[House Report 108-586]
[From the U.S. Government Publishing Office]
108th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 108-586
======================================================================
PAY COMPRESSION RELIEF ACT OF 2004
_______
July 7, 2004.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Tom Davis of Virginia, from the Committee on Government Reform,
submitted the following
R E P O R T
together with
ADDITIONAL VIEWS
[To accompany H.R. 3737]
[Including cost estimate of the Congressional Budgt Office]
The Committee on Government Reform, to whom was referred
the bill (H.R. 3737) to increase the minimum and maximum rates
of basic pay payable to administrative law judges, and for
other purposes, having considered the same, report favorably
thereon with amendments and recommend that the bill as amended
do pass.
CONTENTS
Page
Committee Statement and Views.................................... 3
Section-by-Section Analysis...................................... 5
Explanation of Amendments........................................ 8
Committee Consideration.......................................... 8
Rollcall Votes................................................... 8
Application of Law to the Legislative Branch..................... 8
Statement of Oversight Findings and Recommendations of the
Committee...................................................... 9
Statement of General Performance Goals and Objectives............ 9
Constitutional Authority Statement............................... 9
Federal Advisory Committee Act................................... 9
Unfunded Mandate Statement....................................... 9
Committee Estimate............................................... 9
Budget Authority and Congressional Budget Office Cost Estimate... 10
Changes in Existing Law Made by the Bill as Reported............. 10
Additional Views................................................. 14
The amendments are as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE; REFERENCES.
(a) Short Title.--This Act may be cited as the ``Pay Compression
Relief Act of 2004''.
(b) References.--Except as otherwise expressly provided, whenever
in this Act an amendment is expressed in terms of an amendment to a
section or other provision, the reference shall be considered to be
made to a section or other provision of title 5, United States Code.
SEC. 2. AMENDMENTS RELATING TO BASIC PAY.
(a) Administrative Law Judges.--Section 5372(b)(1)(C) is amended by
striking ``may not exceed the rate for level IV'' and inserting ``may
not exceed the rate for level III''.
(b) Contract Appeals Board Members.--Section 5372a is amended--
(1) By striking subsection (b) and inserting the following:
``(b)(1) Rates of basic pay under this section--
``(A) shall consist of--
``(i) the rate for the chairman of an appeals board;
``(ii) the rate for the vice chairman of an appeals
board; and
``(iii) the rate for all other contract appeals board
members;
``(B) shall be initially adjusted by the Office of Personnel
Management and thereafter adjusted under paragraph (2); and
``(C) shall not be greater than the rate of basic pay for
level III of the Executive Schedule nor less than 94 percent of
the rate of basic pay for level IV of the Executive Schedule.
``(2) Subject to paragraph (1)(C), effective at the beginning of
the first applicable pay period commencing on or after the first day of
the month in which an adjustment takes effect under section 5303 in the
rates of basic pay under the General Schedule, each rate of basic pay
for contract appeals board members shall be adjusted by an amount
determined by the President to be appropriate.''; and
(2) by adding after subsection (c) the following:
``(d) The Office of Personnel Management shall prescribe
regulations necessary to administer this section.''.
(c) Certain Senior-Level Positions.--Section 5376(b)(1)(B) is
amended by striking ``level IV'' and inserting ``level III''.
SEC. 3. AMENDMENTS RELATING TO LOCALITY-BASED COMPARABILITY PAYMENTS.
(a) Modified Maximums.--Paragraph (2) of section 5304(g), as
amended by section 1125(a)(1)(A) of the National Defense Authorization
Act for Fiscal Year 2004 (Public Law 108-136; 117 Stat. 1638), is
amended to read as follows:
``(2) The applicable maximum under this subsection shall be--
``(A) level II of the Executive Schedule for positions under
subparagraphs (A)-(D) of subsection (h)(1); and
``(B) level III of the Executive Schedule for any positions
under subsection (h)(1)(E) which the President may
determine.''.
(b) Administrative Appeals Judges.--Section 5304(h)(1), as amended
by section 1125(a)(1)(B) of the National Defense Authorization Act for
Fiscal Year 2004 (Public Law 108-136; 117 Stat. 1638), is amended--
(1) in subparagraph (C), by striking ``and'' at the end;
(2) by redesignating subparagraph (D) as subparagraph (E);
and
(3) by inserting after subparagraph (C) the following:
``(D) a position to which section 5372b applies (relating to
administrative appeals judges); and''.
SEC. 4. TECHNICAL AND CONFORMING AMENDMENTS.
Section 5304(h)(2)(B), as amended by section 1125(a)(1)(C) of the
National Defense Authorization Act for Fiscal Year 2004 (Public Law
108-136; 117 Stat. 1638), is amended--
(1) in clause (i)--
(A) by striking ``(A) through (C)'' and inserting
``(A) through (D)''; and
(B) by striking ``(vii)'' and inserting ``(vi)''; and
(2) in clause (ii), by striking ``(1)(D)'' and inserting
``(1)(E)''.
SEC. 5. APPLICABILITY.
(a) In General.--The amendments made by this Act shall--
(1) for purposes of computing any rate of compensation for
service performed in any pay period beginning before the date
specified under subsection (b), be treated as if they had never
been enacted; and
(2) for purposes of computing any rate of compensation for
service performed in any pay period beginning on or after the
date specified under subsection (b), take effect as if included
in the enactment of the National Defense Authorization Act for
Fiscal Year 2004 (Public Law 108-136; 117 Stat. 1392).
(b) Date Specified.--The date specified under this subsection shall
be the earlier of--
(1) the first day of the first pay period beginning at least
90 days after the date of the enactment of this Act; or
(2) such other date (not earlier than the date of the
enactment of this Act) as the Office of Personnel Management
may determine.
SEC. 6. REPORTING REQUIREMENT.
(a) In General.--Not later than 6 months after the date of the
enactment of this Act, the Office of Personnel Management shall submit
to the Committee on Government Reform of the House of Representatives
and the Committee on Governmental Affairs of the Senate a written
report containing the following:
(1) A list of all Executive Schedule positions, and the rate
of basic pay in effect for and the total number of individuals
occupying each such position.
(2) A comparison of the rates of basic pay for administrative
law judges, administrative appeals judges, and contract appeals
board members (before and after taking comparability pay into
account) with--
(A) the rates of basic pay for Executive Schedule
positions; and
(B) the rates of basic pay for United States
magistrate judges, United States bankruptcy judges,
judges of a United States district court, and judges of
a United States court of appeals, respectively.
(3) A determination of whether rates of basic pay for
administrative law judges, administrative appeals judges, and
contract appeals board members are incongruous with the rates
of basic pay for the positions referred to in paragraphs (2)(A)
and (2)(B), respectively.
(4) A recommendation on the extent to which the rates of
basic pay for Executive Schedule positions should be adjusted
(if at all), based on any determination under paragraph (3).
(5) Any other information or recommendation which the Office
of Personnel Management considers pertinent to the issue of
appropriate rates of basic pay for Executive Schedule
positions.
(b) Data and Methodology.--The report of the Office of Personnel
Management under this section shall include a statement identifying the
data and methodology used in preparing such report.
(c) Definitions.--For purposes of this section--
(1) the term ``Executive Schedule positions'' means positions
under the Executive Schedule under subchapter II of chapter 53
of title 5, United States Code, and all other positions in the
executive branch the annual rates of basic pay for which are
individually fixed, or expressly authorized to be fixed, by
statute, at the rate provided for a level of the Executive
Schedule or at a rate determined by reference to a level of the
Executive Schedule, but does not include administrative law
judges, contract appeals board members, or administrative
appeals judges;
(2) the terms ``administrative law judge'', ``contract
appeals board member'', and ``administrative appeals judge''
have the meanings given them by sections 5372, 5372a, and 5372b
of title 5, United States Code, respectively; and
(3) the term ``comparability pay'' means comparability pay
under section 5304 of title 5, United States Code, or similar
provision of law.
Amend the title so as to read:
A bill to adjust the rates of pay payable to administrative law
judges, and for other purposes.
Committee Statement and Views
PURPOSE AND SUMMARY
H.R. 3737, the Pay Compression Relief Act of 2004, is
intended to raise the current cap on pay that results in pay
compression of pay rates of higher level administrative law
judges, members of contract appeals boards, and certain senior
level employees outside the Senior Executive Service. The rates
of basic pay for these employees would be set administratively,
subject to a new, higher limit set in law, together with a new
higher cap on locality pay. This allows the Executive branch to
establish salaries that reflect differences in position
responsibility.
BACKGROUND AND NEED FOR LEGISLATION
The Committee is concerned by the problem of pay
compression among administrative law judges (ALJs) and certain
other categories of employees outside the Senior Executive
Service (SES). Pay compression causes employees at lower levels
of responsibility to be paid at the same rate of pay as higher-
responsibility employees. Until enactment of the National
Defense Authorization Act for Fiscal Year 2004, the employees
covered by H.R. 3737 were subject to the same pay cap as
members of the SES. Due to the recognized problem of pay
compression in the SES, section 1125 of the Act amended title 5
of the United States Code to relieve pay compression in the SES
by lifting the cap on pay from executive level III (currently
$145,600) to executive level II ($158,100) for high-performing
executives in agencies with qualifying performance appraisal
systems. The Act also authorizes employing agencies to set
individual SES pay at any rate within a range of $104,927 (120%
of grade 15 of the General Schedule) to a maximum of EL-III or,
for agencies with certified performance appraisal systems, EL-
II.
The approximately 1,300 ALJs in nearly 30 Federal agencies
across the government are responsible for hearing disputes over
agency decisions. Most of them work at the Social Security
Administration, where they make judgments on benefits appeals.
ALJs in other agencies adjudicate cases involving a range of
significant and diverse regulatory matters that may affect
millions of people and involve billions of dollars. Due to the
need for independent decision-making by ALJs, their pay is not
subject to performance appraisal ratings.
The current EL-III cap on combined basic and locality pay
of ALJs has resulted in a serious pay compression problem:
Both levels of supervisory ALJs in all 32
localities receive the same pay.
ALJs at the highest non-supervisory level (AL-3F)
in 11 localities--including Boston, Chicago, Los Angeles, New
York and San Francisco--receive the same pay as supervisors.
In two localities (San Francisco and Houston),
ALJs at the next level down (AL-3E) also receive the same pay
as supervisors.
In another seven localities, the AL-3F rate is
within about $1000 per year of the supervisory rate.
The magnitude of this problem threatens the ability to hire
and retain an appropriate number of well-qualified ALJs. This
legislation addresses ALJ pay compression by authorizing OPM to
adjust upward the maximum rates of basic pay for ALJs (up to a
cap of EL-III), while continuing their eligibility for locality
pay increases subject to a new cap of (EL-II).
In the case of members of boards of contract appeals, when
basic pay is increased by locality pay, the Chairman and Vice
Chairman in every locality are capped at EL-III ($145,600). In
18 of the 32 locality pay areas, the other members of these
boards also receive the capped rate, so that the majority of
these employees all receive the same pay despite differing
levels of responsibility. The amendment would allow OPM to
alleviate this severe pay compression, increasing the combined
basic plus locality pay cap to EL-II.
Senior level (SL) and scientific and professional (ST)
positions are also capped under current law at EL-IV for basic
pay and EL-III for combined basic and locality pay. By law,
their basic pay is set by their employing agency head, subject
to OPM regulations. The amendment would raise the locality pay
cap to EL-II, but does not otherwise change the ability of
agency heads to determine the appropriate pay rate in each
case.
The Subcommittee expects OPM to take action to alleviate
pay compression for ALJs and members of boards of contract
appeals as soon as possible following enactment of this
legislation and to encourage agency heads to make appropriate
use of their new flexibility in setting salaries of SL/ST
employees.
LEGISLATIVE HISTORY
On January 28, 2004, Subcommittee Chairwoman Jo Ann Davis
introduced H.R. 3737. That same day, the bill was referred to
the Government Reform Committee, which referred the bill to the
Subcommittee on Civil Service and Agency Organization on
January 30. On February 10, a Subcommittee hearing was held,
titled ``Esprit de Corps: Recruiting and Retaining America's
Best for the Federal Civil Service.'' The witnesses included
Ronald Sanders, Associate Director of the Office of Personnel
Management, and the Honorable Kevin Dugan, representing the
Association of Administrative Law Judges. At a March 17, 2004,
business meeting, the Subcommittee marked up H.R. 3737.
Chairwoman Jo Ann Davis offered an amendment in the nature of a
substitute and Ranking Minority Member Danny Davis offered an
amendment to the substitute. Mr. Davis's amendment was approved
by voice vote and the substitute, as amended, was then approved
by voice vote, and the amended bill was reported out of the
Subcommittee. On April 1, 2004, the Government Reform Committee
approved the bill as reported out of the Subcommittee and
ordered the bill favorably reported to the House of
Representatives.
Section-by-Section Analysis
Section 1. Short title; references
The short title of H.R. 3737, as amended, is the Pay
Compression Relief Act of 2004.
Provisions of the bill that amend a section of law or other
provision are references to sections or provisions of title 5,
United States Code, unless otherwise specified.
Section 2. Amendments relating to basic pay
Administrative law judges, contract appeals board members,
and certain senior level positions. Subsections (a)-(c) would
increase the upper limit on basic pay for administrative law
judges (ALJs), board of contract appeals (BCA) members, and
certain senior level (SL) and scientific and professional (ST)
positions by amending sections 5372, 5372a, and 5376 of title
5. The new upper limit would rise by $8,700 per year from
executive level IV ($136,900) to executive level III
($145,600). The lower limit on basic pay for these employees
would remain unchanged at 65% of EL-IV for ALJs, 94% of EL-IV
for BCA members, and 120% of the minimum rate of grade 15 of
the General Schedule ($104,927) for SL/ST positions. The new
basic pay ranges are summarized below:
----------------------------------------------------------------------------------------------------------------
Minimum basic pay Current maximum basic pay Maximum basic pay under H.R.
------------------------------------------------------------------ 3737 as amended
-------------------------------
----------------------------------------------------------------------------------------------------------------
ALJ 65% of EL-IV...... $88,985 EL-IV............. $136,900 EL-III........... $145,600
CAB 94% of EL-IV...... 128,686 EL-IV............. 136,900 EL-III........... 145,600
SL/ST 120% of GS-15/1... 104,927 EL-IV............. 136,900 EL-III........... 145,600
----------------------------------------------------------------------------------------------------------------
Under subsection (a), the actual rates of basic pay for
ALJs will continue, as under current law, to be set within the
statutory limits in accordance with OPM regulations and the
President will determine the amount of General Schedule
increases that will be applied to ALJs' basic pay. Under the
current basic pay schedule the actual minimum rate of basic pay
for ALJs is $91,200 (about 66.6% of EL-IV) and the actual
maximum rate is $136,900. Within this range, there are three
levels: AL-1 is for Chief ALJs in larger offices, AL-2 is for
Deputy Chief ALJs and Chief ALJs in smaller offices, and AL-3
is for non-supervisory ALJs. AL-1 and AL-2 each have a single
rate of basic pay, currently set at 100% and 97.4% of EL-IV,
respectively. By law, AL-3 is divided into six rates of basic
pay, and employees can move from one rate to the next after
periods of service set out in statute at 5 U.S.C. 5372. An ALJ
who enters his position at AL-3A will progress to AL-3B after
52 weeks, AL-3C after another 52 weeks, and AL-3D after another
52 weeks, AL-3E after another 104 weeks and finally to AL-3F
after another 104 weeks. The current rates of basic pay are as
follows:
AL-3A......................................................... $91,200
AL-3B......................................................... 98,100
AL-3C......................................................... 105,200
AL-3D......................................................... 112,200
AL-3E......................................................... 119,200
AL-3F......................................................... 126,100
AL-2.......................................................... 133,300
AL-1.......................................................... 136,900
Subsection (b) addresses the basic pay of members of boards
of contract appeals. Section 5372a of title 5 currently sets
the rates of basic pay as follows:
------------------------------------------------------------------------
------------------------------------------------------------------------
Chairman............................ EL-IV ($136,900).
Vice chairman....................... 97% of EL-IV ($132,793).
Other members....................... 94% of EL-IV ($128,686).
------------------------------------------------------------------------
The amendment would establish a new range of basic pay for
these employees: the minimum basic pay would remain at the
current 94% of EL-IV and the maximum would increase to EL-III
($145,600). The subsection requires OPM to initially adjust the
pay of current members of these boards and the President would
then determine the amount of each General Schedule increase by
which each rate of basic pay for these employees will be
adjusted on an annual basis.
Subsection (c) addresses the pay of certain senior level
(SL) and scientific and professional (ST) employees, whose pay
is set under section 5376 of title 5. These are positions above
GS-15 but outside the Senior Executive Service. The head of
each employing agency sets the basic pay of these positions,
subject to OPM regulations, within a range of not less than
120% of grade 15, step 1, of the General Schedule and not more
than EL-IV. The employing agency also determines the amount of
basic pay adjustments for these positions when General Schedule
basic pay rates are adjusted. Subsection (c) would raise the
current cap on basic pay in these positions to EL-III, but does
not change the lower end of the range under current law (120%
of grade 15, step 1).
Section 3. Amendments relating to locality-based comparability payments
Subsection (a) raises the cap on combined basic pay and
locality pay under section 5304 of title 5 from EL-III
(currently $145,600) to EL-II ($158,100) for administrative law
judges, members of boards of contract appeals, and certain
senior level (SL) andscientific and professional (ST) employees
whose basic pay is set under section 5376 of title 5. Raising this cap
to EL-II will allow relief from the severe pay compression now
affecting employees who are not now receiving the full locality pay
amount due to the EL-III cap.
Subsection (b) ensures that administrative appeals judges
(AAJs) will continue to be eligible for locality pay under
section 5304 of title 5. AAJs' basic pay is set under section
5372b of title 5, and is subject to a statutory minimum of 65%
of EL-IV (same as the lower limit on ALJ basic pay) and a
statutory maximum equal to the rate of basic pay for the AL-3F
level, the highest rate in the ALJ pay schedule below the
Deputy Chief ALJ level. Within these limits, the basic pay of
AAJs (employees whose primary duties involve reviewing ALJ
decisions and who are not classified above GS-15) is set by the
employing agency head, subject to OPM regulations.
Subsection (b) does not change the statutory relationship
of AAJ pay to ALJ pay. However, a technical change is included
to ensure that AAJs continue to be eligible for locality pay.
Current section 5304(h)(1)(D), the provision allowing AAJs to
receive locality pay, restricts locality pay eligibility to
employees whose basic pay is no higher than EL-IV. Under the
authority to set ALJ pay in section 2 of the bill, the basic
pay rate for AL-3F may exceed EL-IV. Because AAJs' basic pay
may exceed EL-IV under the new authority, subsection (b) amends
section 5304(h)(1) to specify that AAJs will be eligible for
locality pay.
Section 4. Technical and conforming amendments
Section 1125(a)(1)(C) of the National Defense Authorization
Act for Fiscal Year 2004 (Public Law 108-136; 117 Stat. 1638)
created a reference in section 5304(h)(2)(B) of title 5 to a
non-existent clause (vii) of section 5304(h)(1). That reference
is being changed to clause (vi). The correction of the other
error in the Act (a reference in section 5304(g)(2)(A) to
``subparagraphs (A)-(D)'' that should have been a reference to
``subparagraphs (A)-(C)'') is obviated by the addition of a
subparagraph (D) to section 5304(h)(1), the subparagraph that
ensures that AAJs will continue to be eligible for locality pay
upon implementation of the bill (see section 3). The other
conforming amendment in this section is the re-designation of
current subparagraph (D) of section 5304(h)(1) as subparagraph
(E), which is necessary due to insertion of the new
subparagraph (D) in paragraph (h)(1).
Section 5. Applicability
For the purpose of computing increases in pay as authorized
by H.R. 3737, the effective date is the first day of the first
pay period beginning at least 90 days after enactment, or
another date established by OPM, whichever is earlier. Pay
increases authorized by the bill will be computed as if
included in the National Defense Authorization Act for Fiscal
Year 2004, enacted November 24, 2003, but no increase will
apply to service performed before the date established under
this section.
Section 6. Reporting requirement
H.R. 3737 would require the Office of Personnel Management
to submit to the House Government Reform Committee and the
Senate Governmental Affairs Committees a report containing:
A list of all Executive Schedule positions
and the rate of basic pay for each one, with the total
number of incumbents in each such position;
A comparison of the pay rates for ALJs,
AAJs, and BCA members with the pay rates (before and
after taking locality pay into account) for Executive
Schedule positions and U.S. magistrate judges,
bankruptcy judges, and district and appeals court
judges;
A determination of whether ALJ, AAJ, and CAB
member rates of pay are incongruous with rates for
Executive Schedule positions and those of the above-
mentioned judges;
A recommendation on adjusting pay under the
Executive Schedule; and
Any other information or recommendation OPM
considers pertinent to this matter.
OPM is required to include a statement identifying the data
and methodology used in preparing the report, which is due to
the Committees no later than 6 months after enactment of H.R.
3737.
Explanation of Amendments
The provisions of the substitute are explained in this
report.
Committee Consideration
On April 1, 2004, the Committee met in open session and
ordered reported favorably the bill, H.R. 3737, as amended, by
voice vote, a quorum being present.
Rollcall Votes
No rollcall votes were held.
Application of Law to the Legislative Branch
Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch where the bill relates to the terms and conditions of
employment or access to public services and accommodations.
This bill would raise the current cap on pay that results in
pay compression of pay rates of higher leveladministrative law
judges, members of contract appeals boards, and certain senior level
employees outside the Senior Executive Service.
Legislative branch employees that are subject to the
General and Executive Pay Schedules may be eligible for the
benefits provided by this legislation.
Statement of Oversight Findings and Recommendations of the Committee
In compliance with clause 3(c)(1) of rule XIII and clause
(2)(b)(1) of rule X of the Rules of the House of
Representatives, the Committee's oversight findings and
recommendations are reflected in the descriptive portions of
this report.
Statement of General Performance Goals and Objectives
In accordance with clause 3(c)(4) of rule XIII of the Rules
of the House of Representatives, the Committee's performance
goals and objectives are reflected in the descriptive portions
of this report.
Constitutional Authority Statement
Under clause 3(d)(1) of rule XIII of the Rules of the House
of Representatives, the Committee must include a statement
citing the specific powers granted to Congress to enact the law
proposed by H.R. 3737. Article I, Section 8, Clause 18, the
Necessary and Proper Clause, of the Constitution of the United
States grants the Congress the power to enact this law.
Federal Advisory Committee Act
The Committee finds that the legislation does not establish
or authorize the establishment of an advisory committee within
the definition of 5 U.S.C. App., Section 5(b).
Unfunded Mandate Statement
Section 423 of the Congressional Budget and Impoundment
Control Act (as amended by Section 101(a)(2) of the Unfunded
Mandate Reform Act, P.L. 104-4) requires a statement whether
the provisions of the report include unfunded mandates. In
compliance with this requirement the Committee has received a
letter from the Congressional Budget Office included herein.
Committee Estimate
Clause 3(d)(2) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison by the
Committee of the costs that would be incurred in carrying out
H.R. 3737. However, clause 3(d)(3)(B) of that rule provides
that this requirement does not apply when the Committee has
included in its report a timely submitted cost estimate of the
bill prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act.
Budget Authority and Congressional Budget Office Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause (3)(c)(3) of rule XIII of the Rules
of the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee has received
the following cost estimate for H.R. 3737 from the Director of
Congressional Budget Office:
H.R. 3737--Pay Compression Relief Act of 2004
H.R. 3737 would raise the caps on combined basic and
locality pay from Executive Schedule Level III (currently
$145,600) to Executive Schedule Level II (currently $158,100)
for administrative law judges, contract appeals board members,
and senior level and scientific and professional employees. It
also would direct the Office of Personnel Management to conduct
a study comparing rates of pay for those employees with pay for
other high-level federal employees.
Based on information from the Office of Personnel
Management, CBO estimates that the cost of raising the caps for
the affected employees would be about $1 million in fiscal year
2005. Over the 2005-2009 period, implementing the legislation
would cost about $6 million, subject to the availability of
appropriated funds. H.R. 3737 would not affect direct spending
or revenues.
The cost of this legislation arises because the salaries of
roughly 430 of these employees are already at the caps
currently specified by statute. Raising the caps will allow
those employees to get higher annual across-the-board pay
raises and locality-based comparability adjustments. CBO
assumes that each January--under both current law and under the
proposed legislation--base pay will increase by its projection
of the employment cost index minus one-half percent, the
average locality adjustment will raise base pay by an
additional one-half percent, and Executive level salaries (and
thus the caps) will rise by the full amount proscribed in the
Ethics Reform Act, which governs pay raises for Members of
Congress and Executive level employees. (Alternatively, if the
adjustment of caps under current law were only one-half of the
amount specified by the Ethics Reform Act to account for the
fact that the Congress votes to block those raises in some
years, pay compression under current law would worsen. In that
case, the cost of the legislation relative to current law would
be $16 million over the five-year period.)
H.R. 3737 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would impose no costs on state, local, or tribal governments.
The CBO staff contact for this estimate is Ellen Hays. This
estimate was approved by Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
CHAPTER 53 OF TITLE 5 UNITED STATES CODE
* * * * * * *
CHAPTER 53--PAY RATES AND SYSTEMS
* * * * * * *
SUBCHAPTER I--PAY COMPARABILITY SYSTEM
* * * * * * *
5304. Locality-based comparability payments
(a) Pay disparities shall be identified and reduced as
follows:
(1) * * *
* * * * * * *
(g)(1) * * *
[(2) The applicable maximum under this subsection shall be
level III of the Executive Schedule for
[(A) positions under subparagraphs (A)-(D) of
subsection (h)(1); and
[(B) any positions under subsection (h)(1)(D) which
the President may determine.]
(2) The applicable maximum under this subsection shall be--
(A) level II of the Executive Schedule for positions
under subparagraphs (A)-(D) of subsection (h)(1); and
(B) level III of the Executive Schedule for any
positions under subsection (h)(1)(E) which the
President may determine.
(h)(1) For the purpose of this subsection, the term
``position'' means--
(A) * * *
* * * * * * *
(C) a position to which section 5372a applies
(relating to contract appeals board members); [and]
(D) a position to which section 5372b applies
(relating to administrative appeals judges); and
[(D)] (E) a position within an Executive agency not
covered under the General Schedule or any of the
preceding subparagraphs, the rate of basic pay for
which is (or, but for this section, would be) no more
than the rate payable for level IV of the Executive
Schedule;
but does not include--
(i) * * *
* * * * * * *
(2)(A) * * *
(B) A request by an agency head or exercise of authority by
the President under subparagraph (A) shall cover--
(i) with respect to the positions under subparagraphs
[(A) through (C)] (A) through (D) of paragraph (1), all
positions described in the subparagraph or
subparagraphs involved (excluding any under clause (i),
(ii), (iii), (iv), (v), or [(vii)] (vi) of such
paragraph); and
(ii) with respect to the positions under paragraph
[(1)(D)] (1)(E), such positions as may be considered
appropriate (excluding any under clause (i), (ii),
(iii), (iv), (v), or (vi) of paragraph (1)).
* * * * * * *
SUBCHAPTER VII--MISCELLANEOUS PROVISIONS
* * * * * * *
Sec. 5372. Administrative law judges
(a) * * *
(b)(1)(A) * * *
* * * * * * *
(C) The rate of basic pay for AL-3, rate A, may not be less
than 65 percent of the rate of basic pay for level IV of the
Executive Schedule, and the rate of basic pay for AL-1 [may not
exceed the rate for level IV] may not exceed the rate for level
III of the Executive Schedule.
* * * * * * *
Sec. 5372a. Contract appeals board members
(a) * * *
[(b) Rates of basic pay for contract appeals board members
shall be as follows:
[(1) Chairman of an appeals board--the rate of basic
pay payable for level IV of the Executive Schedule.
[(2) Vice chairman of an appeals board--97 percent of
the rate under paragraph (1).
[(3) Other members of an appeals board--94 percent of
the rate under paragraph (1).]
(b)(1) Rates of basic pay under this section--
(A) shall consist of--
(i) the rate for the chairman of an appeals
board;
(ii) the rate for the vice chairman of an
appeals board; and
(iii) the rate for all other contract appeals
board members;
(B) shall be initially adjusted by the Office of
Personnel Management and thereafter adjusted under
paragraph (2); and
(C) shall not be greater than the rate of basic pay
for level III of the Executive Schedule nor less than
94 percent of the rate of basic pay for level IV of the
Executive Schedule.
(2) Subject to paragraph (1)(C), effective at the beginning
of the first applicable pay period commencing on or after the
first date of the month in which no adjustment takes effect
under section 5303 in the rates of basic pay under the General
Schedule, each rate of basic payment for contract appeals board
members shall be adjusted by an amount determined by the
President to be appropriate.
* * * * * * *
(d) The Office of Personnel Management shall prescribe
regulations necessary to administer this section.
* * * * * * *
Sec. 5376. Pay for certain senior-level positions
(a) * * *
(b)(1) Subject to such regulations as the Office of
Personnel Management prescribes, the head of the agency
concerned shall fix the rate of basic pay for any position
within such agency to which this section applies. A rate fixed
under this section shall be--
(A) * * *
(B) not greater than the rate of basic pay payable
for [level IV] level III of the Executive Schedule.
* * * * * * *
ADDITIONAL VIEWS
We support H.R. 3737 to raise the pay caps for
administrative law judges (ALJs), administrative appeals
judges, and other senior positions in the government.
These pay increases are necessary to recruit and retain
highly qualified individuals. The positions covered by this
bill are ones of significant responsibility and merit
competitive salaries. For instance, the 1,300 ALJs in the
federal government adjudicate cases involving complex
regulatory matters that affect large numbers of people or
involve millions--and sometimes billions--of dollars.
Although we support this legislation, we are concerned
about the pay disparities created by both this bill and
legislation enacted last year to raise salaries for other
federal employees. After enactment of this bill, a large number
of federal employees would be paid at Executive Schedule Level
II, which is currently $158,100. This is the same amount earned
by deputy secretaries of cabinet departments, agency
administrators, and federal district judges. In fact, under
this bill, ALJs would earn more than federal bankruptcy judges
and magistrates.
We believe it is important to maintain some pay
differential between the deputy secretary of a department and
the employees who work in the department. It is also important
to maintain some pay differential between federal district
judges and ALJs.
To address this problem, Representative Danny Davis offered
an amendment at the Subcommittee markup to require the Office
of Personnel Management (OPM) to study federal salaries and
determine whether further salary adjustments need to be made.
This amendment is codified in Section 6 of the bill. It is our
hope that Congress will carefully consider the findings of the
OPM study and address any pay disparities.
Henry A. Waxman.
Danny K. Davis.