 4 years ago. 
The work has not decreased. If anything, it has increased. The 
IRS's ability to continue helping taxpayers to meet their 
obligations and to generate revenue to fund the government has 
been severely challenged due to the funding reductions and the 
cuts mandated by sequestration. This forced the IRS to furlough 
its employees without pay last year and to not backfill 
vacancies. According to the IRS, the sequester cuts have 
resulted in the inability of millions of taxpayers to get 
answers from the IRS call centers and Taxpayer Assistance 
Centers and has significantly delayed IRS's responses to 
taxpayer letters.
    The IRS is not an exception, unfortunately. The loss of 
personnel throughout the government and the inability of 
agencies to fill positions due to lack of funds severely 
affects not only the mission of the agencies, but the morale of 
the civil service. Under the sequester funding levels, Customs 
and Border Protection (CBP) is facing severe challenges in 
accomplishing its vital missions of helping to secure our 
Nation's borders and facilitating vital trade. Understaffed 
ports lead to long delays in our commercial lanes as cargo 
waits to enter U.S. Commerce. The cumulative loss in output due 
to border delays over the next 10 years is estimated to be $86 
billion.
    In addition to cuts to agency funding, Federal employees 
have seen their compensation diminish by $138 billion over the 
last few years in the name of deficit reduction. They endured 
the 3-year pay freeze, pay reductions due to unpaid furloughs, 
and new hires have seen increases in their pension 
contributions. Now, despite that disproportionate burden, the 
2015 budget that was passed by the House of Representatives 
calls for an additional $125 billion more in cuts to Federal 
employees.
    Over the last 3 years, legislation has been introduced 
which sought to significantly decrease the benefits of Federal 
retirement systems. Discussions leading up to passage of the 
Bipartisan Budget Act included similar proposals. These kinds 
of assaults contribute to the low morale of the Federal 
workforce.
    Today, new Federal employees hired must contribute 15.05 
percent of their salary right off the top for the Federal 
Employees Retirement System (FERS), Social Security, TSP, and 
Medicare--15.05 percent. That is too much, and the recent 
increases in employee contributions for the modest pension that 
is offered under FERS must be reversed.
    We have heard that President Obama has recommended a 1-
percent pay raise for 2015. NTEU believes that number is 
insufficient. We have recommended to Congress that a 3.3 
percent pay raise should be passed. This would be a small 
catch-up for a group of employees being asked to do a lot more 
with a lot less.
    Last October 1, when the government shutdown--and we have 
had some conversations here today about that--in those 16 days, 
the OMB report noted the impact on the cost of the shutdown, 
talking about patients who could not enroll in clinical trials 
at the National Institutes of Health (NIH), almost $4 billion 
in tax refunds that were delayed, health and safety inspections 
canceled, and travel and tourism disrupted at National Parks, 
all hurting the local economies. For Federal employees, the 
shutdown was just another indication that Congress does not 
place importance on the work that they do. It is estimated that 
the lost productivity of the furloughed Federal employees cost 
our country over $2 billion in those 16 days.
    The people who I represent all believe that we should have 
the most efficient and effective government possible and they 
work to achieve that every day. They want to work in an 
environment that respects them and that gives them the tools 
they need to do their work and that encourages them to do 
things in new and more productive ways. NTEU is asking for your 
support, and we know, Chairman Tester, that we can count on 
your support. We would look to that support from all of 
Congress to create this environment for Federal employees.
    Thank you again for the opportunity, and I welcome any 
questions you have.
    Senator Tester. Thank you, Colleen. You brought up a lot of 
good issues. Sequestration, it does need to end. It is a hammer 
being held over our heads. Carol Bonosaro.

TESTIMONY OF CAROL A. BONOSARO,\1\ PRESIDENT, SENIOR EXECUTIVES 
                          ASSOCIATION

    Ms. Bonosaro. Thank you, Chairman Tester, for the 
opportunity to testify today. As you know, the Senior Executive 
Association represents the nearly 7,000 career members of the 
Senior Executive Service. Many of the challenges facing the SES 
are the same as those of the Federal workforce as a whole: 
Budget cuts, fallout from pay freezes, furloughs, and the 
government shutdown and sagging morale. But, some issues are 
unique to the SES due to their position in government and their 
separate personnel and pay-for-performance systems, and I will 
focus on those today.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Bonosaro appears in the Appendix 
on page 83.
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    If you ask senior executives about the state of the SES 
workforce, which we recently did, the responses highlight 
problems that require immediate attention. They said, ``There 
is not a company in the world that would institute pay freezes, 
deny or limit performance bonuses, continually criticize senior 
executives, politicize mistakes by agencies and blow them all 
out of proportion, and at the same time expect us to work long 
hours, recruit top talent, and continue to be positive about 
the future of government.''
    Another said, ``My best colleagues are retiring in disgust 
and the best GS-15s do not see a reason to go into the SES. 
Morale is excellent with regard to carrying out our mission, 
but the under-appreciation and outright disdain demonstrated 
regarding our contributions is a significant drain on morale.''
    Regarding the SES performance system, ``It is untimely, 
burdensome, and did not recognize great performance. My agency 
will lose nearly 20 percent of our scientific and professional 
core in 1 year to retirement and resignations. It started with 
furloughs, and the pay and performance issues put it over the 
top.''
    These comments paint a picture of a demoralized executive 
core. Indeed, 51 percent of our members reported morale as low 
or very low. With SES retirement up 40 percent since 2009 and 
fewer GS-15s aspiring to the SES, recruitment and retention 
should be among the top priorities of Congress and the 
Administration.
    A strong SES is critical to effective agency operations and 
workforce management. Senior executives are highly qualified 
professionals who oversee sizable agency budgets and complex 
programs and have a large span of control.
    Senior executives who have earned the Presidential 
Distinguished Rank Award for Outstanding Contributions include 
managing a DOD global information grid, a network which extends 
into 90 countries, assuring its infrastructure under all 
conditions and providing all the way to the foxhole service, 
expanding information support by over 90 times that of Desert 
Storm I; developing the after-hours tele-nurse triage program, 
which provides clinical telephone care services to seven 
networks of hospitals in multiple time zones; establishing 
Medicare Fraud Strike Force operations, leading to 1,200 
defendants charged for falsely billing Medicare over $3.5 
billion.
    Many of the challenges of the career executive core, as 
well as areas of needed reform, are outlined in my testimony, 
but one issue deserves particular attention, the pay and 
performance system created in 2004. All SES pay adjustments are 
discretionary and based on performance. Annual performance 
ratings are based on standards which focus on measurable 
results, and high performers are considered for performance 
awards. But unlike GS employees, they do not receive locality 
pay or cost-of-living increases, and nearly one-quarter of the 
SES make equal to or less than their General Schedule 
subordinates.
    As any senior executive will tell you, it is not about the 
pay. If it were, they would be working in the private sector. 
But coupled with the other challenges facing the SES and the 
workforce as a whole, it does serve as a major detractor to 
recruitment, retention, and high morale.
    We would be pleased to work with the Subcommittee to 
implement meaningful reforms, including ending downward 
pressure on performance awards, strengthening the timeliness 
and transparency of the system, and putting stability back by 
restoring locality pay and providing annual increases based on 
GS increases to those executives rated ``fully successful'' or 
higher.
    Despite the challenges in the SES system, executives are 
strongly committed to serving the taxpayer and meeting agency 
mission. We must restore respect and support for the men and 
women in the SES and equivalent positions who give so much of 
themselves for the government and the American people and who 
ask only to be treated fairly.
    Senator Tester. Thank you very much, Carol. We appreciate 
your testimony.
    Max, you are up.

   TESTIMONY OF MAX STIER,\1\ PRESIDENT AND CHIEF EXECUTIVE 
            OFFICER, PARTNERSHIP FOR PUBLIC SERVICE

    Mr. Stier. Thank you, Chairman. It is Public Service 
Recognition Week. Thank you for sponsoring the resolution here 
in the Senate. This is, again, a great hearing that you are 
holding.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Stier appears in the Appendix on 
page 92.
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    One of the things I want to start with is just to say that 
today we honored 33 amazing Federal employees that are doing 
exceptional work for the American public that need to be 
recognized, and if I could submit that for the record,\2\ that 
would be terrific.
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    \2\ Information submitted by Mr. Stier appears in the Appendix on 
page 102.
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    Senator Tester. So done.
    Mr. Stier. Outside of the great people that you have in the 
Federal workforce, frankly, the system is not giving them what 
they need. The system is failing them. In my testimony, I want 
to do two things quickly. The first is to look at the Federal 
Employee Viewpoint Survey, data and see what is really wrong 
and then make five suggestions about things that could happen 
right now that would make a difference.
    I am going to look at five questions from the survey and 
give you the governmentwide average, and then I am going to 
look at the lowest-rated agency in the government and the 
highest, because that differential and what it shows is really 
important, which is that great leadership can make a huge 
difference but bad leadership can make a big difference, too.
    On leadership itself, 38.5 percent of Federal employees 
governmentwide believe that their leaders generate high levels 
of motivation and commitment. Basically, only a third of them. 
That number is 73.5 percent at the Surface Transportation Board 
and only 8.6 percent at the Economic Development Administration 
at Commerce, which is a huge discrepancy.
    On having the right talent, 38.8 percent of Federal 
employees governmentwide say their work unit is able to recruit 
people with the right skills. Again, just basically a third. 
That goes to 78.7 percent at the Stennis Space Center at NASA, 
the top-ranked subcomponent in government, and is 13.5 percent 
at the Office of Solid Waste and Emergency Response at the 
Environmental Protection Agency (EPA). Another huge 
discrepancy.
    On performance management, 43.4 percent of Federal 
employees governmentwide say they are rewarded for doing good 
work, very low relative to the private sector. That number is 
almost 80 percent at the Surface Transportation Board, and only 
23.9 percent at the Office of Post-Secondary Education.
    Twenty-nine-point-four percent of Federal employees 
governmentwide believe that promotions in their work unit are 
based on merit, fewer than 3 out of 10, which is a pretty 
shocking number. It is almost 75 percent at PTO and 12 percent 
at U.S. Army Central.
    Very importantly, will the results of the survey be used to 
improve your workplace? Do employees believe agencies are 
actually doing anything with their views? Only a third of 
Federal employees say yes governmentwide. Again, that is close 
to three-quarters at Stennis and only 10 percent at the Office 
of U.S. Trade Representative. We should have Senator Portman 
here to hear that one.
    This sends a clear message that our workforce is saying 
that the system they are operating in is not working. But, you 
do see extraordinary leadership beating the odds and poor 
leadership doing a lot worse. I think there is a lot to be 
learned across government.
    In general, the system we have is broken. We put out a 
report that I hope you will take a look at recommending that we 
overhaul the way we hire people, the way we pay them, and the 
way we manage them. The Senate spent 12 days in 1978, the last 
time that there was a substantial overhaul of the avil service 
system, looking at these issues in public hearings--12 days and 
seven markups in the Senate alone. I think that this issue 
really requires that kind of attention.
    But before you get there, there are five things that could 
be done in the here and now that would make a big difference. 
We have heard about direct hire. What is the standard for 
direct hire today? You have to show that there is a shortage of 
minimally-qualified talent in order to be able to qualify for 
direct hire authority rather than what it should be, which is a 
shortage of highly qualified talent. That should be the 
standard for the people we want in government. That change 
would make a big difference. That is No. 1.
    No. 2, we should allow agencies to share their 
certification lists. For example, if we are looking for cyber 
talent, which we need across government, if one agency, say, 
the Department of Homeland Security (DHS), finds 10 amazing 
cyber professionals and only wants to hire five of them, the 
Department of Defense cannot hire the remaining five off the 
DHS list. The Defense Department will have to go back into the 
marketplace and go through the whole process again. We are not 
treating the government like an enterprise. It is foolish. This 
is an easy change that would make a big difference.
    No. 3, we need to update the Federal Employee Viewpoint 
Survey. We should require that OPM do it annually and the data 
turned around as quickly as possible so agencies receive the 
information and can act on it. We also need data by occupation. 
We should be able to look at the job satisfaction cyber 
professionals at every agency and compare them across all 
government. We do not have that ability right now.
    No. 4, we should be holding leaders accountable in their 
performance plans for taking steps to improve employee 
satisfaction. We need to learn from other agencies. The 
Department of Transportation (DOT) did that to great effect. 
That requirement should apply to both career and political 
leadership.
    Finally, we believe that for the Senior Executive Service, 
and this is something that I would love to have the 
conversation with Carol about, we should be supporting more 
mobility in the SES. Only 8 percent of the SES members change 
agencies once they join the SES. We should be encouraging more 
mobility, and we argue that there should be a requirement that 
before you can get into the SES, you must have worked in 
multiple agencies, multiple levels of the government, or 
multiple sectors, so you really have that broad view about what 
is possible to achieve to have the success that we need.
    So, thank you very much for your time and I look forward to 
answering questions.
    Senator Tester. Well, thank you for your testimony, Max, 
and thank you all for your testimony.
    I will just keep going with you. You do not need to repeat 
yourself, but you listed five things that could be done, Max, 
to help the hiring process. This may be a better question for 
my staff than you, but I will ask it anyway. Can these things 
be done administratively?
    Mr. Stier. Most things cannot be. There are some things 
that could be changed administratively, and based on the 
discrepancies between agencies there is a lot of possibility 
within the existing framework. But these are mainly legislative 
hurdles that need to be fixed, and that could be fixed 
relatively quickly in a targeted fashion.
    Senator Tester. Can you tell me the reason why you would 
not allow agencies to share the certification list for new 
employees? Why would that be there?
    Mr. Stier. The reason why it exists is a bad one: the 
Office of Personnel Management used to have full authority to 
do all hiring governmentwide. It was hiring by exam and there 
was an enterprise approach. It then delegated its authority to 
individual agencies. OPM said, Department of Defense, you can 
go ahead and assess talent and make your own hiring decisions.
    But the interpretation of the law meant that you could not 
delegate the authority to hire for Department of Homeland 
Security to the Department of Defense, and therefore, you could 
not share certifications lists. I do not know if that 
interpretation is the right interpretation. That is the 
interpretation of the law. But there is no good reason for that 
barrier.
    Senator Tester. Got you.
    Mr. Stier. It is a product of historical accident. It could 
be changed by Congress and would make a real difference.
    Senator Tester. It does not make a lot of sense to me.
    Mr. Stier. Yes.
    Senator Tester. I will start at the other end of the table 
with you, David. The previous panel talked about how long it 
took to hire folks. This does not go into a lot of the points 
that you brought up, but I am just curious, from your 
perspective, and I will go down the line and ask you all. I 
mean, you have heard anything from 45 to 90 days. I did not 
hear anything longer, although they said the higher-level stuff 
could take longer, too. Is that an appropriate amount of time, 
especially when you are comparing it with the private sector? I 
mean, are you guys OK with that or not?
    Mr. Cox. I think speeding up the hiring process is always 
in everyone's interest. Now, where I would have concerns, it is 
the Federal Government. We want to make sure that people are 
hired through an appropriate process, that we do not create the 
cronyisms----
    Senator Tester. That is right.
    Mr. Cox [continuing]. And those type things and politicize 
the Federal workforce. So, AFGE is always interested in trying 
to decrease the hiring time, but, Senator, I have to point out 
again, until we give Federal employees a raise, it is going to 
get more and more difficult to hire them and the wait is going 
to be longer.
    Senator Tester. I got you. That is good.
    Colleen, would you like to address the time? By the way, I 
appreciate both comments. The comment on politicizing the jobs 
is something that does set the Federal Government a little 
different than the private sector. Go ahead.
    Ms. Kelley. I think if agencies are hiring within a 45-to 
90-day timeframe, that would be a huge improvement over the 
past.
    Senator Tester. Yes.
    Ms. Kelley. I would welcome that.
    Senator Tester. Yes.
    Ms. Kelley. I know there are some agencies, when I talk to 
employees from the first time they submitted their application 
to when they were hired, it is a couple of years.
    Senator Tester. Again----
    Ms. Kelley. And that makes me worry that we are losing an 
awful lot of good candidates.
    Senator Tester. Yes, I agree.
    Carol, would you like to address it.
    Ms. Bonosaro. Well, I will address it from the perspective 
of the Senior Executive Service.
    Senator Tester. Yes.
    Ms. Bonosaro. I mean, obviously, they are the folks who are 
concerned about the workforce that they are managing and these 
long hiring times are of concern. But in terms of SES jobs, in 
particular, the one thing we do know is that agencies have 
expressed concern from time to time about Qualifications Review 
Boards (QRBs), which we think are essential. They do not take 
that much time. What we do know about the process is that the 
delays occur at the agency level, and very often as those 
higher-level positions, those hires up the line for approval, 
and that is where the delay is. And so we have that particular 
issue as well as the concern, and I think it is very real, 
about agencies being inundated with an enormous number of 
applications and just having the person power and the processes 
to sort through those effectively.
    Senator Tester. Good, Carol.
    Max, do you want to----
    Mr. Stier. I think we are focused on the wrong thing.
    Senator Tester. OK.
    Mr. Stier. We should be focused on quality of hire, not 
time to hire. Time to hire may chase away some talent, but at 
the end of the day, the Federal Government has a real challenge 
in identifying what the right attributes are to make sure they 
are getting the right person. Carol's point about the volume of 
applications is one of the challenges that agencies face.
    They are also not using the smart techniques that other 
organizations do. For example, Senator Portman raised the point 
that only 7 percent of the Federal workforce--is under the age 
of 30, compared to 23 percent in the general workforce. The 
Federal Government does not use student interns like most 
organizations do. They convert 6 percent of student interns 
into full-time employees rather than a benchmark of about 50 to 
75 percent that you would see in other organizations that are 
doing this well. That means government is missing out on one of 
the best ways of determining good quality. You get a chance to 
work with somebody, you have an opportunity to see if they are 
right for the job in a way that no other screening mechanism is 
going to tell you.
    I think the attention is focused on time to hire because it 
is something people can count. But the quality of hire is much 
more important, and we should be focusing more on that.
    Senator Tester. OK. Thank you. Senator Begich.
    Senator Begich. Thank you, Mr. Chairman. Thank you very 
much for the opportunity.
    It is interesting. I was just going to make a comment, Max. 
We have in my office, and I am sure Senator Tester, also, but 
in my office, we use interns and we are probably 25, 30 percent 
hire out of the intern pool.
    Mr. Stier. Yes.
    Senator Begich. I mean, we just see a high value, and they 
are all very young, let us just say. [Laughter.]
    But, we are very happy and they are a great talent and they 
are coming with great experiences as interns. But, I think we 
are about 25 percent, 30----
    Mr. Stier. Six percent in the Federal Government.
    Senator Begich. Yes. That is a problem.
    Let me also ask a general question, and then I want to ask 
a very specific question on windfall elimination provision 
issues that deal with--I know it is kind of a pocket issue, but 
it is one that I know impacts, and I am going to ask Colleen 
and others who may want to respond on that.
    But the first, one area that I think we can improve on, and 
tell me if I am wrong on this, it seems like when we lose 
talent, or talent is retiring, getting ready to retire, we have 
to wait for them to retire. Then we work to fill the position. 
And then we hire them back as consultants to train the person 
we just hired to fill their position.
    What we did when I was mayor, I do not know what the term 
is here, but we called it double-filling. So, basically, you 
would have the same Personnel Control Number (PCN), a position. 
The person would occupy it. We would double-fill it, which 
would be an economic issue, but we would double-fill it, and 
the purpose of that would be then that this person who is 
retiring has an opportunity to train someone in that same 
position, so then when we move that person into retirement, we 
have a smoother segue.
    Do you think that is a value or could be a value in the 
Federal Government? It seems like we always have these gaps and 
we are hiring everybody back as consultants to train or fill 
the gap while we are trying to find the people to fill the 
position. Do you think this double-hiring may be helpful? I 
see, like Air Traffic Controllers, I think in these positions 
that you do not really want a lot of gaps or you are going to 
have some other situations. Does anyone want to respond to 
that? Max.
    Mr. Stier. There is actually authority that was recently 
passed for what is called phased retirement.
    Senator Begich. Right.
    Mr. Stier. That enabled people to, move out of the 
workplace in a more planned, thoughtful way and they are 
supposed to mentor new talent coming in.
    Senator Begich. Are they using it?
    Mr. Stier. No.
    Senator Begich. OK. So, it has passed but they are not 
using it. Got it. So, I am sorry, Carol.
    Ms. Bonosaro. No, I think you raise generally a concern we 
have with regard to certainly succession planning, given the 
increased retirements of senior executives, their high 
eligibility to retire, and the importance not just of 
succession planning, but for on-boarding of those who do come 
into those positions, especially in the first probationary 
year. No matter what training they have had, they are going to 
face issues and problems that they had not anticipated. So, the 
mentoring and the coaching that should be available during that 
year is very important. Though, overall, our biggest concern, 
frankly, is the next generation----
    Senator Begich. Right.
    Ms. Bonosaro [continuing]. And whether people of quality, 
really high-quality candidates, as Max has suggested, are going 
to want these jobs, because there are so many detractors right 
now.
    Senator Begich. Thank you. Very good. Let me--go ahead.
    Ms. Kelley. I think the idea of double-encumbering to train 
is a smart one from a just common sense perspective and a 
textbook perspective. The agencies where I represent employees 
do not have the money to backfill the vacancies they have----
    Senator Begich. That is the issue.
    Ms. Kelley [continuing]. Much less double-encumber. Now, 
many of them have occupations where there are multiple 
employees in the occupation. There is no reason they could not 
fill the vacant position and then use the employees who are 
here to train.
    Senator Begich. Got it.
    Ms. Kelley. And, I would also say, to implement this phased 
retirement. I mean, we are waiting for the final regulations 
from OPM, but all the things I am hearing from agencies is 
there is going to be a great reluctance to implement this, and 
that would be a tragedy. We worked for 5 years to get this 
passed because it was smart for the agencies and good for the 
workforce.
    Senator Begich. Right.
    Ms. Kelley. So, I am hoping that it will be implemented as 
intended, but right now, I am not seeing those signs.
    Senator Begich. OK. Let me----
    Mr. Cox. Senator, I think one of the best example I know 
are the claims examiners in the VA. If you hired one today, it 
takes 2 years from today before that person is able to function 
at a journeyman level. There is no pre-training that you can 
do. It has to be all on-the-job training. VA, as both of you 
well know, has been underfunded, not able to continue to add 
more claims examiners, knowing that 30, 40 percent of their 
current workforce could disappear within the next 5 years and 
that it would take 2 years to bring those people up to speed.
    So, I think trying to get work-arounds in Congress where 
agencies can double-encumber those jobs, realizing that you are 
going to have to be able to do that on-the-job training. You 
can hire a physician or a nurse at the VA tomorrow, bring them 
in, give them orientation. They can function in a short period 
of time. But, there are many jobs, like claims examiners there, 
Social Security, Department of Labor, where it is all on-the-
job training, and that is going to be a serious situation that 
is already a crisis.
    Senator Begich. Thank you. Mr. Chairman, could I just take 
a few, just to----
    Senator Tester. Yes.
    Senator Begich. My next issue, and this is on the windfall, 
I know, Colleen, you have worked on this. You have testified in 
other issues as to the windfall elimination provision, which, 
as you know, deprives working people their kind of fair share 
of Social Security they have earned, not that is given to them. 
They have earned it. I have sponsored a bipartisan bill, S. 
896, to kind of solve this problem.
    When you look at this issue--it is amazing to me, every 
time I bring this up to people, they do not see it, I mean, the 
fact that many employees are impacted by it. Folks work for the 
government. The government did not pay in Social Security, but 
yet then they go and work a second job. Maybe it is part-time, 
maybe it is full-time or a second career. They pay into Social 
Security. They pay like everyone else. They get their 40 units 
of credit.
    Then, when they get to time to retire, they find out, well, 
that is great, except now so you have this other retirement and 
we are going to deduct against your Social Security, which is 
amazing to me, that people--but yet I could have three private 
sector job retirements and I do not get any deduction against 
my Social Security. But, because you worked for the 
government--some, not all, as you know--you get penalized. It 
makes no sense to me.
    Can you just--first off--anyone can respond to this, but I 
want to tap Colleen, because I know you have talked about this 
before--but give me a sense from your union. I am assuming you 
support this type of legislation----
    Ms. Kelley. Absolutely.
    Senator Begich [continuing]. To fix this once and for all.
    Ms. Kelley. Yes, and we are very grateful you have 
introduced this legislation, Senator. It has been a long time 
that this has penalized Federal employees, and----
    Senator Begich. And State employees.
    Ms. Kelley. Yes----
    Senator Begich. In my case, teachers are getting penalized 
left and right.
    Ms. Kelley. And it is very real money. It is not $10 and 
$20. I mean, for some in the formula, they can lose their 
entire Social Security benefit----
    Senator Begich. Right.
    Ms. Kelley [continuing]. And it could impact them in the 
$800, $900 a month range, which really affects just their 
ability to live.
    Senator Begich. And this is Social Security--make sure I am 
saying this right--that they have paid into, got their credits 
like everyone else----
    Ms. Kelley. Yes.
    Senator Begich. They expected a certain amount of money, 
and they get penalized, really, because they had two jobs.
    Ms. Kelley. Yes.
    Senator Begich. And, because that one job did not pay into 
Social Security but they had a different kind of retirement 
system, they get penalized. Am I saying that right?
    Ms. Kelley. Yes, and that is the windfall----
    Senator Begich. I know this is what it means.
    Ms. Kelley. No, you are right. You got it.
    Senator Begich. I am just leading it because it is so 
logic--I mean, it just does not make any sense.
    Ms. Kelley. I knew you had it right when I saw your 
proposed legislation---- [Laughter.]
    Which we vehemently support, yes.
    Senator Begich. Well, I do not know if anyone else----
    Ms. Kelley. Thank you.
    Senator Begich. No, thank you. I do not know if anyone 
else--my assumption is, when people learn about this, it also 
is a problem for people who say, gee, I have worked maybe a 
Social Security job. Now they look at the Federal Government 
and say, I would like to work there, but how is this going to 
affect my retirement, because maybe they are in their mid-40s, 
50, and they have gotten their 40 credits of Social Security, 
but then they go over here and they realize, you mean I am 
going to get deducted here? They have to put that into their 
calculation, right, when they are looking at job opportunities 
for the Federal Government.
    Ms. Kelley. Yes.
    Senator Begich. Does anyone else want to quickly respond to 
that? I mean, I just find it so outrageous. Part of my view is, 
give them their money back, then, with interest, if you are 
going to take it away from them after they earned it.
    Mr. Cox. You know that AFGE strongly supports this, sir.
    Senator Begich. I know, yes.
    Mr. Cox. Strongly supports it.
    Senator Begich. Thank you.
    Mr. Chairman, I appreciate you giving me a little 
discussion on that. It is why I introduced the bill and why it 
has good bipartisan support. But, it is just amazing to me that 
hard-working folks, because they did two jobs, three jobs, I 
mean, teachers in my State, same situation. They get penalized. 
And a lot of teachers, as you know, a former member of the 
school board, you know what it means that you need a summer 
job. They are doing something and getting another income 
stream, because maybe that teacher's salary is not doing enough 
for their large family or their growing family, and it is mind-
boggling to me. But, thank you very much for your comments.
    Ms. Kelley. Thank you.
    Senator Begich. Thanks for all of you being here. Mr. 
Chairman, thanks for holding this hearing.
    Senator Tester. Senator Begich, I appreciate you offering 
that bill, too. I think it is one of those--not little, if you 
are impacted--big things that sends just the wrong message to 
the folks about their worth to, whether you are talking 
teachers, to our kids, or whether it is some other area.
    I want to talk about a Postal reform piece of legislation 
that came out that I know that you folks have spent some time 
reviewing. It recently passed out of Committee with some 
changes to the Federal Employees Compensation Act (FECA). The 
provision would count Workers' Compensation for all Federal 
employees, not just Postal workers, and I have expressed my 
concerns about cutting disability benefits at retirement age 
across the Federal workforce.
    Those of you that want to comment on that, I think there 
are studies out that show that it would disproportionately hurt 
the low-wage earners that are in the Federal workforce. Could 
you highlight the potential impact of that cut that is in that 
Postal legislation, if you might, those of you that feel 
comfortable in addressing it, and what the long-term impacts--
and short-term impacts could be.
    Mr. Cox. Senator, having worked in the VA many years, I saw 
nursing assistants get severe back injuries that they lost 
their entire quality of life. These are GS-5 employees. By 
helping veterans, they were injured through no fault of their 
own.
    Senator Tester. Right.
    Mr. Cox. And, to cut those benefits for someone who has 
been injured on the job, that is just not right, sir.
    Senator Tester. OK.
    Mr. Cox. It is not right. And, I agree with you. I think it 
would affect a lot of lower-grade employees. Yes, maybe a 
physician could do some form of work if they had some type of 
back injury, but a nursing assistant is going to have to lift 
patients all day long.
    Senator Tester. Right.
    Mr. Cox. So, it is not one of those things that--some jobs, 
you just cannot do forever.
    Senator Tester. OK. Would anybody else like to comment on 
that?
    Let me talk--I did not get into contracting much with Ms. 
Archuleta and the last panel, but it is an area that I have got 
some concerns about. I would like to get your guys' 
perspective. Maybe my concerns are real, maybe they are not. I 
think my perspective is there is a place for it, but I think at 
this point in time, it is being overused and it has affected 
some of the jobs that have to be done with less accountability. 
And, quite frankly, a lot of these are government functions 
that need to happen.
    Could you guys talk about contracting versus the Federal 
workforce and where we are, from your perspective, overall, if 
we are contracting out too much or if the balance is right. Go 
ahead, David.
    Mr. Cox. Senator, I believe the Congress passed in-sourcing 
legislation several years ago.
    Senator Tester. Yes.
    Mr. Cox. I have met with OMB on several occasions, asking 
for their guidance to in-source work and as of yet have not 
been able to get that guidance.
    Senator Tester. OK.
    Mr. Cox. Agencies tell us they are looking for guidance to 
in-source work. I met yesterday at the Department of Labor with 
the new Secretary there. They in-sourced work just a couple 
years ago that saved the government over $5 million, and it was 
just bringing in work of 126 employees saved the Federal 
Government over $5 million, and the Secretary made a strong 
commitment to continue to look and to do an inventory of the 
work that had been contracted out, and I have the statistics. 
He has over $2 billion in service contracts. He appreciated me 
bringing that to his attention and made a commitment. But, I 
think you get the better bang for the buck when you have 
Federal employees doing it.
    Senator Tester. Would anybody else like to comment on 
contracting versus Federal employees? Colleen, Carol, or Max. 
Max, go ahead.
    Mr. Stier. There is no question that there are a lot of 
things that are being contracted out that should not be, and my 
view is that one of the strong reasons for this is that the 
system we have is making suboptimal choices the right thing for 
people to do.
    Let me give you an example. We talked about the hiring 
process. When the hiring process is broken and it is difficult 
for people to get the right talent inside agencies, it creates 
a big incentive to look outside government where you can 
contract for that service and not have to go through the crazy 
hiring process.
    Senator Tester. Got you.
    Mr. Stier. I believe that a lot of poor choices are being 
made because of the system failures that we have. In essence, 
we need to change that system and by doing that, we will have a 
more cost-effective government, more work will be done inside 
government, and smarter choices will be made.
    Senator Tester. Yes. All right. Go ahead.
    Ms. Kelley. Last summer, during the sequestration, I found 
it highly offensive that agencies were paying contractors while 
they were also serving unpaid furlough notices to front-line 
employees who do the work of our country every day. Now, what I 
also saw was agencies started looking closer at their contracts 
that were out there, because, for the most part, they were 
trying to minimize the number of unpaid furlough days. But, 
they took a look at things I think they should have looked at 
3, 4, and 5 years ago.
    Senator Tester. Yes.
    Ms. Kelley. So, I think that has to continue now, that 
scrub of that list or whatever they want to call it. But, I do 
not think that the balance is right yet. I think there is still 
a lot of work out there that should be done by front-line 
employees. And, as importantly, in these years with very tight 
budgets, I think that money should be looked at to be spent on 
front-line employees who are doing the mission work of the 
agency.
    Senator Tester. Good. Carol.
    Ms. Bonosaro. I would like to add to that. I think that one 
of the things that would help a great deal, but I do not expect 
to see it in my lifetime, is the ability to manage the budget 
and stop counting heads and full-time equivalents. That is what 
also helps drive contracting.
    The other issue, I think, that we have never really 
entirely resolved, unless I have missed it, is the issue of 
what is inherently governmental. A number of years ago, we had 
an OMB Director who famously announced at one of our 
conferences that if you could find it in the Yellow Pages, the 
government should not be doing it. And I said, well, there are 
lots of attorneys in the Yellow Pages, too, but we have never 
really addressed that question head-on, either.
    Senator Tester. Yes.
    Ms. Bonosaro. So, I think all of this comes together in a 
way that results in probably a lot more contracting than might 
otherwise be the case.
    Senator Tester. Yes. I would agree. I think it is an issue 
that we need to address as a Congress, quite frankly, because, 
from my perspective, I think they may be doing a great job in 
many cases, but the whole thing with uses and the lack of 
accountability, if that did not get your attention, nothing 
will.
    I just want to thank you guys for your testimony and your 
straightforwardness in answering the questions. We have covered 
a fair amount of ground today. It is clear that we have some 
work to do. Whether it is to recruit, to build, or retain a 
skilled and highly capable Federal workforce, we have our hands 
full.
    As I said earlier, if we seek an effective and efficient 
government, we need to ensure that Federal workers are able to 
make a living at their jobs and we need to ensure they have the 
opportunity to grow and feel valued. I think this hearing 
offers some ways we could do that. I look forward to working 
with not only the Ranking Member, but any of our colleagues on 
this Subcommittee or the Committee as a whole on these issues.
    The hearing record is going to remain open for 15 days for 
any additional comments or questions.
    Once again, I very much appreciate both the first panel, 
but you guys, since you are here, taking time out of your busy 
schedule to be here and give us your input. I look forward to 
working with you all to move the Federal workforce issue.
    And, finally, I will just say this. I have two jobs in this 
world. I am a U.S. Senator from Montana, but I also farm, and 
whether we like to call ourselves truly independent people in 
agriculture or not, we depend a lot on Farm Service Agency 
employees to make sure that we get the information so we can 
make informed decisions. David brought up the Border Patrol. We 
talked about VA. You can go down the list, Postal employees, 
just go down the list. Every day, something is touched--our 
lives are touched by a Federal employee. And if that Federal 
employee feels valued, I can tell you, just as in my job, if I 
feel valued, you are going to do a much better job.
    Thank you all for being here, and this Committee hearing is 
adjourned.
    [Whereupon, at 4:46 p.m., the Subcommittee was adjourned.]
    
                            A P P E N D I X

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