[Congressional Record Volume 149, Number 170 (Friday, November 21, 2003)]
[Senate]
[Page S15400]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         CBO SUMMARY OF S. 1522

  Ms. COLLINS. I ask unanimous consent that the following CBO summary 
of the cost estimate regarding S. 1522 be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:


               congressional budget office cost estimate

     S. 1522--GAO Human Capital Reform Act of 2003
       Summary: S. 1522 would authorize the General Accounting 
     Office (GAO) to modify its personnel and workforce practices 
     to allow greater flexibility in determining pay increases, 
     pay retention rules, and other compensation matters. The bill 
     also would permanently extend GAO's authority to offer 
     separation (buyout) payments and early retirement to 
     employees who voluntarily leave GAO. Finally, S. 1522 would 
     rename GAO as the Government Accountability Office.
       CBO estimates that enacting S. 1522 would increase direct 
     spending for retirement annuities and related health benefits 
     by about $1 million in fiscal year 2004, by $19 million over 
     the 2004-2008 period, and by $40 million over the 2004-2013 
     period. Several provisions of S. 1522 could affect GAO 
     employee compensation costs, but the net budgetary effect of 
     such provisions would depend on how GAO exercises its new 
     authorities and on whether future agency appropriations are 
     adjusted to reflect any savings or costs. Finally, we expect 
     that any additional discretionary costs associated with 
     changing the agency's name would not be significant.
       S. 1522 contains no intergovernmental or private-sector 
     mandates as defined in the Unfunded Mandate Reform Act (UMRA) 
     and would not affect the budgets of state, local, or tribal 
     governments.
       Estimated costs to the Federal Government: The estimated 
     impact of S. 1522 on direct spending is shown in the 
     following table. The costs of this legislation fall within 
     budget function 800 (general government).

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                                                                                        By fiscal year, in millions of dollars--
                                                               -----------------------------------------------------------------------------------------
                                                                  2004     2005     2006     2007     2008     2009     2010     2011     2012     2013
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                                                               CHANGES IN DIRECT SPENDING
 
Estimated budget authority....................................        1        3        5        5        5        5        4        4        4        4
Estimated outlays.............................................        1        3        5        5        5        5        4        4        4        4
--------------------------------------------------------------------------------------------------------------------------------------------------------

     Basis of estimate
       Direct spending
       S. 1522 would give GAO permanent authority to offer 
     retirement to employees who voluntarily leave the agency 
     early. GAO's existing buyout authority, which will expire on 
     December 31, 2003, allows the agency to offer certain 
     employees a lump sum payment of up to $25,000 to voluntarily 
     leave the agency. In addition, certain qualified employees 
     who leave (whether they collect a separation payment or not) 
     are entitled to receive immediate retirement annuities 
     earlier than they would have otherwise. CBO estimates that 
     extending this authority would increase direct spending by $1 
     million in 2004, by $19 million over the 2004-2008 period, 
     and by $40 million over the 2004-2013 period.
       Based on information provided by GAO about use of its early 
     retirement authority over the past several years, CBO 
     estimates that each year about 35 agency employees would 
     begin receiving retirement benefits three years earlier than 
     they would have under current law. Inducing some employees to 
     retire early results in higher-than-expected benefits from 
     the Civil Service Retirement and Disability Fund (CSRDF). CBO 
     estimates that the additional retirement benefits would 
     increase direct spending by $1 million in 2004, by $16 
     million over the 2004-2008 period, and by $32 million over 
     the 2004-2013 period.
       Extending GAO's buyout and early retirement authority also 
     would increase direct spending for federal retiree health 
     benefits. Many employees who retire early would continue to 
     be eligible for coverage under the Federal Employees' Health 
     Benefits (FEHB) program. The government's share of the 
     premium for retirees is classified as mandatory spending. 
     Because many of those accepting the buyouts under the bill 
     would have retired later under current law, mandatory 
     spending on FEHB premiums would increase. CBO estimates these 
     additional benefits would increase direct spending by less 
     than $500,000 in 2004, by $3 million over the 2004-2008 
     period, and by $8 million over the 2004-2013 period.
       Spending subject to appropriation
       The authorities provided by S. 1522 would allow GAO to 
     create a performance-based employee compensation system to 
     govern basic pay adjustments, pay retention for employees 
     affected by reductions in force, relocation reimbursements, 
     and annual leave accruals beginning in fiscal year 2006. 
     (Under existing law, GAO is required to follow personnel 
     management policies determined by the Office of Personnel 
     Management.) Implementing the new authorities that would be 
     provided by S. 1522 could affect GAO's total costs of 
     providing employee compensation, but CBO cannot predict any 
     cost or saving associated with these new authorities, or the 
     net effect of all such changes on the Federal budget. 
     Ultimately, the net budgetary effect of the proposed 
     authorities would depend on the features of the compensation 
     system adopted by GAO and on how the agency applies that new 
     system to individual employees. Moreover, any resulting 
     savings or costs would only be realized if the agency's 
     annual appropriations are adjusted accordingly.
       Providing GAO with the option of providing voluntary 
     separation payments could also increase GAO's costs, but CBO 
     estimates that any new costs would average less than $500,000 
     annually over the 2004-2013 period. Section 2 of the bill 
     would allow GAO to offer certain employees payments of up to 
     $25,000 to voluntarily leave the agency. The bill also 
     requires that GAO make a deposit amounting to 45 percent of 
     each buyout recipient's basic salary toward the CSRDF. Unlike 
     an increase in retirement benefits, these two payments would 
     be from the agency's discretionary budget and are thus 
     subject to appropriation. Since GAO's current buyout 
     authority was first authorized in October 2000, no one at the 
     agency has received a buyout payment. As such, CBO expects 
     that relatively few employees would receive a buyout payment 
     over the next 10 years and that the cost of any buyout 
     payments and required deposits toward the CSRDF would be 
     negligible in any given year.
       Intergovernmental and private-sector impact: S. 1522 
     contains no intergovernmental or private-sector mandates as 
     defined in UMRA and would not affect the budgets of State, 
     local, or tribal governments.
       Estimate prepared by: Federal Costs: Ellen Hays, Geoffrey 
     Gerhardt, and Deborah Reis. Impact on State, Local, and 
     Tribal Governments: Sarah Puro. Impact on the Private Sector: 
     Paige Piper/Bach.
       Estimate approved by: Peter H. Fontaine, Deputy Assistant 
     Director for Budget Analysis.

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