Documentary history of Federal pay legislation, 1975

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Material Information

Title:
Documentary history of Federal pay legislation, 1975
Physical Description:
iv, 534 p. : 24 cm.
Language:
English
Creator:
United States -- Congress. -- Senate. -- Committee on Post Office and Civil Service
Publisher:
U.S. Govt. Print. Off.
Place of Publication:
Washington
Publication Date:

Subjects

Subjects / Keywords:
Civil service -- Salaries, etc -- United States   ( lcsh )
Officials and employees -- Salaries, etc -- United States   ( lcsh )
Genre:
federal government publication   ( marcgt )
non-fiction   ( marcgt )

Notes

General Note:
At head of title: 94th Congress, 2d session. Committee print.
General Note:
At head of title: 94th Congress, 2nd session. Committee print.
Statement of Responsibility:
prepared by the Committee on Post Office and Civil Service, United States Senate.

Record Information

Source Institution:
University of Florida
Rights Management:
All applicable rights reserved by the source institution and holding location.
Resource Identifier:
aleph - 021497467
oclc - 02271649
lccn - 76601553 //r89
Classification:
lcc - KF5375 .A25 1976
ddc - 342/.73/068
System ID:
AA00023991:00001

Table of Contents
    Front Cover
        Front Cover 1
        Front Cover 2
    Title Page
        Page i
        Page ii
    Table of Contents
        Page iii
        Page iv
    Foreword
        Page 1
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    Part I. Public Law 94-82: Executive, legislative, and judicial salaries
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    Part II. Executive order 11883: Federal pay comparability adjustment of October 1975
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    Part III. Major studies concerning Federal salaries released in 1975
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    Part IV. Federal pay laws through February 18, 1975--Chapter 53 of Title V
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    Back Cover
        Back Cover 1
        Back Cover 2
Full Text
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94th Congress P
2d Session COMMITTEE PRINT







DOCUMENTARY HISTORY OF FEDERAL PAY LEGISLATION 1975






PREPARED BY THE COMMITTEE ON

POST OFFICE AND CIVIL SERVICE

UNITED STATES SENATE












1975






Printed for the use of the
Committee on Post Office and Civil Service


U.S. GOVERNMENT PRINTING OFFICE
68-371 0 WASHINGTON : 1976


For sale by the Superintendent of Documents, U.S. Government Printing Office Washington, D.C. 20402 Price $4.90






































COMMITTEE ON POST OFFICE AND CIVIL SERVICE GALE W. McGEE, Wyoming, Chairman JENNINGS RANDOLPH, West Virginia HIRAM L. FONG, Hawaii
QUENTIN N. BURDICK, North Dakota TED STEVENS, Alaska
ERNEST F. HOLLINGS, South Carolina HENRY BELLMON, Oklahoma
FRANK E. MOSS, Utah PATRICK J. LEAHY, Vermont ROD CROWLIR, Staff Director

(U)














CONTENTS

Page
Forward --------------------------------------------------------- 1
PART I
PUBLIC LAW 94-82
EXECUTIVE, LEGISLATIVE, AND JUDICIAL SALARIES
*Letter to Chairman McGee from the Majority and Minority leaders of the Senate, Messrs. Mike Mansfield and Hugh Scott, dated June 11, 1975 a joint recommendation that legislation be presented to Congress to extend the cost-of-living percentage pay increase for high ranking Federal officials that are presently under a salary freeze (Document 1) -------- 5
*Letter (with and accompanying report) to Hon. Nelson A. Rockefeller,
President of the Senate, from President Gerald R. Ford, received July 26, 1975, expressing concern of the problem in recruitment and retention of senior level executives and judges in the Federal Government. Urges enactment of H.R. 2559 (Document 2) ---------------- 7
Attachment: Summary of Civil Service Commission survey entitled
"The Impact of the $36,000 Salary Limitation ---------------- 10
House Committee on Post Office and Civil Service Committee Print No.
94-3, entitled "Executive, Legislative, and Judicial Salaries," dated
July 11, 1975 (Document 3) -------------------------------------- 15
*Senate Report No. 94-3.33 to accompany H.R. 2559, see title IT as an amendment, July 25, 1975 (Document 4) -------------------------- 79
Senate floor debate excerpted from the "Congressional Record":
July 28, 1975 (Document 5) ------------------------------------ 113
July 29, 1975 (Document 6) ------------------------------------ 137
House floor debate excerpted from the "Congressional Record", dated July 30, 1975 (Document 7) -------------------------------------- 165
*Public Law 94-82, to amend title 30: United States Code, to apply to the
U.S. Postal Service certain provisions of law providing for Federal Agency safety programs and responsibilities, to provide for cost-ofliving adjustments of Federal executive salaries, and for other purposes. Approved August 9, 1975 (Document 8) -------------------------- 193
PARTII
EXECUTIVE ORDER 11883
FEDERAL PAY COMPARABILITY ADJUSTMENT OF
OCTOBER 1975
*Letter to Hon. Nelson A. Rockefeller, President of the Senate, from
President Gerald R. Ford, dated March 19, 1975 1 promising a temporary 5 13ercent ceiling on Federal pay raises (Document 9) -------- 201
Attachment-Temporary ceiling of 5 percent on Federal pay
increases and benefit programs tied by law to Consumer Price
Index ---------------------------------------------------- 204
Proposed legislation ------------------------------------------ 205
Explanation of proposed bill ---------------------------------- 209
News release-Bureau of Labor Statistics, July 9, 1975, entitled "WhiteCollar Salaries Rise 9 Percent" (Document 10) ---------------------- 211
Table: Average salaries of employees in selected white-collar occupations in private establishments, March 1975 ---------------- 216





Iv

CONTENTS-Continued
Joint annual report of the Director, Office of Management and Budget,
and the Chairman, U.S. Civil Service Commission, entitled "Comparability of the Federal Statutory Pay Systems with Private Enterprise Page Pay Rates" (Document 11) ---------------------------------------217
*House Document No. 94-233, message from the President of the United
States transmitting a Federal pay comparability alternative plan,
pursuant to 5 U.S.C. 5305(c)(1), Sept. 3, 1975 (Document 12)-295 S. Res. 239, Sen. Metcalf's resolution disapproving the President's alternative plan for pay adjustments for Federal employees (Document 13)-- 299
*Senate Report No. 94-371 to accompany S. Res. 239, entitled "Disapproval of the Federal Statutory Pay Reduction", September 16, 1975
(Document 14) --------------------------------------------------301
Senate floor debate excerpted from the "Congressional Record," dated
September 18, 1975 (Document 15) --------------------------------307
House floor debate excerpted from the "Congressional Record," dated
October 1, 1975 (Document 16) -----------------------------------351
*Executive Order 11883-Adjustments of Certain Rates of Pay and
Allowances (Tables Attached), October 6, 1975 (Document 17) ---------353
PART III
MAJOR STUDIES CONCERNING FEDERAL SALARIES RELEASED IN 1975
Report to the Congress by the Comptroller General of the United States, entitled "Need For A Comparability Policy For Both Pay And Benefits Of Federal Civilian Employees", July 1, 1975 (Document 18) ----------367 House Document No. 94-247, message from the President of the United
States transmitting the 1974 annual report of the Federal Prevailing Rate Advisory Committee, pursuant to 5 USC 5347(e), September 10,
1975 (Document 19) ---------------------------------------------415
Report to The President of the President's Panel on Federal Compensation
(Rockefeller Panel), December 1975 (Document 20) ------------------443
PART IV
FEDERAL PAY LAWS THROUGH FEBRUARY 18, 1975CHAPTER 53 OF TITLE V
Title 5, United States Code, Chapter 53-Pay Rates and Systems (Document 21) ---------------------------------------------------495
*Documents of particular significance in the development of Federal pay policy during 1975.












FOREWORD

Tihe. veai I 975 xva,, -i &r-iii tioantin ii i o. thi fiie way vithijse to policies governing eer l pa. twaaerof(itii nomnic uncertainties wich turned n th ttiion to the i ( a
impact. of Federal saaie n the, -ati,'nS bitdIget aid( it--UOI)BV It was a vear that markled progress lin addi( ssingmo the probl( aj of Fe deral. executive salaries, brought ab itt through, th( lose coop(rat ion of the WAhite H-ouse and the ( Much remains to be (lone, lin improviiM, the FeIvI pvsr ue
but there canl be little doubt that what, is to collie, will tlin Uponfltie accomplishments of 197T5.
Therefore. as a reference for the use of the Senate. C oilmiittee onl Post Office. and Civil Service, the Cingiess, and the gene, ral Aiw~rican public, I have requested the pr~epar'ationi of this Dlo, ra /tary H 'y of Fede, a! Pay Leg'slatiotn. 1fb75. It is the purpose. of' this p ibittjil to reconstruct. chronologically the, doeunients, debtes ad 1ere A-t pertinent to several broad categories of Federal ompens~i,-ation. Anld while an effort has been made to make this history as completed, as possible, the user will note that key documents have been indicated by asterisks. It is hope-d that. in so doing, this document, canl prove. both comprehensive and concise according to the, readler's needs.

'Senator (I'ALL AV. MNc Gf i,
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PART I

PUBLIC LAW 94-82

EXECUTIVE, LEGISLATIVE,
AND
JUDICIAL SALARIES



















IJOCI MENT 1
MIK MANSFIELD
MOItANA




@ffir of tae 46joritV Xteabr

XWiyntonal, P.E. Z65l0
June 11, f1975




Honorable Gale W. McGee
Chairman
Committee on Post Office and
Civil Service
United States Senate
Washington, D. C. 20510

Dear Mr. Chairman:

The almost daily reminders of the inflation brings to our attention
once again, the group of officials in the Federal Government who have had their salaries frozen, effective March 1, 1969, for a period of more than
six years. In very simple terms, this means that the pay of these positions has been cut 42.98% in terms of purchasing power since that is the amount of
pay increases that have been authorized for Goverznment employees since March 1, 1969. This is an average reduction of more than 7% each year.

The C:omptroller General of the United States in his report to Con-res3
dated February 25, 1975, relative to the subject of the critical need or a better system for adjusting salaries of higher Federal officials, incluti.4
judges and Members of Congress, stated that anyone at a salary of $36,C000 on March 1, 1969 had a purchasing power in December, 1974 of $27,600 and without
relief, this would drop to $24,200 by January, 1977.

Just recently, a local newspaper reported that the possibility of
another automatic pay adjustment as high as 10% for Government employees on October 1, 1975 is very likely. If t-is occurs, it would then mean a
total of at last 53 rise in sala77 increases covering eight separate adjustments in a period of six and one-half years. It would average out to
an increase of at least 8% per ,ear. This wo Ild create an even grcatr loss
to the small segm nt of officials of the Federal servce who are exclude
from the pay ad,, tme:ts.

It is also generallv r-c zed the :an; officials and e -pl, ees i
positions of hiCh responsibility are prematuely retiring because of the limitation on the salar- of their positions. We cannot overlook thr fact that a
principal reason for early departure fro: Governnent service, in all probability, is the salary freeze.

Alon with judges, higher executives of agencies, ome Members :f :e
Congress have also expressed tei.seles on m.is su.ectr Those i y
families and little or no income other than their salary~ ar x CVr ncing


(5)






6



Honorable Gale W. McGee 2 June 1-1, 1975


the same financial pinch. The obligations of a Member of Congress are in many respects, more demanding than anyone else in Government service. As for others, the President of the United States on his 1975 budget message containing recommendations for executive, legislative and Judicial salary adjustmEnts stated that a very serious and adverse effect has occurred in the areas of recruiting, retention, and incentive for advancement throughout the Federal service.

Therefore, it is our joint recommendation that this matter be dealt with in a straight-forward fashion and that legislation be presented to the Congress that would extend the same cost of living percentage increase for the positions listed on the attached schedule as is provided for employees of the Government generally.

In our judgment, the legislation should be handled with dispatch so
that the authorization for the heretofore excluded positions Vill be included in the next cost of living increase which is scheduled to go into effect
October 1, 1975.

This type of authorization would at least serve to keep pace with the inflationary spiral from now on. It is not our intention to recommend nor do we advocate any initial lump sum adjustment to "catch up" on the more than 40% which has already been denied. But, henceforth, the adjustment will at least afford this group equal treatment with all other employees of the Government.

We attach herewith proposed legislation to accomplish this recommendation and suggest that you and Senator Fong, the ranking Minority Member of your Committee, meet and discuss with Senator Ernest Hollings, Chairman, and Senator Richard Schweiker, ranking Minority Member of the Subcommittee on Legislative Appropriations of the Committee on Appropriations, the most expeditious and best possible legislative vehicle for early enactment.

For your information, we are also addressing a letter to Senator
Hollings with the same suggestion for a meeting and discussion of our recommendation with you and Senator Fong.

With best wishes, we are

Sincerely yours,




HUGH SCOTT^ PUBLICAN LEADER NIKE KkNSFIELD, MAJORIV LEADER

Enclosure

cc: Honorable Hiram L. Fong






7


DOCUMENT 2
THE WHITE HOUSE
WASHINGTON

6 JUL 1975


Dear Mr. President:

As you are aware from discussions we have had over the past few months, a serious problem has been developing in the recruitment and retention of senior-level executives and judges in the Federal Government.

This problem has now reached the critical stage. Essentially, it stems from the fact that there has been no pay raise for executive level managers or judges for six years. As a result:

-- Notwithstanding the clear intent of our Federal pay system that the varying levels of responsibility should be reflected in salaries we now have a situation where some 15,000 employees in top grades (Executive Level V.
GS-18, GS-17, GS-16 and even GS-15) all receive the same pay. The reason is that, as employees have received pay increases over the past six years, more and more of them
come up against the six-year-old statutory pay ceiling
of Executive Level V.

-- More than 20 percent of the Government's top officials are either quitting their jobs or retiring early.
From 1969 to the present, the rate of executive resignations and retirements has more than doubled. In fact, employees whose salaries are frozen are retiring early
at three times the rate of all Government employees,,
mostly in the 55-59 age range, depriving the Government
of five or ten years of additional service by these
experienced workers.

-- Several dozen of the Government's top posts are
unfilled at this time simply because many of the
executives we want to bring into Federal Service cannot,
in fairness to their families, accept the huge cut in
compensation that would be involved.

-- Key Government officials are turning down offers to
move into Federal positions of greater responsibility
in new localities. They cannot afford to uproot their families and bear the expense of moving at no increase
in salary. There are hundreds of instances of this
problem.









2

Since March, 1969, when pay for upper echelon Federal employees was last adjusted, the salaries of those not subject to the freeze have risen 50 percent. During this same period, a rise in the cost of living of 47.5 percent has reduced the purchasing po e. of those with frozen salaries by nearly one-third.

The same problem applies to h judicial and legislative branches. The Chief Justice advises me that as a result of such frozen compensation schedules, a number of Federal judges have left the bench to return to private law practice and many others are planning to do so.

While the salaries fixed in 1969 quite understandably seem more than adequate to many, we must face the fact that such salaries are today far out of line with comparable salaries in the private sector -- and indeed in a growing number of State and loc 1 governert -for skilled, epeienced ai~rnistr-tors, senior pofessi onals and judges. Actually, executive pay in the private sector an earnings of private attorneys have both increased by about 44 percent since 1969.

The Civil Service Commission has conducted an extensive survey and I am enclosing a summary of its report which contains specifics on this problem. I urge you to read it.

As you know, the Senate Civil Service Committee has reported
out H.R. 2559 to extend to employees of the Executive, Judicial and Legislative branhe wose pay has been frozen so long, increases commensurate with those granted to other employees whose salaries are not frozen.

This statutory change will not result in any "catch-up" for the last six years and will not solve all of the inequities we now have. But I feel we must move at once in this direction. I consider H.R. 2559 as a vital first step. Further action to solve the problem will be addressed by the Panel on Federal Compensation which I established recently and by the next Quadrennial Commission on Execiative, Legislative and Judicial salaries.









3

The added cost of the compensation adjustments of IIoR. 25 will come to a fraction of one percent of the Federal payroll. In my judgment, this action is essential if we are to recruit and retain qualified and competent senior-level people to conduct our Government's business. I, therefore, urge the Congress to enact this bill promptly.

Sincerely,







The Honorable Nelson A. Rockefeller President of the Senate Washington, D.C. 20510






10


July 16, 1975

THE IMPACT OF THE $36,000 SALARY LIMITATION


The Civil Service Commission has been gathering data from agencies on the effect the $36,000 limitation on pay is having on the executive branch's efforts to recruit and retain a highquality managerial and professional workforce.


The data reveals that almost all agencies are faced with similar problems. Hundreds of the Federal Government's most valuable officials are quitting their jobs or retiring early because of the $36,000 salary limitation. The result is that many key positions are being left vacant and important serilrices performed by the Government are beginning to suffer. The growing size of the problem is shown by these official figures: The rate of resignations among professional employees has doubled since 1970. Retirements increased by 50 percent in the single year from 1973 to 1974. Early retirements of executives are plaguing many Government agencies. The Internal Revenue Service reports, for example, the average age of its retirees has gone from 62.4 years in 1969 to 56 years currently.


Many critical and important jobs are going unfilled for months. For example: The position of chief actuary of the entire Social Security system has been vacant for 15 months. The GS-18 position of Director of the National Institute on Aging at the National Institutes of Health has been vacant since it was established in May 1974. The positions of Program Director for Chemotherapy and Program Director for Cancer Centers in the National Cancer Institute ha- re been vacant for months. Only three out of 15 vacant positions (due to early retirement) of administrative









2



law judges have been filled at the National Labor Relations Board. The list goes on and on. In all cases it is clear that the $36,000 salary limitation is a major reason why positions requiring outstanding qualifications and capabilities, in addition to the assumption of awsome responsibilitiesare so difficult to fill.


Another aspect of the problem involved the refusal of key

employees to move into positions of greater responsibility. Aside from the assuming of greater responsibilities at no increase in salary, it also generally involved moving to a different part of the country, uprooting of family and in addition bearing the expense that moves generally entail. Even the most dedicated employees must consider this very carefully. For example: The Project Manager for the Apollo Soyuz Test Project refused the Directorship of the Kennedy Space Center, indicating that he could not afford to absorb the cost of moving his family to Florida. At the National Weather Service, a GS-16 employee declined a promotion to the GS-17 position of Associate Director for Systems Development. At the Department of Transportation a GS-17 Regional Director refused reassignment to the position of Associate Administrator for Airports since it would involve rr-)vini: t-o Tashinqton, bearing tbh ,,t or- the move and the disadvantage of living in a high-cost area without any additional compensation. Once again, the examples cited are just a very small fraction of an ever-g-owing list.






12



3

Perhaps the greatbest impact of the $36,000 limitation is

felt when attempting to attract outstandipg candidates from the private sector to fill top level vacancies. This is especially true in the legal, medical and scientific areas. Applicants who are curious enough to apply, or who are solicited because they are c(-:ren tly in similar positions in the private sector, are quickly turned off by the $36,000 salary or with the prospect that it represents the end of the road as far as salary is concerned. i.n most cases, these people are already -making far more money in their current jobs.


The general higher level of compensation in the private sector

-For positions similar in nature and scope of the executive levels n government not only serves as a barrier for halting the flow of executive level types from industry into the government, but at -the same time serves as a gateway for government executives to Leave government employment for the greener pastures of pivate enterprise. At the Commerce Department, the Chief Economi~st of the Bureau of Economic Analysis, GS-16, resigned to take a higher-paying position in private enterprise. At the Ut_-onal Cancer Institute, the Clinical Director resigned to accpta higher-paying position at a University. At the Justice Department, a Supervisory Trial Attorney at the GS-1-6 level re-stqned to accept a. position in private industry at a substantially increased salary. At tie Depart--.nt of Agric'ulture, the GS-17 Director of Automated Data Systems resigned to take a $70,000 position in private industry.






13



4

At the same time, at HEW, a candidate rejected the GS-18

position of Director of the Office of Child Development because she was currently making $50,000 in private industry. 'At the Department of Interior, a candidate declined the position of Deputy Assistant Secretary for Energy and Minerals to accept a position with a consulting firm paying over $50,000. At the Commerce Department, a candidate declined appointment to a GS-16 Associate General Counsel position to accept a position paying $50,000. At the Small Business Administration, a candidate declined the position of Associate Administrator for Finance and Investment because it would involve a loss of $14,000 of his current salary in the private sector.


The Civil Service Cornrnission itself has been hit by atre retirements among its top staff. Many of these key pers retire

within months after becoming eligible for retirement. For x An Executive Director at age 55, A Deputy Executive Director at age 57, A General Counsel, age 55, An Assistant Executive Director, age 55, A Regional Director, 55, Two Bureau Directors, 55 and 56, and two Deputy Bureau Directors at 55. These executives had valuable experience and skills and the ability to render additional valuable service for perhaps five or ten more years. Many of them, in fact, are still working full-time outside of the Federal service.


it is apparent -hat if tne si tu tio remain static, t atn S, if the $36,000 limitation remains and at the same time the level of compensation in the private sector remains free to adjust in an open rmar.ket, we are sure to see the problems of attracting and retaining quality executives become even more pronounced.













-3 0 76 2








DOCUMENT 3

94th Congress COMMITTEE PRINT COMMITTEE
1st Session PRINT No. 194-3








EXECUTIVE, LEGISLATIVE, AND JUDICIAL SALARIES





COMMITTEE ON

POST OFFICE AND CIVIL SERVICE

HOUSE OF REPRESENTATIVES














JULY 111 1975








Printed for the use of the Committee on Post Office and Civil Service


U.S. GOVERNMENT PRINTING OFFICE 55-356 0 WASHINGTON : 1975

















COMMITTEE WN I-k i T i ii, FICL A \D CIVIL Vfct,,

DAVID -N. 111-1'--\-Dhb, i(). ,, North ("arolina. Chail-i)ialu )TORRIS 1! UDALL, Arizona, Vice Chairtaan Ier"(.y iAiNN-ARD J. Illinois
1. t "T -_N ALBEIT W. J I INSON, 11(,YtTI \ Ivania
JAM11,,- HAN1,11i ,(,rk JOHN 11. R01".SSELOT, Califkriiia
CHAF I !-I-, I!-. C:difornia ANDU-1-:W J. HINSHAW, Califwnia
t JCHAE: C. WHITC Texas IA-MES M. COLLINS, Texas
ti,;AAM D CORD, Afichil-an GENE TAYLOR, Mi"Souri
if I-AAM 'LAY, Ntis.souri BEN-JAMIN A, GILMAN, N(-w York
I CI A S( Colorado ROBIN L BEARD, Tolillel-see
M 1.!'I', 1,1.\.\, Florida TRENT LOTT, -Mississippi
T tj 11 (1
A], North arolina
Vir-gild:i
A. ],16 t)HEAD, Mii,:'iLtn

-N Y. NIENLTA 'Californi't
J 0 JENRETTE, Jit., South Carolina
J, SOLAIM Ne \
JOIiN H. AIARTINY, Chi(j C010180 j m I 1 Im, t aff 1) i ( 10 1' fl I (I Co u n s c t
C. i (t t t a -cctor

S t a ff As, i t a, 11 t












FOREAVORD


-,:Vt the. be III-till of the ,. ellate Post Office and ( 'iA-11 Service Committee. "Illd CoIII 0
(T11OSSTIIall David N. flelidersoll, cI I al I'll lan 04 the House Post Otfi( I t I III CO'Iftild ('161 Service Collmlittee, &I-ected Iwh. staffs to (le\-elop, operation Nvith representatives of the executive and imlicial braiwhe ,, of the Goverjimeiit. (,I lecrislative proposal whicli. as a 1-i'milli-illul, Nvoldd (rive some nleasiue of rellefto the pay compression of ovei- approximfilely 1,5.000 FedOral employees ca,11sed I)y the blck of adJ11stilwilt III th'' ""XJ)(W
pa N cellliig since Mal'ch 190 a,
(2) t-O the Avidenmo* pay (rap arisilw since Alar("h 196'. 111 pay
for top positions mider the Statutory alarv S-N-Stellis "Illd III the top ]OvOIS Of tile- CXO(,Ijtlve, JO(rislativc, and 'Judicial 1-Iralwiles.
whicl) has beeii frozeii. since Alarch 1969. due to (.a) the
iti the cost of IiN-m(r occurrino- since, 1969. atid (1)) th(, pay ad-j1j-:fl1wilts IvIllch have occurred since. Afarch 1969, 111 the pi jva-te seotfT%
tate and local (roverTimeiits, (mid nonprofit or(rallizatIMIS.
I'll(, draft of tI)c imposed le(yislz tioil in tills comjmtte(
prmt as attachmei-it T. The draft was developed as a joint effort by tile staffs; of the Senate ajid House Committees oil P(-, st Office Cand jA-11 Service, "Ifter extellsive consultatimis xvitli representatives of the executive ai-id Judicial branches.
This committee prMt flko McIlldes the b"Isic backo-rollild 111formatioll oil the critical ileed for le(rislative action to maintain reasonable and equitable. pai IeN-els for officials rummicr ti-le Federal Govermilent. The several paris Of the comillittee prlilt III(All(le tile followiligr InforIllationPart I.-Summat-y of tile ]e(rislatlN-e draft. relat,
to the dete ri orat ion of the pill asin,(r power of the 1909 1)ay rates.
idelltificatimi of the various pftv studies, aild the fie-m-Mas field 1w
the al')p1*01)IT. 1te Hol'u-'O committees oil t1jis iliatter.
Part -2.-Iiiformatloii with respect to the history of tile, top
salary adjustmems aiid a (lescriptimi of the ("'Xistilw proVISIMAS Of )aAA- I elatim to tile CollilI)issioll (-),, Ex(,(-jItiN-(,,
and 'llidwial -;alaries alld the pa\- (-OlIIpa1'(.!1411It A- 1)1.()( (,(hlre
I 01- t1w statutory pay s Ystems-Geiwn',j ScIledilic, T ,Ole7l'll
Ice. am] ists. and N u of Ole
istratioll. Tlw, 1-)alf also shows tile 1 III(r 1"(Ites of pay of the top level pOsItiolls. tjjO aII-jojjjjt of flie comparabilitY i'iwrettses
and tile cost-of-livii-icy aTI11111tV inci eases.
There also I's included. in attachment T1, a copy of tll(, General .NcCountincr office re t dated February 2,5 197.), eiititle(j, "(11,-t-c, I
(TIT)
(171)






18


IV

Need for a Better System for Adjusting Top Executive, Legislative, and Judicial Salaries." This report includes the basic information on the effects of the continuing widening pay gap, the salary compressions, the effect of inflation on the 1969 rates of pay, and the salary trends in non-Federal executive pay since 1969.











PART I


SUMMARY OF DRAFT LEGISLATION
The purpose of the draft legislation is to establish a new pay: fixing procedure for the rates of pay of the top officials of the Federal Government (Members of Congress, judges, and top officials under the Executive Salary Schedule or officials with rates of pay comparable to the rates under the Executive Salary Schedule) which will stop the widening of the pay gap and provide a cost-of -living type of relief in the pay ceiling for employees in the statutory pay systems.
It will not provide any, measure of relief for the pay gap that has arisen since March 1969. It is anticipated that some measure of relief would be considered for the pay gap by the Commission on Executive. Legislative, and Judicial Salaries, which will next serve for the fiscal year 1977. This legislation does not change in any way the provisions of law relating to the Commission (2 U.S.C. 35 A-361).
The major policies of the legislation are identified below:
(1) Pay adjusting procedure.
(a) Section 2 of the draft proposes a new method for annual
adjustment of rates of pay for each level of the Executive Schedule. The adjustment would become effective whenever a comparability adjustment is made under 5 U.S.C. 53005 in the statutory salary systems (ordinarily in October of each year). The amount of the adjustment would equal the percentage of the comparability
adjustment, rounded to the nearest $100.
(b) Section 3 relates to the salary of the Vice President and
provides a method for the automatic adjustment of the rate of pay of the Vice President under a formula that is identical to the
formula prescribed for the Executive Salafv Schedule.
(c) Sections 4 and 5 cover the rates o pay for Members of
Congress, judges, and officials Of the legislative branch. which would be adjusted automatically at the same time and under the same formula used in connection with the Executive Salary
Schedule.
(d) The pay gap which has arisen since the last adjustment
of pay rates in 196.9 will not be corrected by this legislation, but it is anticipated that this matter will be reviewed by the next Quadrennial Commission on Executive, Legislative, and Judicial
Salaries during fiscal year 1977.
THE PAY GAP
The salaries of the top officials have remained stagnant since March 1969.
-but the cost of living had increased approximately 46 percent
by March 1975, cutting the purchasing power of a $42,500 rate
by one-third;

(19)







20



li If \\ 'III I I I o nl Led era I e( (e hv utiVt a I a I]n Is have 1 nl(" Teased over
4()IftI W i J:1,
liiiiw.~ lie~ vai tf>laries of other Federal citiployees have
I lwI ei 5u 1( 'tbll t .50 p~ercent.
The I 1 sset tfori hi below show the IIW re:ISes in a -42,500) rate that \vouI 1111 vIIvelralized simple Mlarchi 1969. la(1 ucli rate beeii increased
t) Onl th of ba_ d omnpa rabil it v increases o)rant&c ill tile statultory
~ >~cn >. in< er S S(~ 3 550.and (2)) oil the basis of the a in lullt; of the annu1 alI (-ost-of-liviflV increases. A third table shows the ete1 of Ole ()t-of-living( increases ini the annuity of a top official who r et ireI after la vil"C n~serxed for 3 vears at the. $,42.,500 rate. with an 1 11111hit \ (colltedl ol the basic> of service entitiln h1i to 80 percent of lii 81 rv reduc ed hY~ an amount to p rovide a suirA vor annuity.

I. n,CL-ASED SINCE MAR. 1, 1969, BY A PERCENTAGE EQUAL TO THE AVERAGE GS COMPARABILITY PAY INCREASE TO OCT. 1, 1975

[1969 rate of $42,5001

Date Percent Amount
Mar --- ----- ------------$450
Juji, 1, -- -1- -- - - -- - - -- - - 9.1 46,367
D271 --- ----------------------------------- '6.0 49,149
- - - 1 - - - - I - - - - - I - --- 6 .0 5 2 ,0 9 8
Jan 1, 1972 -- - - - - - - - - - - - - - - -5.5 54,964
Jan. 1, 1973 - - - - - - - --- 5.1 57,767
Oct.1, 1973 --- -- - -- - -- - - -- - - - --- 4.8 60,539
O ct. 1, 1974 -- -- -- -- - - - - -- - - - - --- 5.5 63,869

WI-INCREASED BY THE COST-OF-LIVING INCREASES IN THE CONSUMER PRICE INDEX EACH JANUARY SINCE MAR. 1, 1969

Date Percent Amount

M a rLIC I - - - - - - - -- - - - - - - - - - --- $42 ,500
Janua, 1970 4.90 44,582
January1971 --- -- -- - - - -- - - -- - -- -- 5.20 46,900
an a y 1972_ _ _ -- - - - - - - - - - 3.35 48,472
Jarp r 1973 _- -- -- - --- - - 3.65 50,241
jalar 1974 --- -- --- - - - -- - - - --- - - - 9.40 54,964
1a~ ~ ,9 5 -- - - -- - -- -- -- - - - -- - ---- -- 11.70 61,394


Ak N NI1A- A I uI tA-. '1'Lu0N _N $ 12 '5

A Mt~1~l ev ho retired on Mlarch 1. 17.with .32 vears' credit-able >-c1\ Itk ;14 an Ie I Ilted ai sinrvivor annuiA would( have been entitled to altl 11f per ( :~.-~ a lni Ibase( o n a i2'hd-3 averagev salary
of -4:.,-) 1) .
Ret irlilefl c-ost-o t-liv illg i 1l(1,reasCs(Z sin1e Mla rel 1969. would have resulted inl the followino... adjustments inthe Mteniber~s annuity:


Date Percent Amoun

M a-ch 1972 -- - - - - - - - --- $30,870
--------- 4.8 32,352
Ju 1U 73 -- - - - - - - - --6. 1 34,325
January 1974 - - - -- - - - ---- -- -- -- -- -- 5.5 36,213
ul 1 97 14 - - - - - -- -- - -- - - -- 6.3 38,494
J an 01!; 1975 --- --- --- -- 7.3 41,305
-uus 975 - - --- - --5.1 43,411


2




21


TIHE G;RIWVING C( )IPIIESSI(O)N PR()BLEMi
[The material in this section is taken 'from tie General Aecotlin (
(O)flice report incllude(d in attachilnelit II.
The pay of a significant growing 1nl)ber ()f career employees IS being frozen at 3,6,000)() a year. III general, 1pay rates o)f the other r Federal pay systems are (1) governed by the legislated priInciple of comparability with pay inii the private sector, and (2) reviewed and adjusted annually by administrative action. Various lawxvs provide however, that Federal pay rates not exceed tlhe rate for Executive Level V-$36,000)() a year.
The pay rates for (GiS-18, the top1) step) of (GS -17, and equivalent positions in other pay systems reached thle ceiling in January 1971. With each annual salary increase based( on comparability within priv' ate sector pay, the ceiling's effect has progressively penetrated into lower grades and, as of October 1974. 14.70()0 employees' pay was limited to the $36,000 ceiling.
For example, the sharp increase in the percent of GS supergrade employees (GS-16, GS-17. and (+GS-18) paid less than the comnparability rate follows.
Percentage of supergrade
employees limited
Date of GS increases: to $16,.oo0
Jan. 1, 1971 ------------------------------------------------18
Jan. 1, 1972 ------------------------------------------------------ 33
Jan. 1, 1973 ------------------------------------------------64
Oct. 1, 1973 5-------------------------------------------------Oct. 1, 1974 ------------------------------------------------92
As of October 1974. there were 4.269 employees in grades GS-1(6, GS-1 7, and G(S-18 and 4,464 employees in the top three steps of GS-15 who should be paid more than the ceiling. The following table shows the GS-15 to GS-18 salary rates, as determined by the comparability process, and the asterisks show the rates limited to the $3.000 ceiling.
Steps GS-15 GS-16 GS-17 GS-18
1 ...---------------------------------------- $29,818 $34,607 $40,062* $46, 336*
2... ----------------------------------------- 30,812 35,761 41,397*
3 ----------------------------------------- 31,806 36,915* 42,732*
4 ..----------------------------------------- 32,800 38,069* 44,067*
5 ...----------------------------------------- 33,794 39,223* 45, 402*
6 ----------------------------------------- 34,788 40, 377*
7 --...--- ------------------------------------ 35,782 41,531*
8.. ----------------------------------------- 36, 776* 42,685*
9 ----- ------------------------------------ 37,770* 43,839*
10 ...---------------------------------------- 38, 764*

The penetration into the lower grrades will continue and may accelerate. The October 1974 pay increase for Federal white-collar employees was 5.52 percent and was based on March 1974 private sector pay data. Private pay has significantly increased since wage and price controls ended on April 30, 1974., which may be reflected in October 1975 Federal comparability pay increases. The salary rate for employees in the top step of (,S-14 (,,3.258) is only 8.25 percent from the ceiling.
Salary compression seriously weakens two statutory pay principles of internal equity-equal pay for equal work and maintaining pay distinctions in keeping with work and performance distinctions. All
3





22


0111plo N-(,(,s *I ii ()-r(-ldes (tS-18 taild (-)'rS-17. 8.9 percent of those ill GS-16'
-I I I d 19 1)ercellt Of those 'I I Gs-l'.) now re(-'eixe iiiiiia I salaries of $36,000. 'I'llo st-atiltol-Y pa y prijiciples (IR-tate that those paid the sarrie should lulve e(Itial 1.(,Sl)oi isibi lit les. but obx-loiisly tbey do not. Tn fact, many lei-els of supoi-N-Isloii in a, tyl)Mal jilajoi: dix-ision or bureau earn the S111110 scdttry It coilditioil. witch vould be considered unacceptable in tll(' private sector. A Jill)(, 1974 stlIdv bv the ivil Service C I oininission
sbowe(I that the mtergrade, differejitials between private sector equivalews to GS-1.5 to WSAS were as follows:
Percentage
differentia I
5 ,ond GIS-16 ------------------------------------------------ 24.6
GS-16 and G,8-17 ------------------------------------------------ 26.3
G ',-',-17 and (YS-18 ------------------------------------------------- 27.5
rl, I I (" i-l-lost obvioiis adverse impact of coi-lipression is that Federal emplolyees, zire cleiiied coiiiparability salary increases to which they would
)4
llicrwi (, be eialtled. Eiiiploiees whose salary notes are below the ('01 1 ('111 ave]: 111c]"(11.ir-le of ,iboilt 23 percent since
j-e,,l(,fie(j the ce*1*11(r Jamiary 19)'-1.
The (1111'eteiice betweeii the p:i.y of semor einployees and the pay of lower le -el eillployees iiarrowed sharply dilriiig the past several A'0 Zl. I *s. Ill D(,(-eiiiher 1969. wheii Federal salaries iN'ere unaffected bv the presew celluil-()% the differeiitilil between the pay of all employee in the
llr4 step of G -I.--) '(111d tll(, ])" iy of 'I GS-18 employee was 1,50 percent.
()I- After the Octoher 1974 P-a.V increase. the differential had
ii( lrrowe(l to 9.5 perceiit, or '.-4 1..537.
Colitil-illatioll Of tills 11,11111owilicr Avill ilot 0111y ftirther distort pay (11,41ii(--tiol-is in keepin(r with work distiiiction.;4. biit it -will reduce ittorale vltfilii the work force ,m(l fi,ive a iiegative impact upon the ca-)loyee's eiiteriii(r the career service. I ('el. illoeliti ves of elill
PAY S 17-DTES
The report of the Coiiiiiiisslorl oil E-,xeciifive, Lecrislative. and Judicl.ll (1:1te(l Jime i(Wm, which is the most receipt report of the,
(pi.Aremilal eoimllis -ion re(pured I)y the ciirreiit provisions of law, il-101tide,-, siibstai-ltial back(rroiiiid iiiforiiiatloii oil the. (M-lomit of salary
-,It(, ,md the 111creases Ill the cost of livin(T
'"'CIM11*1111y. I'lle Coll-lillissioll recoillimtided a 2)-percent salary increase to restore Hie piirchasin(y 1)ower of the top officials, and also recom1,11011do(l (ill 1111proveiiieiit in the pay adjustment, process by requiring '1' hieiii-lizil :idiiistmei-lt rather thaii i quiidreimial a -justment.
The iiee(l for e,irly lecrislatioii to iii-lprove the p,ty adjustment process Is best set forth iii a recelit report. of the Coniptroller General, (Lited Fe1)riir,-lY 2;- 197';), which is set forth in appendix 11 of the eollit'llittee prilit.
iioflter stii(-Iv reltitiii(x to judicial salaries, which was prepared for Ille Coiifereiwe. Coiiiii-littee oil Judicial Compensation, reads
in part as follows:
YNCTS 11FLATIVE TO PRESENT '-,TATT'S OF JUDICIAL S LADIESS UNDER TNUE AN-D FEDERAL SALARY ACT OF 1967 TUF POSTAL REY
S, i I s of the Vnited States federal
iriess of Justices and jiidye,
collrt'- h'-1ve beell frozell siiice ALircli 1969. at ',,,40.000 forjudges
4




23


of the district courts, $42,500) for jI(lges of the courts of al )peals and $60,00() for Associate Juistices of thle Supremne ('C rt.
Tile Consumer Price Index has increased 42 ) percent from March 1969 through September 19714, and is projected to increase to 48 percent by Mlarch 197 ). The freeze onil judicial salaries, coupled with the escalating inflationary spiral (('onsumer Price Index), has reduced judicial plurchasillg power by 32 percent.
It must be recognized that judges have lost purchasing power each year since March 1969. This has resulted in a cumulative loss of '$53,480 for district ijudiges and #,56.0 for circuit judges. Even if the 1969 purchasing power of judicial salaries is restored, these losses will never be recovered.
In contrast, General Schedule federal enplovees lave received 38.1 percent comparability pay increases lingoo this same period of time. The inequitable and discriminatory result of freezing judicial salaries for five years, while annuallv raising the salaries of General Schedule employees, is further accentuated by the fact that in addition, these federal employees have also received step increases, mandated under the grade system. that have been calculated at 14.2 percent when considered with the comparability increases on these step increases. Thus, the aggregate pay increase since 1969 for an average federal employee is calculated to be 52.3 percent, excluding improvements in fringe benefits. If federal judges had received the same increases, the current salaries would be district judges--$60.920; court of appeals judges $64,728; and, Associate Justices of the Supreme Court$91,380.
Fuirthermore, the salaries set for jti(dgles, conoressnie n and executive appointees in 1969 were lower than recommended by the Salary Conission. Yet it can )e argued the Salary Commission's carefidlyv considered proposal represented an equitable pay relationship between judicial, legislative andl executive salaries and positions classified under the (General Schedule. If this relationship) presently prevaile(ld, the salaries of Justices would have to be fixed at $98.995. those of circuit judges at $76,150. and district judges at ,43. It should be noted that these increased salaries would merely restore the level of purchasing power experienced in 1969.
While federal judicial salaries have remained unchalaoed( since Marchl 1969, salaries of state chief jdlo(,es have increased 44.2 percent. I Until re-ently, federal judicial salaries have been higlher than to1) salaries in almost all state systems: however. this pattern is chanin. Whereas in 1960 there was only one state (New York) in which j iuges were paid illore than a United States district judge, there are now twenty states cminpensating judges at rates equal to or in excess of the pay of federal district court judges.
Attorney's salaies, as surveyed lv the United States IDepartment of Labor. have risen 43.9 percent sin(, 1969, while salaries of federal judges have not risen at all.
5





24


Thus, fe(tel'tal ll(ax-e been 1111justly tivated ill comparison with Genenal Schedule federal employees. They also lla -e not beell pel llljtted to keep plack, with thell.. bi-ethivil oil the
belich ill state 'Stellls ol. with pl-l\-ate pi-actitiollers.
While judicitil stdarles ha ,-e been fi-ozen, top officials ill
the, pl-wate sectoi- t4 our economy hax-e recelx-ed salary illcieases a ,ei-a(rlllo- )19.8 pel celjt.
Such (fispai-itles ha\-e (6\-en 1111petils to tile 1 *Se ill I-eSi(rnations of fedei al judges aiid to iv(luced moi-Ile witlilli the Fedet-al Jwllclary. -\-it unprecedented seven federal district judges h;i\-e ivsitriwd since 'Nox-ember 19701. If a si (ril I*F.(,.( ailt salary Ill(Illease is not made, many othei- judges now ill their 1willie, who (1('Slle to continue lit the Judiciary. may also feel folved to IvOll-11 to prix ate pi-actice, at a serious i'Oss to the
i-anks ef the Fedet-al JudicDAVV.
Allothel. rele\-aiit cmisidei-ation is the increased officlew-V
all(I pi-oductl0ty of the Judlciai-y. The a\-ei-age ox-ei-all in(Tet-ISO In (-,tse termillati(-)IIS pei- hidcreship is 2(._)..5 percent for the period 19(18-1974. The mean processflig time for (-.161 c a ses" ll('IS (11-opped 10 pel-cent in the federal district coils and 12.1 pei-ceiit lit the ('0111-ts of appeals. 'nese Illipf'ON-ements OCCII ITC(l. dumig -,I pei-iod wheii flllii,()- increased 36 peivent and what beeii classified as difficultlt cases 4- increa ;ed
300.,, pelvelit. Thus. it is appai-ent that ill 1974 feden-il judges 11,110 dm110' 11101V W(Alk Ctild doill(r it 111mv effi(:,1entlv tht-111 thev did lit 196S. Aloivox-et% ex-en with theii- (),t-eatei woi-ldoad, it is (,\-Id(,iit that fedei-al judo-es aiv perfoimllw -,it a level of
(puility (,is hio-li oi- lil(rher thaii ex-er.
-)it(, should take note of the fact th,.it h,()Jslat 1N-e and xec itl\-(, salaries, I I k e pidicial sahii ies. lia\-e not l1lClVas(11d since, _Nfai (It 1969. The same losses lit pun-hasill" powel. thl-ollo-11 iifflation apply to them. Ili a(ldifloii. because top le\-el cXeciltlx-(, salaries ha\-e net Mcivased slice 196!_ wheivas Genet-al Schedule salal-les lia\-e, theiv is a ceillii,,r (--ompression at, the uppet- eiid of the salai-y scale. Ox-ei- 15 J, )00 fedei-al executives hax-e salai les below those to which the Genei-al Schedule
NVOIlld normally entitle them.
Economic COJISidenttions, fitness mid concern foi- th( quality of the '11,1(liclatY Nvzlinaiit -,I federal judlclzli y salary inCl'(, IS Cl of not less than 50 pei-(-eiit. Similai- arguments apply to Collo-l.(- s and E.XecutlN-e '.1pponitees. The ma(mitude of the I-ecent Illcileases lit the c(_msumer price index ujidei scores the need to .1djust cxec1lti\-e. lecrislatix-e and judicial sal"ll-ICIS Oil
Immal basis to pi Itide the i-mdue ei loll of theli 111COlne.
knothei- study eiintled. "Repoi-t of Speolal Stim-eY of LeN-el of Q11"Ilit of Patiolit Can, it Vet, I-alls' A (11111 nist iat loll Hospitals and ('11111CS,- V(,]-(ttiiiO- t'() the pay of pli N-SICI alls dentists, and mit-ses In vethospit'lls. lllcfit& S the followill" ITC0111111endat loll
6





25


REC()IMMENDED) PRIORITIES F(OR A("PI ON

Legi.4atire pIropos(ls
1. In the opinion of the Task Force. the top priority to be
considered is reinmunerat ion for pi)hysicians.
We recommend that legislative action be sought in the current session of the ( ongress to obtain incentive pay for physicllans, dentists. and nurses. Suchl actions are critically i)mportant because the pay raise anticipated inll October. 1974. will have no benefit for 1.SSO p)hvsicians and dentists and an additional 835 will not. be able to realize the full percentage increase of the raise due to the $36.000 per annual salary restriction. If improved remuneration is not forthcomin,! in the next few months, we are convinced that the VA's ability to recruit well-qualied physicians will be seriously impaired and there will be an acceleration of resignations and conversions to part-tine eml)loymeilt f)or economic reasons. The Task Force recommendation for legislation for retirement credit to be grante(l for undergraduate education prior to entering Federal service is not aceel)ted as immediately important for recruitment. IHowever. it. plus special provision for sabbatical leave will be influential in retention, and therefore
will be considered for future action.

HEARINGS

The House Post Office and Civil Service Committee discussed the problems relating to thle pay of top officials during hearings oil February 26 and 27 197, with the ( hairinan of the Civil Service Commission (Committee Hlearing No. 94-1,5. see particularly pages 15 and 16). and with the (Comptroller G(eneral on March 20, 1975 ( (omm ittee Hearing No. 94-12. see particularly pages 4 and 43).
Matters relating to the payv for judges currently are being considered durilly tlea1*ri eoe h ,b-olllj
sidered uring hearings before the Subcommittee on Courts, Civil Liberties, and the Administration of Justice. of thle House Judiciry Committee.
In addition, hearings have been held by the Sul)eomnmittee on IHospitals of the House Commnittee on Veterans Affairs relating to the pay of physicians. dentists. and nurses at Veterans' Administ ration hospitals.
NUMBER O(F EMPLOYEES
Executive schedule:
Level I ----------------------------------------------------12
Level II 3-------------------------------------------------------5
Level III -----------------------------------------------------102
Level IV 347
Level V ------------------------------------------------------271
Total -------------------------------------------------------785
Legislative (Members and top officials) ----------------------------560

7










NUMBER (1F EMPIA)YEES--COntued
Ju1dici:
('lief Justice of the United States 1
Associat e Justices, Supreme Court 10
Jid-es, 'ircuit ( 'Ourt of Appeals --- 144
J Idges court t of ('laims 10
.J IIdges, 'onurt of Military Appeals 3
J ils( (n urt of (C'stoms and Patent Xppeals Juidges. District Courts------ --- -- --- ---------------------------- 502
J udges, customs s C'ourt - ----------------------------------------- -12
JuIdI(s. Tax Court of the I united States ---------------------------- 22
Adlini lstra tive Assistance to ('hief Justice 1------------------------- I
Director. Federal Judicial ('enter -_-------------------------------- 1
director. Administrative Oftice of the U.S. Courts --_------------------ 1
1)eputy 1)irector, Administrative Office of the U.S. Courts---------- 1
Con)ilissiolers. ('urt of Clains- ----------------------------------- 16
Referees in Balnupty (full-tille maxi In 1------------------- 190
Referees in Bankruptcy ipl t-time IiaxiIfnuIfl ) --------------------- 30
.S. Magistrates --------------------------------------------------133

Total --------------------------------------------------------1, 083
Affected by $30,000 ceiling:
Execute ive branch:
General Schedule --------------------------------------------8, 750
Veterans Schedule ------------------------------------------2, 000
Foreign Service Schedul -------- ----------------------------1300
Others ----------------------------------------------------- 2,100
Judicial branch -------------------------------------------------350
Le-islative branch -----------------------------------------------100

Total -------------------------------------------------------- 14, 600
Iii addition to the above. there are (600 officers in the armed services A flOSe pay is limited bv the it.Oo) ceiling.

COSTS

It & e~st Iiued that the O)tober 1975 comiiparabilitv increase will be aply)xiiatel percent. The cost of an 8-percent increase is estimated to e( tas; follows:
In millions
xecive edl-------------------------------------------------- $2.4
Li1tive--------- -------------------------1. 8
Judicial ------------------------------------------------------------ 3. 5
Affected by comnpression ---------------------------- 42. 0

Tota ---------------------------------------------------------- 49.7
These cost figures are computed on the basis of an average increase ot s:YB t fo01 the top officials )] anll increase of $2.880 for employees atlected by the pay evilie. Tie total is less than estimated in the ('aomptroller ( ieneral's rep< rt wvhichi uses a cost of approximately $6.5 million for each 1 percent or a total of S52 million.
Tlie executive branch has advised that since the top executive salaries -Ind the emplo yees affected bY the compression are spread throughout the entire executive branch. all costs for the executive branch will be absorbed b- applicable achenc without any requests for addit ional ap)propriations for the current fiscal year.

8





27


PART II

HISTORY OF SALARY ADJUSTMENTS


THE PRESIDENT

Year Amount Statutory authority

1789 25------- 000 Act of Sept. 24, 1789, 1 Stat. 72.
Act of Feb. 18, 1793, 1 Stat. 318.
1873 --------50, 000 Act of Mar. 3, 1873, 17 Stat. 4S6.
1909 ------- 75, 000 Public Law 60-326, MaIar. 4, 1909, 35 Stat. 859.
1949 ------- 100, 000 Public Law 81-2, Jan. 19, 1919, 63 Stat. 4.
1969 -------200, 000 Public Law 91-1, Jan. 17, 1969, 83 Stat. 3.

THE VICE PRESIDENT

1789 ------- $5, 000 Act of Sept. 24, 17S9, 1 Stat. 72.
Act of Feb. 18, 1793, 1 Stat. 31.l
1853 ------- 8, 000 Act of Mar. 3, 1853, 10 Star. 212. 1873 ------- 10, 000 Act of Mar. 3, 73 17 Stat. 486. 1874 ------- 8, 000 Act of Jan. 20, 1574. IS Star. (part 3) 4.
1907 ------- 12, 000 Sec. 4, Public Law 59-129, FOb. 26, 1907, 34 Stat. 993.
1925 1------- 5, 000 See. 4, Public Law 6S-624. Mar. 4, 1925, 43 Strat. 1301.
1946 ------- 20, 000 See. G01, Public Law 79-601, Aug. 2, 1946*. 60 Stat. 550.
1949 ------- 30, 000 Sec. I. Publc Law 1-2, Jan. 19, 1949, 63 >tat. 4.
1955------- 35, 000 See. 4, Public Law 81-9, Mar. 2. 1955, 9 Stat. 11.
1964 -------43, 000 Public Law SS-426, Aug. 14, 19,4. 7 Sat. 422.
1969 .------- 62, 500 Public Law 91-67, Sept. 15, 1969, 83 Stat. 107.


Public Law 81-2, January 19, 1949, 63 Stat. 4, granted the President an annual tax exempt expense allowvance of 850,000, and the Vice President an annual allowance of S10,000, to -assist in d.fraving
expenses renting to or resulting from the discharge of his official duties." The tax exemption on these allowances was dicontinlled, effective January 20, 1953, by section 619 Public Law 82-183, the Revenue Act of 1951.
Economy legislation in effect in 19"32-3:5 reduced the Vice Predent's salary by 15 percent, 10 percent, and 5 percent suc(5esively during that period. Full salary was restored on April 1, 1935.

RETIREMENT

Each former President is entitled to receive for the rianider of his life a monetary allowance at a rate 1)er Znnuim whih. is equal to the annual rate of ba-ic pay of the fd f an Lxccuti v department (currently 860,000) and the widow of a IP >-dent i> entitled to receive
a pension of 820,000 per annum if -he wztivu the it to an F'eral annuity or pen,-on aid do('- not reIntriv,y >f r G .( 1?
note). Participation in the civil sivice re irm a: s-xt (on ; U.s.C. S331-34S) is available to the N-ie Pre-ideit oni hi application.

9






28


SPEAKER OF THE HOUSE

Year Amount Statutory authority

1789 -------- $12 Act of Sept. 22, 1789, 1 Stat. 71.
1816 --------3, 000 Act of Mar. 19, 1816, 3 Stat. 257.
1818 ------- 1 16 Act of Jan. 22, 1818, 3 Stat. 404.
1856 --------6, 000 Act of Aug. 16, 1856, 11 Sat. 48.
1866 ------- 8, 000 Act of July 28, 1866, 14 Stat. 323. 1873 --------10, 000 Act of Mar. 3, 1873, 17 Stat. 486.
1874 ------- 8, 000 Act of Jan. 20, 1874, 18 Stat. (part (3) 4. 1907 ------- 12, 000 Sec. 4, Public Law 59-129, Feb. 26, 1907, 34 Stat. 994.
1925 15, 000 Sec. 4, Public Law 68-624, Mar. 4, 1925, 43 Stat. 1301.
1946 --------20, 000 Sec. 601, Public Law 79-601, Aug. 2, 1946, 60 Stat. 850.
1949 --------30, 000 Sec. 1, Public Law 81-2, Jan. 19, 1949, 63 Stat. 181.
1955 --------35, 000 Sec. 4, Public Law 84-9, Mar. 2, 1955, 69 Stat. 11.
1965 --------43, 000 Sec. 204, Public Law 88-426, Aug. 14, 1964, 78 Stat.
415, effective Jan. 3, 1965.
1969 --------62, 500 Public Law 91-67, Sept. 15, 1969, 83 Stat. 107, effective
Mar. 1, 1969.

1 Per day in session.
ALLOWANCE
$10,000 expense allowance (taxable) to assist in defraying expenses
relating to official duties (2 U.S.C. 31b).

PRESIDENT PRO TEMPORE OF THE SENATE

Year Amount Statutory authority
1969 -----------$42, 500 Same as rate for other Members prior to 1969'
except when there is no Vice President, then same rate as for Vice President (2 U.S.C. 32). 1969 ------------49, 500 Public Law 91-67, Sept. 15, 1969, 83 Stat. 107,
effective Mar. 1, 1969.

MAJORITY AND MINORITY LEADERS OF HOUSE AND SENATE

1965 -----------$30, 000 Same as rate for other Members prior to 1965.
1965 ------------35,000 Sec. 11(e), Public Law 89-301, Oct. 29, 1965,
79 Stat. 1120, effective Oct. 1, 1965. 1969 ------------49, 500 Public Law 91-67, Sept. 15, 1969, 83 Stat. 107
effective Mar. 1, 1969.

10





29


MEMBERS OF CONGRESS

Year Amount Statutory authority

1856 ------------$3,000 Act of Aug. 16, 1856, 11 Stat. 48.
18t7 ------------ 2 250 Act of Dec. 2:3, 1857, 11 Stat. 367.
1866 -------------, 000 Act of July 28. 1866, 14 Stat. 323.
1873 ----------- 7, 500 Act of Mar. ) 1873, 17 Stat. 486.
1874 ------------5-, 000 Act of Jan. 20, 187 18 Stat. (part 3) 4.
Mar. 4, 1907-- 7, 500 See. 4, Public Law 59-129, Feb. 26, 1907, 34 Sta.t.
993.
Mar. 4, 1925 ---- 10, 000 See. 4, Public Law 68-624, Mar. 4, 1925, 43 Stat.
1301.
Jan. 3, 1947 ----- 12, 500 See. 601(a), Piublie Law 79-601, act of Aug. 2, 1946, 60 Stat. 850.
Mar. 1, 1955 ... 22, 500 See. 4(a), Public Law 84-9, act of Mar. 2, 1955, 69 Stat. I].
Jan. 3, 1965------ 30, 000 See. 204, Public Law 88-426, act of Aug. 14, 1964, 78 Stat. 415.
Mar. 1, 1969 -- 42, 500 Recommendation, of President under sec. 225, Public Law 90-206, Dec. 16, 1967, 81 Stat. 642.

Same rates now apply to the Resident Commissioner from Puerto Rico and the Delegates from the District of Columbia, Guam and the Virgin Islands.
2Monthly.

From 1789 to 1856, Senators and Representatives received per diem pay while Congress was in session, except for the period 18151817 when they received $1,500 a year. First established at $6 a day, per diem was raised to $8 in 1818 and remained there until 1S56 when Members of Congress were placed on annual salaries.
Economy legislation in the period 19&2-35 reduced the compensation of Members of Congress 15 percent, 10 percent, and 5 percent successively during that period. Full compensation was restored April 1, 1935.
RETIREMENT
Participation in the civil service retirement system (5 U.S.C. 8331-8348) is available to the Members of Congress on their application.
ALLOWANCES

$2,500 expense allowance per annum effective January 3, 1947, to assist in defraying expenses relating to official duty, for which no tax liability shall incur. Section 601(b), act of August 2, 1946, 60 Stat. 850.
Effective January 3, 1953, expense allowance made subject to tax liability. Section 619(d), act of October 20, 1951 (Revenue Act of 1951) 65 Stat. 570.
Effective March 1, 1955, the expense allowance provisions of the 1946 act were repealed. Section 4(b), act of March 2, 1955, 69 Stat. 11.

11







68-3"71 0 76 3






30


CABINET OFFICERS

Year Amount Statutory authority

1789) ------- $3, 500 Act of Sept. 11, 1789, 1 Stat. 68. 1799 -, 000 Act of .Mar. 2, 1799, 1 Stat. 730. 1819------- 6, 000 Act of Feb. 20, 1819, 3 Stat. 484. 1853 ------- 8, 000 Act of Mar. 3, 1853, 10 Stat. 212. 1873 ---------10, 000 Act of Mar. 3, 1873, 17 Stat. 486.
1874 ------- 8, 000 Act of Jan. 20, 1874, 18 Stat. (pt. 3) 4.
1907 --- 12, 000 Sec. 4, Public Law 59-129, Feb. 26, 1907.
1925------- 15, 000 Sec. 4, Public Law 68-624, Mar. 4, 1925.
1949 .2.. 2, 500 Sec. 1, Public Law 81-359, Oct. 15, 1949.
1936 -------25, 000 Sec. 102, Public Law 84-854, July 31, 1956. 1964 -----. (Included under level I of the Executive Schedule.)

The above rates have not, applied to every job in the President's Cabinet through the years, but each rate was generally recognized as the established rate for the head of an executive department.
In 187-3, the rates for top Government officials were increased, but the increases were repealed the next year.
Economy legislation effective in 1932-35 reduced rates 15 percent, 10 percent, and 5 percent successively during that period. Full salary was restored April 1, 1935.

THE EXECUTIVE SCHEDULE

19641 19672 19693

Level I ----------------------- $35, 000 (4) 5 $60, 000
Level IL ----------------------- 30, 000 () 42, 500
Level II --------------------- 28, 500 $29, 500 40, 000
Level IV ----------------------27, 000 2, 750 38,000
Level V ---------------------- 26, 000 28, 000 36, 000

Sec. 303, Public Law 88-426, approved Aug. 14, 1964.
2" Sec. 213, Public Law 90-206, approved Dec. 16, 1967.
3 Adjustments based on recommendations of Commission on Executive, Legislative, and Judicial Salaries (see. 225, Public Law 90-206, approved Dec. 16, 1967).
SNo change.
P1i, i 2 : 175, : p)ro\td I)c. 10, 1973, rediced(l the rate for Attorney

N .--Thu t 'r-iii i'c~i, )lllll-n(u!'! i- fi)r 1974 (Ao)(,ndix, 1975 Fiscal
'. 1 ():,0 W \(1.t d 6Y 29)3, adoipl(td Lv a \(tc of 71-26

Level I-Cabinet officers.
Level II-Deputy Scretaries of major departments, Secretaries of military depart ments and heads of major agencies.
Level III-Deputy Secretaries of minor departments, heads of middle level
agency's.
Level IV-Assistant Secretaries and General Counsels of departments, heads of
minor agencies, members of certain Boards and Commissions.
Level V-Administrators, Conmmnissioners, Directors, and Members of Boards,
Commissions, or units of agencies.
12








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15





34


COA-LNIISSION ON EXECUTIVE, LEGISLATIVE, AND JUDICIAL SALARIES
;(,(-(Pm 22,5, Piiblic Ltiw 90-206, approved December 16, 1967, 2 11w 'Ippoilitilletif Of a Commi-;-;ioii On Ex ecuzm(] to (,Iwe for the period of the
itillwilf Of it, new Commi,,,,ion to ,erve (111rill'-r Ow period (4 (werv rmirth 11,- czit yeak- fOltowlng the 1969 fiscal
V(1zI 1'.
T IW C( -TIMil'- -JIOn iz. compo,( d (Jimw memlwr ,, three to be appointed
pr(,17 1(1(,111, tWo bY tIW Pr(-- ](101-It Of tIlP SeTIItC, tWO, b'V- the
Of ill(, lfwi-w, zmd Iwo by ill(, Cliler Ju
The Commi- ion 1, required to conduct (Piidretini,11 reviews of,
111(1 ncommend ri)fe- of ]),IN- for, of the principal
office -11 ; of ill(, le('i'- I'llive 1)l"Incli, the '11dic, 1- .1 N, I the principal
official-; ()f Ih(, execlitive bl-'ITICII The quadrennial revlew-; -ano-1 recom11101-1(1:ltioii- are to be submitted to the Pre.,ident, who, in turn, is reqiiired to inchide in Ili,, next budget to the Congre: ,, his recomzt-, 1() file exact rato-,-; Of jmy he deom, ad\-i,-;able.
Tli(- Pre- Id(,nt' -; recommetidatiOn.- become effective witornatically,
within 30 da\- after Ili(, rec()inrnendatI*On-. iire ubmitted o the tile COTIOT(-:- -; (,na(+ a statitte (-,tabli.,hino- different
rZtte-, Of pay, or one of the I1ou,4o-,,, of Congres .,- di-4approves tiny or all of them.
F 1.c4C.kL YEAR 1969
Tile Cotyimi-- ,z;ion%; study atid recommewlation., for fi-wal vear 1,969 Were to Iho-, Pre, idenf Ili December 196S, and the Pre-, ident,
Ill Iurn, Iibmllted I)i- recommendation ., lo the Concrre- ; with his budo'et me, ,icre Ili Jtinitarv 1969 (.-;ee 1-1. Doc. No. 91-51). On Februill,%- 4, 1969, the Senate, by I \-ote of :34-47, defeated a resolution (Semite Re,:- S2) propo, iii(r to (H.,approve the Pre.,ident's recommendatl(-M On FCbI-11(1rV 5, 1,969, the House Rules Committee \-oted to t,ible i re-;()l0ion (11. Re- 142) providiiicr for the adoptionn of a rtl ()Iuilwi (11. Res. K13) witicli wa-, before the Po,.,t Office and Civil Service ('oninlittee, propo ;iilg to dl,-;appro -e the Presjdent' recomneither 11011,.,-(' adopted a resolution of dis,-tpproval, the Pr(- Ident%-, recommendation, became effective in February and March. t969 I., applirable for eacli group of officizalt; after Hie end of the : O-dav period following the submis:-;ion of the President's recommen(httions.
FISCAL YEAR 1973
The i'Ij)I)OiT-ItIll('IIt Of the MeTllber -; Of the COIII]Iii, ;,,ion for fiscal year 197:1 \va.-; not completed until December 11, 197., too late for the (1011-lmi- "I'lle Com III ls ,ioli's report w ,is submitted to the Pr(-.,ideiit late in Jime 197:), iiid dw Pr(-IdeiiC -, W01V -Ilblliltled to
i1w Cw!,,re ,- witli dw hmd-i l ()it Fehrimrv 4 1914 ( ,ce p. 10:10, Flcit! Yeill. 1975 1111(4zet).
I'lle W(11'0 V0100d 11poll I(1()ptIo1I Of
l (-(diii1mi 29:) (m M zii-cli 6, 19741 1) 1 vOte (d 71 to 26. llou,,e 110-(ditil(m '-,()7, (11-;tppr()vW -,, dw Prc ,Ide]1177- WIts
1,epwled to dw llml ,e (m _Nhrcli 4, 197-1 (It. Rept. 9:1-870) but, wzts 110t. wtcd oil 1) t1le ljolt- ('.
16





35


PAY COMPARABILITY

THE FEDERAL PAY COMPARABILITY ACT OF 1970

(Public Law 91-656, 5 U.S.C. 5305-5308)
This act provides a permanent method of adjusting the rates of pay of Federal employees who are paid under the statutory pay systemsGeneral Schedule, Foreign Service, and Physicians, Dentists, and Nurses of the Veterans' Administration. The act iilo authorizes adjustments to be made in the rates of pay of employees of the legislative, judicial, and executive branches of the Government of the United States and of the government of the District of Columbia (except employees whose pay is disbursed by the Secretary of the Senate or the Clerk of the House) whose rates of pay are fixed by administrative action pursuant to law, and are not otherwise adjusted by the President.
The procedure requires the President to direct such agent as he considers appropriate (normally the Chairman of the Civil Service Commission and the Director, Office of Management and Budget) to prepare and submit to him annually a reportThat compares the rates of pay of the statutory pay systems
with the pay in private industry on the basis of the annual survey
of the Bureau of Labor Statistics;
That makes recommendations for adjustments in rates of pay
based on comparability; and
Includes the views and recommendations of the Federal Employees Pay Council, established by this act, which is comprised
of representatives of employee organizations.
There is also established a three-member Advisory Committee on Federal Pay, an independent establishment, to assist the President in carrying out the policy of this act. This Committee shallReview the annual report of the President's agent;
Consider such further views and recommendations from em
ployee organizations, the President's agent, other officials of the
Government, or such experts as it may consult; and
Report its findings and recommendations to the President.
The President, after considering the report of his agent and the findings and recommendations of the Advisory Committee on Federal Pay, is required to make adjustments in the statutory rates of pay as he determines appropriate to carry out the comparability principles, effective October 1 of each year. The President is required to transmit to Congress a report of the pay adjustments he makes, together with the reports submitted to him by his agent and the Advisory Committee on Federal Pay.
ALTERNATE PAY PROPOSAL
If, because of a national emergency or economic conditions affecting the general welfare, the President determines it inappropriate to make
17





36


the pay comparability adjustments, he shall prepare and transmit to, the Congress, before September 1, an alternate pay adjustment plan. The alternate plan would become effective on October 1 and would continue unless within :() (lays after receiving it, Congress vetoed th6 plan. In.-such event, the President is required to issue the original comnparability adjustments. The congressional veto of an alternate plan would follow a, procedure similar to the procedure established for- congressional disapproval of an executive reorganization plan.

INITIAL ADJUSTMENTS
The 1970 act authorized the President to make the first two com-, parability adjustments effective on the first applicable pay period commencing on or after January 1, 1971, and January 1, 1972, respectively, rather than October, 1 of each year, as provided for the subsequent adjustments.
JANUARY 1971
The first comparability increase under the 1970 act was placed into effect as of the first pay period after January 1, 1971, under Executive Order 11576, dated January 8, 1971.

JANUARY 1972
The President sent an alternative plan to the Congress, dated August 31, 1971 (H. Doc. No. 92-158) proposing that the January 1972 (comparability increase be delayed until July 1972. On October 4, 1971, the House, by a vote of 174-207, failed to approve House Resolution 596, disapproving the alternative pay' plan. The Senate did not vote on a disapproval resolution. Since tile alternate plan was not disapproved by either House of Congress within the 30 calendar days of continuous session of the Congress followVin~g the submission of' such plan, as permitted under 5 U.S.C. 5305(c), the alternative plan beocame effective automatically .
Subsequently, section 3 of the Economic Stabilization Act Amendments of 1971 (Public Law 92-210, December 22, 15i71) directed the President to place the Ja-iuarv 1972 comparability adjustments into effect as of the first day of the first pay period which began after January 1, 1972, in amounts which would not be greater than the wage guidelines established for wage and salary adjustments for the private sector. Tile President placed such comparability adjustments into effect as of tile first day of the first pay period beginning after January 1, 1972, under Executive..Order 11637, dated December 22,

OCTOBER 1972
The next comparability increase was due on October 1, 1972. On August 31, 1972, the President sent a, message to the Congress (Hourse Doc. No. 92-349) advising that on the basis of the provisions of section 3 of the Economic Stabilization Act Amendments of 1971, he would recomnlld that the increases necessary to achieve comparability be paid starting January 1, 1973, rather than on October 1, 1972, in order that the Federal employees have only one pay increase during calendar year 19'72. These comparability pay increases were placed
18





37


into effect on the first day of the first pay period which began on or after January 1, 1973, under Executive Order 11691, dated December 15, 1972.
S fi)sequell y, 1it was hleld in ti1e eose of Vat;fl.1 J/'ainr?/ En plor?/(s lU ,on v. l;chuard AI. X;*,,, 492 F. 2(1 57, that the delbt to J.inuary 197 wl- ilpromper, Exe(uitive ()rder 11777, April 12, 1974, animildedI Exeecitive (O)r(lder 11691, D)eeemb11er 15, 1972), to provide that tile pay rie granted Ib Exeutiv le (O)rdler 11691 were to be retrcaetively effective to October 1972 rather: than January 1973.

OCTOBER 1, 1973
The President, on August 31, 1973, sent an alternative plan to the Congress (H. Doe. No. 93-140) proposing to delay the October 1973 increase until the first pay period beginning or or after December 1, 1973. On September 28,1973, the Senate, by a vote of 72-16, approved the resolution (S. Res. 171) disapproving the President's alternative plan to delay the comparability adjustment from October 1 to December 1, 1973.
There was no action in the House on a comparable resolution. The adjustments became effective on the first day of the first pay period beginning on or after October 1, 1973, under Executive Order 11739, dated October 3, 1973.
OCTOBER 1, 1974
The Prei(ldent on Auguost 31, 1974, sent an alternative plan to the Congress (II. Doc. 9:- 342) proposing to delay the October 1974 increase un11til January 1975.
On Sep)teniber 19, 1974, the Senate, by a vote of 64-35, approved the resolution (S. Res-. :194) d isapproving the President's alternative plan to delay tile compariability Idjustment froi October 1974 to January 1975.
Ihere was no action on n comparable House Resolution (H. Req. 1351). The adjtstIment became effectivee in October 1974 under Executive Order 11811, October 7, 1974.
19









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40


C01 '')T OF LIVING ADJU TNIENI-TS IN ANNUITIES5 U.S.C. 8340
T]w ()f the C'Ivi1Seivic(, Retiroment Act (5 U.S.C. S340)
proved( dult \d1ellevel. the nationwide Cwi-. unwi Pnce Index I1-1Ct'C'11_;es by al pel-cent. over div ludex foi- t1w moiali ii.,ed zi- the base for
t1w lll(),t I-ecent co-4-of-livilln, '1111mitv illcl.ezl' -'e "Ilid rem-im-, at or VX(TO(k :1 pen-cill Im. 11101101 l till llicretlll_ e equzil to the
11ILlle'l percelow2e rl -w Ill t1w index dunng tlie.i coil- ccutlve month ;, p11l1_; III Oddlilmwl I pci-cent) NN-111 be ninde autoniatictilly ill each '1111111it "I'lle 'mimit 111CITIti-41 becoli'le" effective on tile first day of Ille 0111-d 111midl f(d1mvillo. the period.
"I'lle plv '('Ilt pnwedmv of pr()vIdIIl(r adpi-,tinent in
tile of I"edend retiree-; L-; the re- ult of several aniendnient
to the (,,'ivll Cl.vlce Retil-ement Act.
Tlu, 19,62 timendment--, to flie ('1vil Service Retirement Act (Public i w S17 7 9, 1 ; 7 6 S ttit. 869) p!-ovided wilellevel. the Con"timel. Pi-lce Index of the Btireau of Lzibor ro, e bv an avenmve of 3
PTC(Illt 01' MM'C for n full ("llend11. venr above flie zivcni(ve bn-,e vear) a comp'tnible percentzlEre ITIC1,0111-W ill retlree- "1l1Tll1ItI('- would beCollie effective mi Aptil I of tile foll()Nvillo. Year. If dw 111(11'0111__ (' ill the Consulllel Price tll(l(,x was 11()t 3 percelit, the ('Ivil service ( 'milillis-sion had to wzlil 1111til tile f(dIoNvIllo. 'I'11111,11-v I for allotiler (Ictermillation.
Tli(', 1905 wiiendment-; to Ille C v*1 Serv*cc Retirement Act (Public 1,,,iw 205: 79 S40) (_)vared cost-of-livino. adjustment's to a lll(,)]*V
I IVO 111011011 v ill( wntor ill'tead of t1w "Iyer'.10-e cdelld"ll. yezil. indicz0or. Tlw- (' "I 111(111(1111ellt- pl-ovided t1l'it w1wIlOver tile Cml 'ulllev Price 111(1( \ 3 oI, 111(we for ')) cm l- ('ctltlve lllm ltll-- l "111111litie-,
Would be bv tile 111o'lle-4 pel-cent"IL )e dul-Illo. such :)) Illolllll' .'
With the im-tv'l-w effect ml tile fil-'t day of' the third liloilth
fojlmvilv) tile Period.
Section 204 of Ptiblic Lnw 91-93 (S.3 shit. 1:19) 11111elided tile Cost of Of I'm- to Include all additioll',11 I percent w1lell eacil zldju ;tnient i-, nizide. T'Jil-- additionzil I percent
ad1wtillclit fe.1tilre wa-, added to tnke Into accmillt the 5-111olitil penod w1ildi clape,, between tile illitiz11 Illontil ill NvIllch tile Consumer PrIce Index 1.1- cs 1) v 3 Percent ovei flie Inevious ba, 4(, month -and the molitil ill Nvilich tile increit-w 1- i-efiected In tile zimiult.v click. During till--; elzlp-cd pci-iod tile Cml 'mlwr Price Illdex coiltillue" it tipwtird I. rend uyellel."111 v '(1ttzillmig a tevel of more dian I perccilt of the actual percentnov 1"Ite of adjustment.

22





41


EXECUTIVE, LEGISLATIVE AND JUDICIAL SALARIES
MARCH 1969

Position Salary Statutory authority

President of the United States_ -------------- 8200, 000 Pubhlic Law 91-1,
Jan. 17, 1969,
83 Stat. .
Vice President of the United States ---------- 62, 500 Public Law 9V1-67,
Sept. 15, 1969,
83 Stat. 107.
Members of Congress, including the Resident 42, 500 ().
Commissioner from Puerto Rico and the Delegate- from the 1)i.trict of Columbia,
Guam, and the Virgin Islands.
Speaker of the Ioue of Representatives ... 62, 500 Public Law 91-67, Se~pt. 15, 1 969,
83 Stat. 107.
President pro tempore of the Senate-_ 49, 500 Do.
Majority and minority leaders of the Senate 49, 500 Do.
and the I(ouse of Representatives. Other offices in the legislative branch:
Comptroller General of the United States 42, 300 (1).
Deputy Comptroller General of the 40, 000 ().
United States.
General Counsel of the United States 38,000 ().
General Accounting Office.
Librarian of Congress ------------------ 38,000 (1),
Public Printer 3,------------------------- 000 0).
Architect of the Capitol ---------------- s, 000 (1).
Chief Justice of the United States ----------- 62, 500 ().
Associate Justices of the Supreme Court ------ 60, 000 0). Judges, Circuit Court of Appeals ------------ 42. 500 ().
Judges, Court of Claims -------------------- 42, 500 (1)
Judges, Court of Customs and Patent Appeals- 42, 500 (1). Judges, District Courts --------------------- 40, 000 ().
Judges, Customs Court --------------------- 40, 000 ().
Judges, Tax Court of the United States ------ 40, 000 (). Other offices in the judicial branch:
Director, Admniiiistrative Office of the 40,000 (').
United States Courts.
Deputy Director, Administrative Office 36, 000 ().
of the United States Courts.
Commissioner, Court of Claims---------- 36, 000 (1).
Refereo- in Bankruptcy (full-time maxi- 36, 000 (0)
mum).
Referees in Bankruptcy (part-time maxi- 18,000 ().
muml).
Offices and positions under the Federal Executive Salary Schedule in subehapter II of chapter 53 of title 5 of the United States
Code:
Level I ... ... ------------------------------- 60, 000 ()(2).
Level II ------------------------------ 42, 300 (0).
Level III ----------------------------- 40, 000 (1).
Level IV-----------------------------. 38, 000 (1).
Level V ....------------------------------ 36, 000 0).
Governors, Board of Governors, U.S. Postal a 10, 000 Sec. 6, Public Law
Service. 91-375, Aug. 12:
1970, s4 Stat.
775.1

1 See p. 20 on the Commission on Executive, Legislative and Judicial Salaries.
2 Pub lic Law !);- 17S, approved Dec. 10, 1973, rduced rate for Attrney leneral Saxb to s835.0)0.
SPlus $300 per day for each meeting up to 30 per year.

23












ATTACHMENT11

Thir CONGRESS w w
ISTNES S 10 N'- H 4i- &





ix rim HOUSE Ofs It IV I'll TE s E,-\ i,, -,k rrivivis A in- .197.5
Nir ............. in wMA t I", UK "Ing 101 W I i (-I I \\-.Is re fe I-red tot] w ('0111initlee (m -----------------------A BILL

7ro imicit, nic:j. rimcoquitcs (4)(1c, it) pinvide for 11111mal ('()StI if-livilm :1(1.jtlstl I 1cl its ill the rotc s (4 1)osic pay for Imsition, 1111dor the EXeciltive Schwhile wid for certain whcr exceittive,
IcKidative, alld judicid Wficcq and Imsitiolls.

Bc it cnactcd 1),,/ th(,, cwttc mid House of icpresent(12 tir(,s of the Univyl Slwcs of I mcric(I i)l Coiqlrc. s :1 That this Act illay 10, (Iled as the "Adend lixecutive Pay

4 EeformAct of 1975".

2. (o) -',ll1WlJP1Cr lf ()f (AMINT :111 Of tifIV 5, G I'llited Stoics ( 4A. Moting to Exectitive Schedule pa:Y 7 rjtCq. jsollj(qj(jc(j hy;I(Idilly nt dle cild there(4 the f(flh-m-ing

,cctioll:
(25)

(42)





43


5318. Adjustments in rates of pay

"Ellcctive 11 111(, hc ()11IIIHIIO' Id, 111c fir,4 zippliclide ]);I.\.

pel-H)d colim cm-1110, (111 (11* 111,1c]. ihe tll\. (it* l1w liwillh Ht

wIlIch III ;Id* (,I*I,(,(.l 111ldcl. cclloil

5 title iii III(, rilc, (11' IwY midic]. dw schedill"'. lh

G v;Ilc ol, j):t.v 1*()1* 11 C'*)ch Icv('I of the Exc(.1111VC

7 'SdwifilIc )w (Id.111-ic."I hY (III '1111(mill. I'mulded 14) dw

8 Ilclrc,- l 111111tiple Id, 'sIM) (()I. 11owecli 111111tiple, ()I*

9 100. to the 1wxI IlIg-her 111111tildc (it' -SOW) c1111,11 I() the

10 IwI.ccjIl; o--c (11, Ilclj '1111liud F t!(, (il, PJY Which 14)

11 flic m-cr'.111 'Iver"llf"k, PCITH li'llo'o ((I- -;cI 6)1-111 lit thc lvpw!

124 tntils)"1111cd 1() IIIc 1111dicl. -11ch ccllml ()I' the

E-I :ldjw tmcllt H] dic I-,Itc- id, 1);lY Ilildcr the OcIler'll schc(Illic.14 ( 1) ) (I) Th-it I)1 rt id'
15 44 11 Ic F"w c I! T I Vc -wIwd1lIc ()I' I It Ic .5. 1 '1111c d st, I Ic, 'mic.

I (i M mwdl'i 1c] v hb)NN, I]!(, Ilc()(11;1 u Illd *m] iwd';) Ic!Y

1 T '11)ovc (1,111,c I ) 1- '111wild"d 1() rc(l(l 11' hdlmvl-.

is Lcvcl I (it' dw !-'Ac(-miv(. ,- cficdldc "11)'Idle, tf) l1w

19 Imvill ) t'wr "d);ch III(, I-Ac (4 Jlwl]

20 I)c flic r,-I c dok-n!iMcd NvIlli rcpect to iwfi Icv(l

21 c1ripter I 1 (4 tidi- idj;II(-(1 hIv ccllmi

22

2: (2) Thm pm-l (d* cciit-!t rcl;tliii L h) ltvel f 14

1! c I-vocill1vt, Schc(IIIII.) (d' 1111( I-). I'lliled
26





44


1 illillic(lill-clY helmv ille cctiml licildill""). 111(1 imilledi'ItelY
"Ihm-c cllw-c (1) 1, mwildcd li) rc;Id r- ki,11mv,:

"'Level 11 (d, the Excculive 'S"cliedulc oppl*cs tf) 111c f(dP(): *I'()1I t'"I' W hi(d) IIIC I' t( i(

5 with jv,- pcct 11) ,Ilcll lcvcI 1111del.
(i clinpler I 1 (4 tillc 2, (i,- odjii- Icd I)Y seclimi 17),)'1,8 of this

7
Tllit p;trl ()t' ,ccllmi -')14 (rel(ititw to level Ilt oil' the Excclillvc Srlwdljlc) ()f tille 1-ilitcd st(lics Code,

10 mlII1cd1;ltcI.v 11chm- 111c cctlioll llcldijll,- 111d Im Incilli'l IclY

;l1wvc (.1,111sc ( I ) 1, 1111clided to lv;ld (1- hdlmv, :

"Levc] III of Ille FAcculive Sclic(fille Ipplic< 11) Ihc

Ill,(). pwitjom, I'm. wIllch l1w roc ()f j),I,;Ic PIY

14 h'll] )w tllc I.;i1c d0cl-11111wd wIth fv ,pcct 1() slich IcvcI luldcl.

15 ch;iptcr 11 (4 llilw 2, ;i, ;idp,-lcd ]i.\, ccilmi

I G i I Ic: ".
17 4 ) Th,) I f c, I () i i R11,11111'', 1() Icv(d 11' (11,

I c L' cc I I vc S (.11 cd I I I c f I I I! e I I I t cd St (I I c ( ml c. i I I II
111c -crtlml (11!d Imilledi'llciv ;Ihm-c
00 llllclldo, d to rc ld

21 IV ()t* Ilic Fxcrlil*lv( Schrdiilc ;ipplics 1() thc

1hc iwilwil J.,11c (4 ]); ,lc p;IY 2:3 holl I)c ific r;1Ic dcN.1-1111licd NN- ill )","Tect Icvcl 111)(1c].

27




45


t chapter I I of title 2, as adjusted J)y section 5,318 of dils

title

(5) That pait () f s ec t I () i 1 5:1 ) I G ) ( rclittiiio- to Icv( I

the 11]xcCutivc Schedule) of title 5, United Stotc's CmIc, 1111illediately below the sccilmi licadill'(4 ljld imillc(lialck- ljmvc

6 clause is ollicildc(l to 1-cad 1, t'()Ilmvs
7 "Level V of the EAccutivc '- 'chcdulc opplics to ill(ks followillo. positions, for which Ow milliml rate ()f ho"'IC P;1V

9 shall be the rate determined N\,*tll l.cspcct to such Ic\-cl 1111del.

10 chapter I t of title 2. (is zidjustcd J).v scct Imi 5,1) 1 of tIll",

title

(6) The zinalysi:., ()f subcImpter 11 ()f chapter 4 title
13
o, United States Code, i,,., amended hy adding the folhm-1110*

new item at the end thereof:
-,-)')1v". Adj list 11 lel its ill rat, .- of' VIV..

15 (c) Subsections (o) (111d (c) (1) ()t* secliml -):,)()5 of

i C) title 51 United skltc.- Code, rclalillo to Z11111till pz1v 1-cporls,

17 are cach oincii(led hy (iddi)i,-r ;it ilic ciid dici-cof flic follmvillO,

IS liew cllfcllce

19 "The repm-t trill"Illiticd to the Cmlo.rcs,- lilldcl. this ""Iij),- ccN 11011 1-1111(ill ",I)ccify the m-crill pcl-cc1lt;)1(-).c (11 the 'Id.illsillicill ill

2) 1 the rate's ()f ])it.\- lilldc). the 6clicnil ), (-Ilcdtllc lild 14 the

'20 2 adjIutillcilt ill the r(Ite's (4 p,1Y Ilildcl. dw ()tll('I' statiltol-Y 1)111V

23 svstem,,-"

24 SEC. :'). Section 104 ()f title ), lnitcd Stiltes
28



68-371 0 76 4






46


1 i110 to the rat ()fo salary o)f die Vice President, is amended bv

2stiin mi ot ",S62,500f, to e paid ( mm utthix'. and1( inserting, 3ill lieul tll(ieret ",,,62,500( adjusted effectivee at the begimi Il 4 o)f thle mionith ini which ani mdjuttiiicit takes effect und1(er secC 5 tion ;530 5 o4 title 5) in the rates ol )f 1111under the G~eneral (G Suh(-cdlulc) bY ant aijitunt, roinded- to the nearest multiple of ''7 00 )())o if mlidwayV bet Weenl multiples el* 1 [100 to) the nearest 8S higher miultiple o)f 8,100) equal to the percentage o)f such 9) per rl11111ia te which ct )V-esp ids to the overall average II0 percentage (ns set forth ini tile 1clmi't tranlsmlittedl to the 11 (mo-guess under' section n 530()f title 5) )f the aij ustmnelit inl

12 1uch Yates of pay. Such salarY shazll he paid 011 a monthly

: basis.".

14 Sl!c. 4. (a) Sectioni ((1) (a) o)f thle Legislative ReorgaI nization Act od 1946 ( 2 U.S.( '. t3 I1) is amended to read as



17T "S],c. Gm I. (a ) (1I) T11 miid 111nite I If pa~v forqis ''( A ) each Sento r, Memb11er (if the 11 ouse (if Representa tivcs, and Icc-t otcI'ic4Rpeet
2() at IVeS, and the Residenit (mI n iiiis"Im~iIroni fl 1 uerto) Ei(()

2 1 ( except a\, t 11tlewise p)V( -ided ill sill P1) igralis1 (B1)

22) a tit ((,,) ()f this pa nigra 1)), shll ]w1 ( tile r~ate deter2:3 ,,illej ft r uc(h posi tins under sct in 225 ()f the Federal
24 Sal 9vAt~ 97( 1 'S(. j~.) I -9) I as adjusted

b\- parajgra,(ph (2) 44 this- sullsccliinl 29




47


1 (B) the President pro temporc of the Sviuitc, tilt,,

2 -Majority Leader and the Millority Lcader of the Senate,

3 and the Majority Leader and thc Alinorit.v Lcader of thc

4 House of Reprcsentatives, S11,111 bc It thc ratc of 49"-)()()

cach, (-is adkisted kv parag-niph (2) of this sabscetion;

6 and

7 (C) the Speakcr of the House of Ecprcscjitntivcs

8 shall be at the rate of $62,500, ns adjusted by pt-tragraph

9 (2) of this subscc-tion.

10 (2) EfTective at the bcojiniino- of dic first applicilble

11 p,, i N, period commencing on or (Ifter thc fin't (hy of dic 111mit-11 12 in which ,ill (ndjustincia takes ct"I"ect under section of 13 title 51 United Statcs ( 'ode, ill thc rAo,-, of Iw.v under the

General Schedulcl CIICII allilmd r"Itc 1-cfel-l-cd to III pal-agraph 1,5 (1) shall be adjusted by (-ill mountn, ronndcd to thc ilc'lrc- I 16 multiple of $100 (or if illldwzly howccli illultiples of $100, 17 to the next hio'her multipIc of '1;100 equal to thc pci-cent(lo-c 18 of such -innual rate which con-c-sponds to the m-cnill (ivcr19 age, pel-ceilhure I
n (as' set forth ill the report tnuismittcd to dic 20 Congress tinder stich section of the mijil"t-111clit ill illc

21 rates of pay under the Gcnend Sclic(fide." 22 (b) SlIbscctiolls (11 tj I ro I I (d I d of section 20") 4

23 the Fedcni I LegIsLi tl vc Sd(t ry A ct of 1964 7 8 St,, t. 4 15 24 i-clatino, to the nimmil rate of lwv of certain 1coi"I'llive A25 cials, is aincuded to read -,is follows 30





48


1 20"). (a) The compensation of the Comptroller

2 Gelleral of the United States shall be at an ammal rwe which is equ(d to the rate for position's at level 11 of the 4 11]xectitive Schedule of stibehapter 11 of cliapter 5*1 of title 0I

5 Viiitcd I-itates Code.

6 it (b) The compensation of the Deptity Comptrollei7 Genei-al ()f the Viiited States shall be at an initial rate S -which is e(Imil t() the rate for pw4tions at level III (if stIcII

9 EXeclltive Scliedtile.

10 (c) The cmiipeii ;afimi of the Gelieral Comisc], of the

11 Viiited Stmes Oeitend Accomitiii,()- Office, the Librarian of 12 Coiio-rc,- ,,,, md tfic Nrcliitect of the Capitol shall be at IiI 13 I-,Itc whi(.11 is e(ItIal to the rate for positions at level

14 11' 4 ,,ttch Exectitive Sclic(Itile. 115 (d) Thc cmijpcw atioii of the DeptitY Librari,-m of

16 awl flic Architect of the (',,)I)itol sball. he

I i (,it all (111111MI] r"Ite NN-111ch i 4 C(Imd to the rate for positioms. :It IS Ievel V ()f stich IlIxectitive Schedide." 19 (c) ( I ) Scctioii of title 44, Uiiited Sfide,i; (ode,

20 1-clitim, to the c(mipciis(itimi ()f tfic Piddic Prilitcr ;md

2 1 DeptitY Piddic Pr1itter, i ; ;tmeAcd to read as- follo\v.s:
"303. Public Printer and Deputy Public Printer: pay

"The mmml rzitv of piv for the PtiWic Priiiter sh'ill. be 2 4 a rate whicli is e(livil to t1w nme for level TV of flio Exectitive 2 5 --,wjjediile of i i i 1)(I ia pter 11 of ch(,ipler 5.) of title 5. The 31





49


1 annuM r0e of piy for the Deputy Ptiblic Printer sluill he 'I 2 rate which is e(Itial to the r ite for level V of stich Exectitive

3 Schedule."

4 (2) The item reciting to section 303 in the cht-ipter

5 tinzilysis for A;ipter 3 of title 44, United States Code, i-s

6 amended to re,,id is follo-vvs:
"'I(M. Public Printer and Depity Public Pri
I I I intor: paN.

(-f) Chaptcr 21 ()f title 28, 1-71tited Stzitcs Code, rel'itillo. to o-cilend provisiow, -ipp1;W(J)le to (-()tiits zind jttdovs, 9 is -inielided by addhig it the eiid thereof the followhio. I I c Nv 10 section:

11 461. Adjustments in certain salaries

(;i ) EfTective zit the bewijiiiiiio- of the first -)pplic;)1)1e 13 1- iiv period coiiiincia-iiio- oii or aftcr tho., first by ()f the 14 ninth iii whi(Ii im zidjttstiiient tzikcs clTcct insider sectIO11 15 5;305 of title 5 lit the nites of piv tnidcr the Geiwl-ill Sclic(Ilile 16 (except is provided M tibscction (1)) eiwh nite
17 -which i,, -siil t
Ject to adjUstiuclit tiltdcr tlli sccfioll slizill I)e 18 to-Ijusted by zin miomit, r()iiiided to the iwzirest nitiltiple 19 of "SICO (ot i k I M,
if niidwiiv ],etwceii iwiltipics (,t* 100, to t, 20 ncxt hi-dicr intiltiple of 5100) 011-1,11 to the pen-(,Ifklo-( ()f 2 1 such szilzirv nite which (,orrc.,;po).id.s to "Ve ()vcnIlI (1vci-;I(),o 22 per(,ciikige (;i s set forth iii the rqmr[ traimniacd to the 23 Coiilgre. s insider siich ,cction 5305) ()f the ziditi,,:Illeilt: in 24 the rates ()f I)ziN- ttiider stich Schedid 32





5 0


(b) slll) ,cctimi ( I) slIzAll ll()t 'Ipply to) t1w extent it

WOUld I-ed1we the (if mv individliol cmllpell-- Zltioll Iw l.v 111tt. cctlm l 4)f of-IN-le 11t ()f Ihc Cm l- Iitli4 n(m 4 t1w t'nited Slmc,. be diminished dm-in -(). tlch III&

0 v1(111,11 *.- c( nit Him ) lwc III

G (b) scctioll -) tit' tide 2,- 1'nitcd Stot(-, Codc. i-clttIII(). to) 4 illsticcs (4 thc SlIpl-cille Cml].f. is. ninellded

to Ivzld (1,, 1 011mvs:

5. Salaries of justices

-riw ciiiet, Tn'41cc '111d ("Ich Jll ;tice S11,111 v,'Ich

I I I-ccclvc 'I ;It 0IIIIII;11 i-;Itc- (loci-miitc(I midci- cciion 225

12 (4 the Fc(Ici-,il Act ()t' (2 11151-: 161 ns

V m1pil
14 (2) Scolmi 44 (d) tif t1tic 28, Fiiitcd S'tztt(- CmIc, n

15 to 1(11-ic- (if (.11-cilit '1Id-)-e.- i ;m IcIldcd to I-cod 1,


17 d) Kwh (.11-cilit Jlid(re S11,111 I-eceive ('I ot 111

IS mmn;d i,(itc delcnithied imdei- cctiim 225 (4 thc FedenO

19 Si lo I-.\- A ct 4 1967 (2 1'. SJ '. )5 1 -.36 1 o< n djw ted I)Y
20
Scolmi Il),5 (Ff tifle 2,14. Fiiitcd S'titc ; Codc, i-cht(4 i( i ; (Imended if) I-eml 1!,

2 : ) 1,I)I :

24 135. Salaries of district judges

25 41-ict cmvf of the J-11ited Into,4

33





51


1 shall I-cceive a ot ;III ra tv detcrillilled itildcl.

sc( -tion 225 (of the Federal Solm-Y Act of 110G7 (2

3 tdjit- lcd h.v -wcfimi AGI ()f tith,.4 (4) 'llic ccmtd ,cnlcncc (4 cctioii ()f tide 2:- .
I I I i I I r t I I I r i c f j I I d S t f t 11 c Cmirl ()f C1,11111'. i, allicilded 11) I-cod 1, folbow, : **E ldl

1-cceive I ,,Ihlr v nt :III r;Itc deterillilled lilider cctlt)ll

s 225 tol' thc Fcdcr;il S(ilirv Act ()t' WGT (2 V.SJ t
4 1 1
hY c(-T*()Il 4M ()f I lli- t'de."

10 (5) T1 I c s(,(-( )I id ,( -I I c i i ce ; f c c t I I 1 2 1 f I t Ic 2,S.

I I I I I I tcd tZI tc', ( 'I odc. 1-clo t i I I ()- to ,; I 1;1!.i c (I f J [I dl 1- 11 e ( f) I 11, t 12 I)f Clr,40111-- 11111 11,11clit Appcll-- i,- '111wilded to rc(ld zr, 1'1)113 **F',,(l) 1-1)(111 1-cccive ;I "llm-Y ;It ;III Z1111111:11 r(Ite (fewl14 mined under cclion 225 ()f the Fcdcr.il S ilnr.v Act ()I* 1(,)f;T

15 (2 VS.C. zi-- ollw-tcd 1).v cctllm 461 i)f lhi-10 6 de. "

17 ( 6 The ccmtd ,cii iJ -- ccl H)n 252 (of ti I le 2,' ,

18 I'llitc1l Slltc-- ("mic, rcl ltlllo* tl) ()f tit(,

19 i.-,; (1111vildcd 1() 1-cad ;) fidlmv-, Lich Aizlll 1-( cciv( I

20 ,It ml 111111tA Filte dOcIlimicd jmdcr ,cctl(m 225 id' t1w Fcd21 enil So 1;i I-\- A rt ()f I !)f ;T ( 2 1 S.C I- zid.lil-l(A h.v
461 )f

So I I i ncl I ()f tl w h I-, t c I I I ci I ro, ()f rc; I i I 1 -4 -)2 24 1-rh t I I 1 v to 14 1 rI 1111111 P-, l M WY23 tItlc 2 1-nited Stiit( p1.c(-cd(- "Al lwrc "Zir.v lr tvcl34





52


illo. c-'l-pellso,", ', is (1111clided to rend 'I", k)kOm-": "I"Mch

4011cr shall rccclvc 1);I\, lt an 1-Me detcrillilled uIlder

cctiou 225 ()f thc Fcdcral Solory Act ()f 1 (967 (2 1 S.C.

4 f-"),(; I as 'Idjusted bY section 4 G I ()t' this title, and (ds()".
(8) The first "'clitclicc ()I* :,ectiml 40,1 ()f the 11)(111krupley
T S.(
G a n -1,1 t I I I c( )111 pcI Isa I i( )I I ( 4 I-cferce",

7 ";l"'\"lPt('Y, '1111"lolcd 1-1) 1-c(ld as' 'Tcferve" shall
I-cceive 'Is full cmillwils;ltiml for thch. scl-viccs slhlrics 1() I)c fixed J)v thc cmifel-clicc, In the liollt ()f the rec(millicild"Atimis (4 the cmillcilsi Illldc (11,1cl. advi.411(r with thc district 'iltdo-es ()f their I-espcctive cil-(.llits, '111d ()f thc Director, nt rate", ill the c;Isc ()f flill-time rcfcl-c(-,,, ll()t Illm-c th,111 the nite determilled foi. rcfcrcc, undcr section 225 (4 the Fcdcnd

l i Snhar.v Act ()f 196T (2 1',S.C. "Id.111'stcd lulder

I sect i i )I 1 4 0 1 () f I I t I c 2,8, 1 T nitcd st;ltc's ( ()dc' '111d ill the cnsc

I G ()f p:1 1.1 -1 il Ile refcrcc,", imt I 11(we th') I I mic-Im I f I )f ",nch rat c,

1 -1 1, ',() "Id'ill"'I cd.'!

9 ) The cction (m;d.vsi for cluipter 21 ()f title 2 S,

1 91 licil d A 1)v 'Iddillo, ot the end there(4
20 tj)(


35






ATTACHMENT II





)S

REPORT TO THE CONGRESS







Critical Need For A Better
System For Adjusting
Top Executive, Legislative,
And Judicial Salaries










BY THE COMPTROLLER GENERAL
OF THE UNITED STATES

F PCD-75-140
(37)
(53)






54




COMPTROLLER GENERAL OF THE UNITED STATES WASHINGTON, 0 C. 20548




B-101892




To the President of the Senate and the Speaker of the House of Pepresentatives

This report points out the critical need for a better
system for adjusting salaries of top Federal officials. The present 4-year process for assessing and adjusting salaries has failed to achieve its objectives. Such salaries have not changed since March 1969, and since then the salaries' purchasing power has decreased considerably. In contrast, salaries of non-Federal executives have increased significantly.

Because the lowest rate of the Executive Schedule-$36,000--is the statutory pay ceiling for other Federal pay systems and because these systems have had pay increases amounting to about 50 percent since March 1969, five management levels now draw the same salary. This situation has created great inequities and is having serious adverse effects on the recruitment, retention, and incentives for
advancement to senior positions throughout the Federal service.

It is crucial that legislative action be taken to
maintain reasonable and equitable pay levels for officials running the Government's huge, complex operations.

We made our review pursuant to the Budget and Account.,.c Act, 1921 (31 U.S.C. 53), and the Accounting and Auditir>q Act of 1950 (31 U.S.C. 67).




Comptroller General
of the United States


38








C o n t e n t s



WHO IS AFFECTED? HOW ARE THEY AFFECTED? WHY ACTION IS NEEDED NOW CONCLUSIONS AND RECOMMENDATIONS APPENDIX

I What has inflation done to purchasing
power of stagnated salaries?

II What has been the trend in non-Federal
executive pay since the 1969 adjustment in Federal pay?

III How extensive are the inequities of
the growing compression problem?

IV What losses in pay and benefits result
from salary compression?

V What have been the turnover rates of
and difficulties in recruiting key
personnel?

ABBREVIATIONS

AMA American Management Association

GAO General Accounting Office

GS General Schedule

HEW Department of Health, Education, and Welfare

NASA National Aeronautics and Space Administration

39






56


CRITICAL NEED FOR A BETTER SYSTEM FOR ADJUSTING

TOP EXECUTIVEr LEGISLATIVE, AND JUDICIAL SALARIES

In carry ng out our responsibilities for advising the Congress on actions needed to improve the economy, efficiency, and effectiveness of Federal operations, we believe that there is an urgent need to provide a better system for adjusting salaries of top officials in the executive, legislative, and judicial branches--Presidential and other appointees, congressmen, and judges. This report updates a GAO report (Feb. 1974) prepared in response to requests from a number of Members of Congress and GAO testimony (June 20, 1974) before the Senate Post Office and Civil Service Committee.

The need for early legislation to improve the pay adjustment process arises from the fact that there has been no adjustment in such salaries since March 1969 and the failure to carry out the intent of the Federal Salary Act of 1967 (Public Law 90-206), which contemplated that salary adjustments would be made every 4 years. During the 6 years since the last adjustment, there have been significant increases in (1) the cost of living, (2) salaries in the private sector, State and local government, and nonprofit organizations, and (3) the size and complexity of Federal programs.

President Richard M. Nixon recommended a catchup adjustment in three annual increments,, but the Senate rejected this in March 1974. President Gerald R. Ford's 1976 budget contains no provision for adjustments in top officials' pay. Under the quadrennial process provided for in the statute, the earliest possible adjustment would not occur until 1977. We believe that, if adjustments are not made before then, there will be further serious adverse effects on the recruitment, retention, and incentives for advancements to senior positions throughout the Federal service. This will make it increasingly difficult to manage Federal programs economically and effectively.

The cost to provide equitable salary adjustments-about $6.5 million for each 1-percent increase--would be small in relation to the potential benefits in carrying out programs in a Federal budget of nearly $350 billion proposed for fiscal year 1976.

It has been argued that any upward adjustment in
top officials' salaries would be inappropriate now when unemployment is increasing and the budget is running a large deficit. But equal consideration needs to be given

An






57


to the need to obtain and retain the highly trained and experienced executive, scientist, or medical doctor responsible for decisions involving vast sums and managing programs affecting the Nation's economy, welfare,. and security. In report after report, we point out the need for effective management of the Government's programs.

WHO IS AFFECTED?

--Members of Congress, judges, and Presidential and
other appointees under the Executive Schedule
Levels I to V (about 21400 persons).

--About 14,700 career civil service personnel. Executive Level V pay rate--$36,000--is the ceiling for
career personnel. General Schedule (GS) grade 18
and some GS-17 and equivalent positions reached this
ceiling in January 1971. Since then, all GS-17s,
89 percent of GS-16s, and 19 percent of GS-15s have
reached the ceiling.

HOW ARE THEY AFFECTED?

Top officials' salaries have remained stagnated since March 1969.

--But the cost of living had increased approximately 44 percent by December 1974, considerably eroding the salaries' purchasing power. If this trend continues to 1977, the earliest possible adjustment, a Level IV
salary of $38,000 will be worth about $23,200 and
the congressional and Level II salary of $42,500 will
be worth $25,900.

--Meanwhile, non-Federal executive salaries had increased approximately 37 percent by June 1974. The
projected increase for 1975 is 10 percent.

--During these years other Federal white-collar salaries increased by about 50 percent.

The Congress has recognized the impact of inflation by raising allowances for certain office expenses for Members of the House of Representatives and by increasing the ceiling for professional staff in the Senate from $36,000 to $38,470.

A GS-18 would be earning $10,300 more today if he had received comparability adjustments and the $36,000 ceiling had not been in effect. From January 1971 through December 1974,

41






58


his cumulative salary loss has been about $20rOOO and inflation has cut the $36,000 salary's purchasing power to about $27,600. At current inflation rates, by 1977,
the salary will be worth only $24,,200 compared to 1971.

Most incongruous of all is the fact that, without
pay adjustments employees with the same age and service can actually earn higher retirement annuities by retiring now than by continuing to work for the Government. Because retirement annuities are adjusted to the Consumer
Price Index (CPI), a GS-18 who retired in December 1974 would get $1,824 less in annuity than if he retired in
December 1973, even though he worked another year and paid $2,520 more into the retirement fund.

WHY ACTION IS NEEDED NOW

We believe that early action should be taken to enact
legislation to modify the procedure for adjusting top executive, legislative, and judicial salaries to keep these adjustments more nearly in line with the comparability adjustments provided for career employees. Actions to carry out these recommendations are believed to be of high priority to:

--Relieve hardships which have arisen due to cost-ofliving increases. (See app. I.)

--Reduce the widening gap since 1969 between pay for
top positions in the Federal Government and pay
adjustments which have occurred in the private
sector, in State and local government, and in nonprofit organizations. (See app. II.)

--Overcome the growing compression at the top levels
which results in:

1. The same salary for five levels of responsibility
(GS-15 through Executive Level V).

2. Inequities of annually adjusting pay for lower
levels whereas individuals at the senior levels
are blocked by the salary ceiling of $36,000.
(See app. III.)

--Avoid the losses in salaries and fringe benefits and
reduce turnover of key personnel. (See app. IV.)

--Help overcome (1) recruiting difficulties in filling
senior level positions, particularly in scientific,

42






59


medical,, and educational fields, and (2) the
disincentives to work for promotion and higher responsibility. (.-3ee app. V.)

CONCLUSIONS AND RECOMMENDATIONS

Effective Government does not just happen. It has to have good people to run it. The Government must obtain and retain the most capable professional and managerial people to effectively manage Federal programs. These programs affect the life, health, safety, and education of most Americans. It takes an organization, leadership, and all kinds of skills to make a Federal program effective. It is crucial that reasonable and equitable pay levels be achieved and maintained for top officials running the Government's huge, complex operations.

However, the present 4-year procedure for assessing and adjusting salaries of top officials in the executive, legislative, and judicial branches has failed to achieve
its objective of regular review and adjustment of such salaries. This failure, along with the pay ceiling it imposes on senior employees of other pay systems, adversely affects both the senior F.ederal employees and the Government.

The stagnated executive salary rates and the resultant
compression of salary rates in other pay systems have distorted pay relationships in Federal pay systems. They have vitiated legislated pay principles of external equity (comparability with private enterprise) and of internal equity (equal work for equ al pay and maintaining pay distinctions in keeping with workdistinctions). This situation obviously adversely affects retention, hiring, and motivation of the affected work force. Under current economic conditions, this situation is penetrating into increasingly more levels of work. The top 'pay rate of a GS-14 is only 8.25 percent from the ceiling.

Federal officials' salaries are significantly below their non-Federal counterparts' salaries. This disparity is rapidly increa ing.

The situation is becoming untenable. The Nation has
a tremendous stake in how well Federal programs are managed. If the loss of top managerial and professional people continues, the impact on the effectiveness of Government operations will have serious consequences.

Fundamental changes are needed in the pay setting
process for officials in the executive, legislative, and

43






60


judicial branches. The quadrennial review and adjustment is much too' long a period in our dynamic economy; salaries should be adjusted more frequently. We are not suggesting that Federal executive salaries be as high as their private sector counterparts nor that the salaries be significantly increased immediately. However, equitable.pay relationships which reflect responsibilities of positions should be maintained between and among the pay rates for such Federal offices and positions and between those and the pay rates of employees under the statutory systems.

A mechanism to adjust top officials' salaries more frequently and to maintain equitable pay relationships should provide for (1) an orderly, automatic annual adjustment, when warranted, and (2) appointment of an independent commission to periodically examine appropriate pay relationships in depth and report its findings and recommendations to the President and the Congress.

The annual adjustments should be indexed to change s in the cost of living or the average percentage increase in GS salaries each year. Indexing to the cost of living would provide economic increases to maintain the purchasing power of the salaries. Since the statutory systems' pay rates are annually assessed and adjusted on the basis of private sector rates, indexing to the percentage increase in GS rates would provide increases reasonably close to non-Federal-sector salary changes.

A related concern is the executive (supergrade) personnel system. In the last few years, improvements to
the system have been proposed, including a salary system
(1) with broad salary bands (from a specific point on the GS-15 band to the Level V rate) (2) within this broad band compensating on the basis of an individual's capability or contributions to the job, and (3) with mid-point congressional control. Changes are desirable to give management greater flexibility in assigning pay and establishing responsibility levels. The three supergrade responsibility levels are often too restrictive. The Congress may want to again consider establishing broad salary bands or establishing more grades. These considerations, however, should not hold back early consideration and resolution of the quadrennial process dilemma.

We strongly recommend that the Congress enact immediate legislation to reform the salary adjustment process for top officials. The new process should provide that:

44






61


--The salaries be adjusted annually, beginning this
year,, on the basis of either the annual change in the cost-of-living index or the average percentage
increase in GS salaries.

--An independent commission periodically review and
evaluate the relationships between top officials,
pay levels and between such levels and GS pay levels based on the relative responsibilities between and among such positions. The commission should report
its findings and recommendations to the President
and the Congress.

45

















































68-37 1 76






62


APPENDIX I


WHAT HAS INFLATION DONE

TO PURCHASING POWER OF STAGNATED SALARIES?

Consumer prices have increased significantly since the March 1969 pay increase for top officials, eroding the purchasing power of executive salaries by about 30.5 percent. At the earliest adjustment under the quadrennial process (about Jan. 1977), assuming CPI increases at the same average rate and no legislation is enacted, the purchasing power of Federal executive salaries will decrease by about 39 percent. The following table shows the estimated purchasing power of Executive Level salaries.

Executive Salary established Purchasing power
level Mar. 1969 Dec. 1974 Jan. 1977

I $60,000 $41,700 $36,570
II 42,500 29,538 25,904
111 40,000 27,800 24,380
IV 38,000 26,410 2 3,r16 1
V 36,000 25,020 21,942

The GS-18s and equivalents' salary has been limited by the $36,000 ceiling since January 1971. Their purchasing power has decreased to about $27,600 in December 1974 and will decrease to about $24,200 by January 1977.

46






63


APPENDIX II


WHAT HAS BEEN THE TREND IN NON-FEDERAL EXECUTIVE PAY

SINCE THE 1969 ADJUSTMENT IN FEDERAL PAY?

The Executive Schedule, with five levels, covers most officials in the executive branch above the GS-18 level. A 1967 law provides for (1) a quadrennial review of Executive Schedule salaries along with those of other officials linked to Executive Schedule rates (Members of Congress, Federal judges, and many of the employees in the legislative
and judicial branches) (2) the President to submit to the Congress his Pay recommendations, and (3) these rates to become effective unless the Congress enacts a separate pay law or either House of the Congress specifically disapproves of the President's recommendations.

The first quadrennial commission, in its December 1968
report, recommended salary increases in the Executive Schedule which were regarded as a catchup and were also expected to establish a more reasonable relationship with 1968 values. However, the President recommended substantially reduced salaries which became effective March 1969.

1969 1969
1968 commission's rate
Level actual recommendations established Shortfall

1 $35,000 $60o,000 $60rOOO $
11 30rOOO 50,400 42o,500 7 r 5 0 0
111 29,,500 46,,000 40FOOO 6rOOO
IV 28,750 43r000 38,000 5,,000
V 28rOOO 401,000 36r000 4,,000

The second quadrennial commission, in its June 1973 report, showed that compensation of executives in industry and State and local governments had increased approximately 30 percent since 1968,*

The situation has further worsened, Various independent studies show that private sector executive salaries have continued to increase since the second quadrennial commission's study.

American Management Association (AMA) data, published in November 1974, clearly shows the trend in private sector top management salaries since the last adjustment of executive salaries in March 1969.

47






64


APPENDIX II


Percent increase in salaries over_2reviousyt IE

1969 5.1
1970 6.5
1971 5.5
1972 5.1
1973 6.9
1974 8.4

This is a cumulative increase of 36.8 percent between June 1969 and June 1974. If legislation is not enacted before January 1977 (the earliest date of the next Presidential recommendation under the quadrennial process), the 36.8percent lag would widen (assuming a straight-line projection) to about 60 percent.

Other studies substantiate the AMA findings. In
November 1974 the President of Sibson and Company, Inc. (management compensation consultants), reported that:

"For t1-- past 10 years, managerial salaries have increased an average of 7 to 8 percent
every year in good times and in bad. Next
year will probably be the first in which increases will significantly exceed that rate.

"It's likely that 1975 will show increases of
about 10 percent.

"Why? Mostly because so many companies now review managerial salaries every year. A decade
ago, it was common practice to review management salaries every two years. Today, about 90 percent of the companies surveyed review
salaries of key persons annually."

In a December 1974 salary survey, the American Compensation Association found that:

--Officer and executive salaries in the non-Federal
organizations surveyed increased an average of
percent in 1974. This survey covered all sectors
non-Federal employment, including educational
institutions and State and municipal governments
woere executive salaries increased 7.7 percent and
8.2 percent, respectively, during the year.

increases for 1975 averaged 9.4 percent.

48





65


APPENDIX II


The responsibilities of officials in Executive levels I to V equal or exceed those of their counterparts in the private sector, though their compensation is substantially less. For example, the Chief Forester of the United States, Level V, with a salary of $36,000, will be responsible for expenditures in fiscal year 1975 of almost three-fourths of a billion dollars. AMA data shows that top executives of private companies of similar size earn salaries of $160,000 or more, plus bonuses and other benefits. Similarly, a June 1974 Civil Service Commission study, conducted in cooperation with the American Compensation Association, showed the average private enterprise salary rates for positions equivalent to GS-16 to IS to far exceed 36,000. Study data obtained from 128 companies revealed the following
private salary rates:

Private enterprise Average private
GS equivalents salary

GS-16 $45,146
GS-17 56fOll
GS-18 71,076

In testimony at hearings of the Senate Post Office and Civil Service Committee in June 1974, the Director of Compensation and Benefits of a large corporation, who had all.c., served as Director of Executive Compensation on the Cost of Living Council, stated that
"the budget and personal responsibilities of
such jobs as the Director of the Bureau of
Standards, the Director of the National Institutes of Health, the Commissioner of Patents,
can only be found in multibillion dollar corporations."



"The Director, National Bureau of Standards,
administers a budget of about 70 million dollars
per year. The organization is staffed with 1400 non-professional and 1600 professional employees, a total of 3000. Aside from the
work in maintaining physical standards of measurement, a large part of the work in the Bureau
is fundamental research. This position at
Executive Level V is paid $36,000. A Research
Director in private enterprise with similar
budget and personnel responsibilities is paid
from $100,000 to $150,000. For perspective,
this same salary level could be thought of with

49





66


APPENDIX II


respect to the Director of National Institutes
of Health this Government job is somewhat
greater in scope than the Bureau of Standards
position. At Executive Level IV it is paid
$38,000.

"The entire country depends upon protecting its technology through the U. S. Patent Office. The Commissioner of Patents has about
2100 employees, 1100 of whom are professionals and a high percentage of the professionals are attorneys. Paid in Executive Level V at $36,000, the Commissioner relates to the Heads of Patent Departments
in large corporations having 40 to 100 attorneys and paid from $65,000 to $90,000.11


These wide disparities between Federal and 'private sector pay of key executives have long existed.

Many State and local government positions command
considerably more than most Federal positions. The second quadrennial commission reported in 1973 that 1,858 State
and local government officials were paid over $36,000 annually, including 11094 who were paid $40,000 or more. The average salary of chief administrators in cities and counties of over 1 million persons was $39,500 and $39,433, respectively, in 1973.

Salaries of State and local government officials increased significantly between 1969 and 1973. Data for
selecteJ positions is shown below.

Percentage
Number of increase
Occupational grouping positions 1969-73

State mental health administrator 48 23
State public school officer 50 28
State appellate court judge 50 26
City manager (cities having over
10,000 population) 620 38
City attorney (cities having over
10,000 population) 393 54
City superintendent of schools 135 40
City health officer 156 46
City planning director 310 42
City finance director 374 44
All city employees 33

50





67



APPENDIX II


The New York State education officer's yearly salary increased from $45,000 in 1969 to $53,325 in 1973. The salary of the public assistance director of Oklahoma increased from $34,740 in 1969 to $50,000 in 1973. In contrast, the $36,000 salary for the Executive Level V position of the Commissioner of Education, Department of Health, Education, and Welfare (HEW), has remained static.

Though Federal-judicial salaries have remained unchanged since March 1969, salaries of State chief judges have increased 44.2 percent. In 1969 only New York State paid a chief judge more than a Federal district judge. In 1974, 20 States compensated judges at rates equal to or greater
than the Federal salary.

51





68


APPENDIX III

HOW EXTENSIVE ARE THE INEQUITIES

OF THE GROWING COMPRESSION PROBLEM?

The pay of a significant growing number of career
employees is being frozen at $36,000 a year. In general, pay rates of the other Federal pay systems are (1) governed by the legislated principle of comparability with pay in the private sector and (2) reviewed and adjusted annually by administrative action. Various laws provide, however, that Federal pay rates not exceed the rate for Executive Level V--$36,000 a year.

The pay rates for GS-18, the top step of GS-17, and equivalent positions in other pay systems reached the ceiling in January 1971. With each annual salary increase based on comparability with private sector pay, the ceiling's effect has progressively penetrated into e grades and, as of October 1974, 14,700 employees' pay was limited to the $36,000 ceiling.

For example, the sharp increase in the percent of GS supergrade employees (GS-16, GS-17, and GS-18) paid less than the comparability rate follows.

Date of GS Percentage of supergrade
increase employees limited to $36,000

Jan. 1, 1971 18
Jan. 1, 1972 33
Jan. 1, 1973 64
Oct. 1, 1973 85
Oct. 1, 1974 92

As of October 1974, there were 4,269 employees in grades GS-16, GS-17, arnd GS-18 and 4,464 employees in the top three steps of GS-15 who should be paid more than the ceiling. The following table shows the GS-15 to GS-18 salary rates, as determined by the comparability process, and the asterisks show the rates limited to the $36,000 ceiling.

Steps GS-15 GS-16 GS-17 GS-18

1 $29,818 $34,607 $40,062* $46,336*
2 30,812 35,761 41,397*
3 31,806 36,915* 42,732*
4 32,800 38,069* 44,067*
5 33,794 39,223* 45,402*
6 34,788 40,377*
7 35,782 41,531*
8 36,776* 42,685*
9 37,770* 43,839*
10 38,764*
52










APPENDIX III


The penetration into the lower grades will continue and may accelerate, The October 1974 pay increase for Federal white-collar employees was 5.52 percent and was based on March 1974 private sector pay data. Private pay has significantly increased since wage and price controls ended on April 30, 1974, which may be reflected in October 1975 Federal comparability pay increases. The salary rate for employees ir the top step of GS-14 ($33,258) is only 8.25 percent from the ceilings

Salary compression ser ioul ~keos o statutory
pay principles of internal equity--equal pay for equal work and maintaining pay distinctio.a in keeping with work and performance distinctions. All employees in grades GS-18 and GS-17, 89 percent of those in GS-16, and 19 percent of those in GS-15 now receive annual salaries of $36,000. The statutory pay principles dictat that those paid the same should have equal responsiiities. bt obviously they do not ln fact many levels of super vision in a typical major division or bureau earn the same salary, a conditio which would be considered u acceptable in the private sector. A June 1974 study by the Civil Service Comnission showed that the interrade differentials between private sector equivalents to GS-15 to 18 were as follows:

Between grades ec tage dirfer ial

GS-15 and GS 16 24.6
GS-16 and GS-17 26.3
GS-17 and GS-18 27.5

The most o-bvious adverse imnacs of coImpesso i at Federal employees are denied coparability salar inc eaes to which they would otherwise be entitled. Employees whose salary rates are below the ceiling have received an average increase of about 23 percent since GS-18s reached tue ceiling in January 1971.

The difference between tne pay of senior employees
and the pay of lowe level employees has narrowed shary during the past seeral years In December 1969, we
Federal salaries were unaffected b the pcesent ceili. the differential between the pay of an employee in tha first step of GS-12 and che pay of a GS-18 employee was 150 percent, or $21,313. After the October 1974 pay increase, the differential had narrowed to 95 percent or $17,537.
1'3






70


APPENDIX III


Continuation of this narrowing will not only further
distort pay distinctions in keeping with work distinctions, but it will reduce morale within the work force and have a negative impact upon the career incentives of employees
entering the career service.

54






71


APPENDIX IVWHAT LOSSES IN PAY AND BENEFITS

RESULT FROM SALARY COMPRESSION?

The most obvious loss is that employees are denied
salary increases to which they would otherwise be entitled. For example, the following table shows the annual salary loss of employees at levels GS-18, GS-17 (step 4), GS-16 (step 5), and GS-15 (step 10) based on current comparability rates.

Compara- Annual
b1iity salary
rate Celin loss

GS-18 $46,336 $36,000 $10,336
GS-17 (step 4) 44,067 36,000 8,0O67
GS-16. (step 5) 39,223 36,000 3,223
GS-15 (step 10) 38,764 36,000 2,764

When viewed on a cumulative basis, the inequity caused by the ceiling seems even greater. For example, a GS-18 employee's cumulative salary loss for the 4 years ended January 4, 1975, would be $20,039.

Comparability Salary
rate Ceiling Difference Period loss

$37,624 $36,000 $1,624 Jan. 71- $ 1,624
Jan. 72
39,693 36,000 3,693 Jan. 72- 3,693
Jan. 73
41,734 36,Y000 5,734 Jan. 73- 4,411
Oct. 73
43,926 36,000 7,926 Oct. 73- 7,926
Oct. 74
46,336 36,000 10,336 Oct. 74- 2,385
Jan. 75
$20,039

Moreover, as discussed on page 7, the affected employees are continually losing ground since the purchasing power
of the $36,000 salary has decreased by 23 percent during this period.

The ceiling also affects future retirement earnings. An employee's annuity under the civil service retirement system is based on his average annual salary during his
3 highest paid years and his years of service. The higher the average, the greater his retirement income. By compressing salaries below rates determined by the comparability process, the ceiling is penalizing employees, since

55










APPENDIX IV


the retirement income they would otherwise be entitled to is being reduced. Similarly, any cost-of-living increases 1/ received after retirement would ue based the lower amount.

As an example, at December 31, 174, the "'high-3" pay vere of a retiring CS-18 em loy wit 30 years' service
.000 because of the ceiling. "is earned annuity was
O uary 1, wr 't ees received a
eca~ t cost-cf-living adj moment !u(weasing the annut cy ~1,143 to $22,686. In contrast, the employee's
average wtour the salary ceiling would ave been $42,037
earning an annuity of $23,975. ith the january 1975 adJustment, this amount would have increased by $1,750 to $2 725--$3,039 more than e nity t ally received.

In planning whether to continue a career a retire,
oyee whose salary is at the ceilog must consider
live finanmial becaf I .L. i red t 'economic
.5ns, conti: e..ti of :.e ( 0K e1 eg vil. allow
Icoyees to earn more retireerne by retiring
v ~her than continuing to we~ fe h overnment.

r exad:e with
r ser e reir .s annual
autyas of-nay1 9,~oi e$53incuse
oftecost-fivnq ree qrnt9 toFdea red ec1, 1974,









Thismen anoi 2scaused pee3 age0($720)
eicIS fac 1ean he co ar1 vig nca ed ranted
o enuietanti recent yasov T3 u nony addstional


mae i on thepastceynarasfollow



tivi service retirement annuiein are adjusted on the fist dy f the thircl month that begins after CPI has
tLe~ ~t least 3 percent from the last adjustment and remain t *is higher leve1 for 3 conseut ve months.
The anrvitty increase 1s e cal tu the hig' set percentage
r c~asein 9 duing he cese ,ti~o moth aplu
~ ~~rcthsr

plu









APPENDIX IV





July 1 19736.1

L i l 3 1 1 7



34 percen-t. Curn ~or\poetosdrn he u double-digi nltorayprP idct ht rqi nuity increases will ron e q.

The abov is a mjor ~oni~e-atin in aro g h cial benefits hehLt otn acrer rtortr Other matters nld h !: fohrwokr1toe penses (e .g, transottn an Sa~rb c t)adFd eral and4 State incom-e ~~e eA Fdrlanie r nontaxable untilth plyesc t btio isro rd

Fo r ex pe six- of e eerG 18 egoa Cmis sioners ofth Inenl evneSvie etrc uig 1974. Al1 six ftoek. fiil eeu~ae g

But thes1ryclrgaeth ecnmc e tire too g-reat.


employees. decison to, se ote emlye-o ortre are:

-Six FedeJ :r aI Iuge hae esindsneNvme 9
to return to prvt ocrpatela prtie
more ta taytn ntels 4yan h
ave r age age of ti:s 7omrjdesa b~
and te r eotd~n~eriga u1e~r



Auoae Dat Sttm aeige to Eet 700
position i rvt nuty

--A G S -17 ~ oa iet~i h eatrn f r
po rta t io rcsdesigmtt t hepsro fA



area.

--EW1 t 71mo 7fosorlha~ dircao
such asadrt fhalhplc .c~





74


APPENDIX IV


pathologist, a researcher who pioneered the viruscancer research program, an internationally recognized authority on nutrition research, and a
clinical center director. All obtained jobs in
private industry with salaries considerably above
$36,000 a year.

--The Department of Defense reported 67 instances
over the past 10 months when pay limitations were
the principal reason cited by executives for leaving Federal employment.

--The Office of the Secretary of Defense recently lost six
key officials ranging in age from 41 to 55 years due
to the ceiling on salaries. Four executives left to accept better paying positions with private industry,
and two executives retired because of the salary
limitation.

--Three top positions in the Army Materiel Command were
vacated in 1974. Two top officials left because retirement was comparatively more attractive due to
the salary ceiling, and the third retired to accept
a position with private industry.

--The Defense Supply Agency lost 7 of its 22 supergrade
executives and 48 GS-15s whose salaries were frozen
at $36,000.

--The Department of the Navy lost a GS-17 who was in
charge of all naval aircraft production. With his retirement income and the salary of his new private
industry job, he earns $58,000 a year.

Irreplaceable experience and competence are being drained
off by the salary ceiling impact.

58








APPENDIX V

WHAT HAVE BEEN THE TURNOVER RATES OF AND

DIFFICULTIES IN RECRUITING KEY PERSONNEL?

Supergrade attrition substantially increased in 1973; in 1974 attrition decreased but was still'high.
FY FY FY FY
Reason for 1evn 1971 1972 1973 1974
Resignation 113 126 170 183
Retirement 333 325 535 331
Death 22 25 18 17
Other separations 33 22 30 28

Total separations 501 498 753 559

Population (note a) 6,478 6,566 6,485 6,630
Rate of attrition (per
100 supergrades) 7.7 7.6 11.6 8.4

a/ All GS-16 to GS-18 employees and employees whose salaries
are specified by law (mostly scientific and technical
positions).

The above data shows that a significantly increasing number of executives are resigning--62 percent higher in 1974 than in 1971.

Some agencies report that they are experiencing increasing difficulty in hiring qualified personnel from outside the Government to fill senior level positions. This is particularly notable in the scientific, medical, and educational fields. Personnel directors said the individuals best qualified to fill supergrade positions often are refusing to accept Government employment because they would suffer a loss of income.

Specific examples of hiring problems follow.

--HEW reported considerable difficulty in attracting
scientists who are recognized specialists in their
fields. Even to obtain individuals of less professional experience and stature, HEW must compete with salaries of $45,000, which many associate professors
now earn.

--A candidate refused to be considered for HEW's GS-18
position of Director, Office of Child Development,
because she was making $50,000 in the private sector.

59







-I)'








~~~~n~~r Apri 1974 21( phscaniLusd$6,0 fer



Cs-ituaes of Heattof

imorot'm r-l t a1ure de sie te rGS-P18 oi~



I~~~~ Traaande mnts








Th~~~~e hnn< a3600 roiin. of0 pt sitn










h~eri the~ae pitosiin l hreea rd









APPENDIX V


Skill levels in some supergrade positions have fallen because, on occasion, vacancies caused by early retirements
or resignations must be filled by employees who have less experience and lower skills. For instance, the head of a major Federal agency reported that turnover of the agency's executives was currently greater than at any time in over 20 years. In the first 6 months of 1974, the agency had to place 67 executives in new positions. The agency head said that such a great number of changes presented major managerial problems and created additional strain until the new incumbents could gain sufficient experience.

Moreover salary compression (see pp. 13 to 15) is making supergrade positions less attractive to career employees and may seriously affect executive morale as well as the willingness of employees to pursue an executive career. Some employees have made themselves totally unavailable for promotion since they reached $36,000 because they did not want the additional responsibilities with no additional income. Others' have expressed unwillingness to make geographic moves to new work assignments even when promotions were involved.






































68-271 -Q 7 -








DOCUMENT 4
94 ruCONGRESS SENATE REPORT
1st Sessio n 5No. 94-333





POSTAL SERVICE COMPLIANCE WITH THE OCCUPATIONAL SAFETY AND HEALTH ACT



JULY 25 (legislative day, JULY 21), 1975.-Ordered to be printed


Mr. MCGEE, from the Committee on Post Office and Civil Service, submitted the following

REPORT

[To accompany H.R. 2559]

The Committee on Post Office and Civil Service, to which was referred the bill (H.R. 2559)-To amend title 39, United States Code, to apply to the United States Postal Service certain provisions of law providing for Federal agency safety programs and responsibilities, and for other purposes having considered the same, reports favorably thereon with amendments and recommends that the bill as amended do pass.
TITLE I

PPuOSE
Under the July. 1973, collective bargaining agreement with the National Postal Unions, the Postal Service is bound to comply with the applicable section of the Occupational Safety and Health Act of 1970. The purpose of H.R. 2559 is to reinforce this responsibility by imposing upon the Postmaster General the statutory requirement that he comply with the Act by establishing and maintaining an effective and comprehensive occupational safety and health program for the Postal Service.
BACKGROUND
With certain exceptions, the Postal Reorganization Act (section 410), provides that no Federal law dealing with public or Federal contracts, property, works, officers, employees, budgets, or funds shall apply to the exercise of the powers of the Postal Service. The Occupational Safety and Health Act is not specifically applicable to the Postal Service. Section 410 (b) of title 39 lists laws which are exceptions to the general non- applicability provision. H.R. 2559 adds section 19 of 'the Occupational Safety and Health Act of 1970 (29 U.S.C. 668) to the list of exceptions.

(79)








4~~~~~~~~~~~ hca iu_ i01ijo te(f e toal Saf ety alid Health
A 1I II Iut >~i ~t \ i li i t ~w ~tiP\ ixof that, Act'. Thus,
I~~j VIo i c \Uid rquIc to est,(ablish. and imintin
'Ilectix ~ ~ ~ ~ 1 1i sp'etiii )c~aiia aety anitd health pror ~u XV~ co~u~ atiou ithrep eeatvels of Postal Service em~lu ce I ie ~oIu~I~4e tineAl W 1( be re~jired
to rovde afeandhealthful places anid condlitions of


1 ~oii p~;teIi eeliilpneft, and (Ik1eeJ~ al necessary
peotet cunloy e(s.
to kep adquate reodof all occupational accidents and il

tocii,~twt the Secretary of Lab)or with regard to the adequac as o f or and c (ontentt of the records kept.
to ma i!ke an anniiual report to tile S'ecretary of Labor with resji ect o ocul1ainal acc"-its tlnd injuries and the Postal ServThePotal>c x ceexpe~es 11o objection to the enacItment of IH.R. 25~-mht viw ta necsa since the Postal Service is already
)~npy ig wth he t] urnut of the lgslto underit collective
uarg~"! anm ag emn ith It(e National PosJtl I n ions.


TuLe CXr unite> 'n~ ldoithe1 occutft ional 'aety and health
piogaiiofth PsalSeCe and believes that the program- would be nnpro~ed ifc~nplaace i the Occuipational Siafety and Health Act
were ~ ~ ~ ~ i -euie blwrtle hnb negoot iated agareem ent with the
Iniom~~~~~~. H)au 11 ni~~cnuce te H~ouse Post Office and
(~~~ 11i1.Ii (omit I %o~ 1 Faii i .M i n abo r MNanagenit U > ~1I~. D~llti C dd a taf IPportis1ed v th at Sublconmmittee
1~ ~ ~ ~~~~~~~~i 1) \) cal lhpc ndelo zr ie~ e iorll-ortcomings AN 0w li ~ ltt eixcSx')~ ei~rxpedtitiouisly eliminated
it Cn1J~iai~c ~xitl 5uit~ saiii F( wer reqtiredl by law.
Ihe iI~uU~c ~ueuniniittee he rii_; WIiSt Report show:
Tue ste erie i rnoueIad iipb'Uilding indlustries have
idtaiitia1 loe aciet I aI e than the Postal Service does.
ul~l f ~ i >xI l ih k (if Postal1 Ser-Vice manage~~~aui~~~t copemn eootfi l. edo aey

C~~~~~~~~ ilal an nsfecnIton,~ were iiote(I by the House Subconlniltees saff t ~x eal ostOffices.

COST
Enatiteit0fthi 1~ea~tie W~ill not iesilt in increased costs to the
Posta 11vu~ eulc thei Postal Seri-ice is currently complying with secti19o the. Occupational Safety and Headlh Act of 1970.
2





81


_k( ',VNCY VTEWS
Following are the ,f the Po fal TT T

J r k i, v v i tar; t On"
T fc(
C I? 'ol, OP I I-) Os/ (1w/ 0;), '/ Nqfp.
00.
DEAF, MR. G' I 1.\ t RM _N I'Ps ti) you r rejii
ou :2(7.-)!) to tppl.v to C ie t-i,,ited
Provisions of 1 1\v pi-m-611n)(r t'()] Vt'(W1,1111 and
responsibilitiv-. Tliis hill po,- ,. iqi tlf e lffw -Z( 4 (),It June
16, 19 7, -). "Ind is now IAJOlk, r e 11 and
Civil Service.
sectlwt 410(a) of f-ifle "9 1) T'n 1" rl" I micz
i no Feder-il law dea111", vjh 1"'11JF, V t
Wullks, officers. ei i 11) 1 T1
exercise of the po\vel f thc j
appear to incluJ(2. ect
C t 0 f 19 1, 0 ( 2 .1-) U. S,
410 b) to d. 1111i"t1l, 19 o f
tion to a e ty c, ii ra I r I If 0 (a
t
The, Po, ,tal ,-;ervice hol-, (.mIII A
Virtue of Articlic XIV, e t I' T f I J C I T.-;
ing igretmeiit witi) tLe
1!1)4,-). lett -r to the piaised Post'al -_ ( rvice lowing u'rllis:
We are pleti- ,d 0 11 Y ('11) -'T-';
prwrrams that and
cie< PT(-)C(_1(1ure!--. '131d j'('(,,11
velol.,ml and iiiipleiiieni,,A pi-m-'(h, ilj("
conducting effective safety pj-(-(rram _-- i YJ d I, I t :v
teria of the Act and Executive () rdeT' 11 -17
Before assuming itq I)TTS(Int -1 q tion. I C)f
poli(-v,. the Postal ti(.1pation In the f(-i leral acrem-y -:il f-t v
zection 11 hi fa(t,, the
tl('011(1 Id"w e (ITOTjorahl(, f(,Tltiolo :tNv"1?,;f [,()T, I to !
(t V A V,-1 T'd COT11petiti(ITI fW

W*th
section of 0,, 11A. 11( tw- j tov.
bv io
requiiettwnt qf tit-Ie



3I





82


TITLE 11

PURPOSE
The purpose of the amendment to H.R. 2559 which constitutes Title 11 of the bill as reported is to provide a minimal salary adjustiiient, for top executive, legislative and judicial officers and employees of the U~nited States who last received an increase in compensation in March 1969. By so doing, Title 11 would meet what the Comptroller General of the United States has called "a critical need." It also would provide a measure of relief to the increasing numbers of senior civil serv-ice employees on the General Schedule affected by the $36,000 ceiling in effect now for 76 months.
The adjustment proposed in each instance would be an amount, rounded to the nearest inultiple of $100 (or if midway between multiples of $100, to the nearest higher multiple of $100), equal to the percentage set forth in the report transmitted to the Congress tinder section 5305 of title 5 which pertains to annual adjustments in the rates of pay under the General Schedule. The adjustment would take effect at the beginning of the first month in which the adjustment under section 5305 occurs. Unless altered by an alternative plan proposed by the President, which is not disapproved by either the Senate or House of Representatives, that adjustment occurs as of the beginning of the first applicable pay period cominiencing on or after October 1 of each year.
While Title 11 of the bill would not correct the pay gap which has grown since 1969 or the problem of compression which has taken place in the higher reaches of the Government's salary schedules, it would put a stop to the continued growth of the pay gap occasioned by the increased cost of living since March 1969 and the pay adjustments which have occurred in other segments Of the economy over that period of time. It would provide a cost-of -living type of relief to those officials and employees whose purchasing power has been eroded by almost a third because of inflation.
It is anticipated that the matter of the pay gap will be reviewed by the next~ Quadrennial Commission on Executive, Legislative, and Judicial Salaries during Fiscal Year 1977.

BACKGROUND
Salary adjustments for top-echelon officials of the Government are provided for tinder the Federal Salary Act of 1967, which authorizes a Commission on Executive, Legislative, and Judicial Salaries, whosc function is to study and review the compensation of the personnel affected and report its recommendations to the President no later than January 1 of the year following the close of the fiscal year in which the Commission is appointed to make its quadrennial review.
The President then makes his recommendations on the rates of pay for the offices and positions with which the Commission is concerned to the Congress, including those recommendations in his Budget message. The President's recommendations become effective at the beginning of the first pay period which begins after the thirtieth
4





83


day following the transmittal of his recommendations, unless Congress enacts a conflicting law or specifically disapproves all or part of his recommendations.
The last pay adjustments provided for under this Act took effect in March 1969. The most recent Commission was appointed by thenPresident 'Nixon in Devember, 1972, too late for it to include a review and make a report by January 1, 1973. Thus, that report was delayed a year, being submitted to Congress on February 4, 1974. The Committee on Post Office and Civil Service reported a resolution (S. Res. 293); on February 28, 1974, which would have permitted all provisions of the President's proposal, except those providing adjustments in the pay of Members of Congress, to take effect. The Senate, however, amended the Resolution to disapprove all of the President's recommendations and thus rejected the entire proposal on March 6, 1974.
Prior to the events of early 1974, the Committee on Post Office and Civil Service had reported a bill (S. 1989) which would have provided for a biennial review and adjustment, rather than a quadrennial review and adjustment, and which would have provided for the President's recommendations to be submitted to Congress no later than August 31 of every second year beginning in 1973. That bill was passed by the Senate but failed in the House, of Representatives.
Subsequent to the Senate's disapproval of the President's recommendations in 1974, hearings were held on proposed legislation with respect to the rates of pay for Levels 111, IV, and V of the Executive Schedule and certain positions in the Legislative and Judicial branches, as well as legislation to provide for a unified system for making pay adjustments for all civilian employees and officers.

STATMMNT
The salaries of the Government's key personnel, including Cabinet officers, other presidential appointees, Members of Congress, the Federal Judiciary from the Chief Justice down, and, as the result of provisions of the law freezing other employees' salaries, about 14,600 other employees covered by statutory pay systems and 600 officers of the armed services, are fixed. For many, they have been fixed since March of 1969.
TnMa.rch of 1969 the Consumer Price Index stood at 108.0. In May of 1975 it stood at 159.3, -tip 47.5 percent. The effect has been to eat away at the purchasing power of the affected officers and employees. By May 1975, according to information supplied the Committ' the General Accountina Office, individuals holding these positions had lost almost a third 6'f the purchasing power of their March 1969 salaries.

March 1%9 May 1975
Executive level salary purchasing power
-------------------------------------------------------------------------- $60,000 $40,680
------------------------------------------------------------------------- 42,500 28,815
III ------------------------------------------------------------------------ 40,000 27,120
IV ------------------------------------------------------------------------- 38,000 25,764
V ------------------------------------------------------------------------- 36,000 24,408

5





84


To put it another wta y. a Level V official would have to earn about t3O00 a year just to maintain the same standard of living he had in

Swii e w. last salary adjustment for personnel on the Executive Schedule or in comparable Legislative or Judicial posts, General Schedule enipoilees have received seven pay raises accumulating to about 3 percent. A a result, increasing nmnbers of employees in the G nera1 Schedule are affected by the pay limitation provision, 5 U.S.C. 330. which provides that General Schedule employees may not be paid at a rite in excess of the basic rate for Level V of the Executive Schedlile, which has been $36,000 for the past 76 months.
This salary compression weakens two statutory principles--equal pa1 yfor q ual ,ork and the maintenance of proper pay distinctions in keeping with responsibility. A June 1974 study by the Civil Service Conit mission showed that intergrade differentials between private sector eq ivalents to GS-1 to GS-18 were as follows: Percentage
Betwen gra es: differential
GS -15 and GS-16 ----------- -----------------------------24.6
GS-16 and -- ----------------------------------------- 26.3
tGS-17 and GS-18 ----------------------------------------- 27. 5
The same situat ion applies to the Federal Judiciary. Attorney's i a eyed by the United States Department of Labor, have
riSen 43.9 percent since 1969. while the salaries of U.S. Judges have not risn t all Salaries of State Chief Judges have increased 44.2 percent in tie same period. and, whereas in 199 only one state (New Ylork) paid its judiciary at a iate gr(eater thai the pay of a United States District Court Ju dg, there now are 20 states compensating thu j e at rates equal to or greater than the pay of Federal District (Court Judges.
An IbA u t itle In the opinion of the Task Force, the top priority to be
considered is remiliuneratlOn for ph y icamls.
We recolnieiid that legislat ix e action be sought in the curled 10 of i (ogl' old Ohil i!\Pellt lV( Iv for phvsicians, d nists, and nurses. uch ac tons are critically important Secase the pay rai., uticipated in October, 1974, w ill have nio benefit for 1.0 physicians and dentists and an additional 35 w ill not be able to realize the full percentage increase of the raise due to the $36,000 per annum salary restriction. If improved reinuneration is not forthcoming in the next few months. we ae c onvinced that the VA's ability to r rn si wellti- 'iafiel hisiciais N-ill be sriouIsl* imv paired and there will be an aceleIration of resignations and converSlolS to parti-tne oy Oiloylent for eonomilrea o Is.
11 n( mili e N1r of i m110br of noiila OUs situations cra d(1 by the present )36.00 pay ceiling. Continuation of a policy whi (A all pN si vely wipe out pay distinctions can only erode mllOle fit eint 'a io< aid h1a a negailve effect upon the
aier~-n vso 1inl ke j poit i As I ideeed. as the ('enerall
6




85


Accounting Office has pointed out in a paper presented to the Conmmittee, "The salary ceiling along with cost-of-living adjustments for Federal retirees has provided increased incentives for eligible executives to retire."
Between November 1, 1974, and February 1. 1975. the retirement rate of eligible Government executives was alhnost 300 percent higher than the Government-wide average. And they retire at a younger age. resulting in added costs to the retirement fund. The GAO reports that at least seven former Government officials now receive annuities greater than $36.000.
Between now and the end of the month many more key personnel will retire because of this anomaly. The Commissioner of ocial Security, in a June 25. 1975. memorandum to the Secretary of Health. Education, and Welfare. sketched the following state of affairs in but one agency:
THE C031OMM3ISSIONER OF SOCIAL SECURITY, Baltinwre, Md., Jn 25. 197.
Note for the Secretary.
Enclosed is a summary of retirements from key positions that will occur between now and the end of next month-the deadline for the 1975 benefit increase on CSC retirement.
In all, there are eight definite and one probable. Four of the nine are Regional Commissioners (leaving five).
The two top posts below the Commissienr-the Deputy Corminiissioner (Art Hess) and the Associate Commissioner for Operations (Hugh McKenna)-will be vacated. (To make matters worse, the next highest post. the Associate Commissioner for Program Policy and Planning. has been vacant for some time. Our top candidate backed out at the last minute to take an offer outside of Government paying. $14,000 more than we can offer.)
In all (counting the probable). we are losing nine out of our top nineteen supergrade posts at one time-in the midst of a major reorganization and in the midst of one of the heaviest workload and policy choice periods ever faced by SSA. While some of the retire .nt. would have occurred sooner or later due to age (SSA's top staff ha been allowed to stratify too much at one age level), all of the retiree cite dollars and cents advantages of retirement over work (and the lak of any prospect for a raise in Federal salaries) as at least one of their reasons for retiring now. Seern out of ine cite the Federal salary versus retirement increases as the only reason for leaving at this tie.
As you can see from the enclosed listing. all of the men will draw high retirement incomes compared to their present fixed salary of $36.000.
This is not smart government.
It's not smart economics.
For that matter, it's not smart anything.
I know that you have tried to help. but I am personally discouraed that any of us has any real chance of stopping the present trend in either salaries or retirements.
JAMES 13. CARDPWE.
Enclosure.
P.S. Since this was written. one more retirement has been recei ved.





86


Nor is the Social Security Administration alone. Consider these recent developments:
Since November of 1973, eight Federal judges with lifetime tenure have resigned to return to private life and some have very specifically stated that the reason for their decision was the freeze on salaries. So far as the record can be determined, one would have to go back from 1973 to at least 1941 to equal the judicial retirement record of the past 20 months. The latest example comes from New Orleans, where the retirement of Judge James Comiskey of the Eastern District of Louisiana becam-e effective June 16. He left to become the president of a banking concern.
An individual declined appointment to a Department of Commerce's GS-16 Associate General Counsel position in order to accept a position paying $50,000 in private industry.
Six individuals declined the Library of Congress's S-17 position of Senior Specialist in Taxation and Fiscal Policy because they were all earning higher salaries in their present employment.
Two candidates said they could not afford to accept HEW's
GS-18 position of Director, National Institute on Aging at the National Institutes of Health because of the pay limitation. One individual, currently with NIH, refused promotion to this position because he would not have received any increase in pay.
In June 19 75, six of the Department of Treasury's 12 top of
ficials announced their departures. The Under Secretarye of the Treasury for 'Monetary Affairs resigned his $.;40,~000 post because he said he was "broke". Hfe said there were no reasons for leaving
other than the need to replenish his "flat pocketbook."
HEW's GS-17 Associate Administrator for Planning, Research, and Training resigned to accept a higher-paying job in
private. enterprise.
The GS-18 Executive Director of the Federal Power Commission retired to see-k employm-ent in private enterprise because
of the executive salary ceiling.
NASA's Associate Administrator resigned to accept a position
in the~ private sector and in leaving indicated a dissatisfaction
with Federal salary levels.
The Executive Director and the General Counsel of the Civil
Service Commission retired because of the freeze on supergra-de
pay.
Five top officials of the Social Security Administration announcedi their retirement because staying on- in the frozen pay
levels would denyv them cost-of-living increases as retirees.
Four GS-16 Administrative Law Judges in the Feder'al Trade
Commission retired indicating their decisions were influenced by
the effect of the salary ceiling on their annuities.
During January to May 1.975, the Department of Defense
reported that the salary ceiling was an important part of the decisions of 17 executives to resign or retire, three employees to refuse promotions. reassignments, or transfers. and 22 individuals
to decline Government job offers.
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The Committee agrees with Commissioner Cardwell of the Social Security Admninist ration that this is not smart government, not smart economics, not smart anything.

Co--umimrEE ACTION
Hearings of the Committee on Post Office and Civil Service were held on S. 1989 in the 93rd Congress on June 26, 1973, and on S. 3049. S. 3550 and S. 3551 in the 93rd Congress on June 19 and 20, 1974. The Committee ordered H.R. 2559 as amended reported by a vote of 6-3, with Senators Randolph, Burdick and Belimon voting in the negative, after defeating two proposed amendments. The first proposed amiendmnlby Senator Randolph, would have delayed apiaino il
11 to Members of Congress only until January 1977. The second amendment, by Senator Burdick, would have extended the benefits of Title 11 to niem-bers of the Federal Judiciary only.

SECTIONAL ANALYSIS OF TImLE I I
Section 202 of the bill provides a new method for annual adjustment of rates of pay for each level of the Executive Schedule. The adjustment would become effective whenever a comparability adjustment is made under 5 U.S.C. 5305 in the statutory salary systems (normally in October of each year). The amount of the adjustment would equal the percentage of the comparability adjustment, rounded to the nearest $100.
Section 203 relates to the salary of the Vice President and provides a method for the automatic adjustment of the rate of pay for the Vice President under a formula identical to the formula prescribed for the Executive Salary Schedule.
Section 204 covers the rates of pay for Members of the Congress and officials of the legislative branch and includes in 204 (d) an amendment to the Federal Pay Comparability Act of 1970 to reflect the level of pay currently authorized for certain officers and employees of the legislative branch. The section provides that the pay of the affected Members, officials and employees would be adjusted under the same formula used for the Executive Salary Schedule. Section 205 relates to the salaries in the judicial branch, which also would be adjusted under a formula identical to that used for the Executive Salary Schedule.
Section 206 would correct an oversight in the Federal Salary Act of 1.067. title 11, Public Law 90-206, so as to include the offices of' Vice President and certain legislative branch officials within the purview of the quadrennial salary review of the Commission on Executive. Leg islative, and Judicial Salaries. It also provides that the salaries of those offices may be adjusted as are other legislative branch salaries under the provisions of this bill.
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88



(COSTS

(Cost estmiiates are based on the following accounting of affected personnel
NUMBER OF EMPLOYEES
E-Lx, euitive schedule:
Le vel I----------------------------------------------------------- 12
Lel I--------------------------------------------------------- 53
Leve j--------------------------------------------------------- 102
Level IV -------------------------------------------------------- 347
Levl---------------------------------------------------------- 271

Total ----------------------------------------------------------785
Legislative (Members and top officials) ----------------------------------560

Judicial:
(Thief Justice of the United States--------------------------------- 1
Ass-Oe'iate Justices, Supreme Court --------------------------------- 10
,Judgezs Circuit Court of Appeals------------------------------------ 144
Judgs..z Court of Claims-------------------------------------------- 10
Judges. Court of Military Appeals -----------------------------------3
Judges, Court of Customs and Patent Appeals -------------------------6
Judges, District Courts --------------------------------------------502
Judges, Customs Court ---------------------------------------------12
J dgsTax Court of the United States ------------------------------22
Admiinistrative Assistance to Chief Justice ----------------------------1
Director, Fiederal Judicial Center ------------------------------------1
Di)Irector, Administrative Office of the U.S. Courts ----------------------1
D, ,ifyt Director, Admnistrative Office of the S.Courts ---------------1
C Iminissioners, Court of Claims -------------------------------------16
Referees in Bankruptcy (full-time maximum) ------------------------190
Referees in Bankruptcy (part-time maximum) -----------------------30
U.S. -Magistrates------------------------------------------------- 133

Total --------------------------------------------------------- 1,083
Affected by $36,000 ceiling:
Executive branch:
General Schedule -------------------------------------------8, 750
Veterans Schedule ------------------------------------------2,000
Foreign Service Schedule -------------------------------------1,300
Others ------------------------------------------------------ 2, 100
Judicial branch--------------------------------------------------- 350
Legislative branch ------------------------------------------------100

Total ---------------------------------------------------------14, 600
I1U addition to the above, there are 600 officers in the armed services Wihosei Pa is limited by thie $36000 ceilings.
t h October 19 75 comparability increase for employees on the General Schedule is estimated at about 8 percent. On that basis, the in(Teased cost to thie Goverrnment as the result of passage of Title HI of H.R. 25,59 would be $49.7 million, broken down as follows: In million
Executive schedule --------------------------------------------------- $2. 4
Legislative-------------------------------------------------------- 1.8
Judicial --------------------------------------------------------------3.5
Affected by compression---------------------------- ---------------- 42. 0

Total --------------------------------------------------------- 49. 7

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89


These cost figures are computed on the basis of an average increase of $3,200 for the top officials and an increase of $2,880 for employees affected by the pay ceiling. The total is less than estimated in the Comptroller General's report, which uses a cost of approximately $6.5 million for each 1 percent or a total of $52 million.
The actual range of possible increases in the General Schedule at this time runs from 8.6 percent to 5 percent, the latter representing a possible ceiling which the President might recommend as an alternative. Thus, the annualized cost could range f rom approximately $52 million to approximately $31 million, depending upon f uture developments. Future annual costs would be dependent upon the results of anioul-1, pay comparability studies.
The executive branch has advised that since the top executive salaries and the employees affected by the compression are spread throughout the entire executive branch, all costs for the executive branch will be absorbed by each applicable agency without any requests f or additional appropriations for the current fiscal year.

AGENcy Vmws
Excerpted from the 1974 Annual Report of the United States Civil Service Commission:
Pay system.3
Nothing is more basic to sustained effective work than fair pay. Under the Federal Pay Comparability Act the salaries of Federal white collar employees are periodically realigned to keep them comparable with similar jobs in private industry.
The Civil Service Commission took action during FY 1.974 to make. certain that the basic process by which pay comparability is determined is sound, and fair to both employees and taxpayers. During the year the Commission initiated no less than a dozen separate studies. examining each phase of the comparability process. Previous studies indicate pre-sent methods of determining comparability are reasonably accurate. But in the future, as the result of these new studies, the Government will be able to set Federal salaries that are comparable with those in the private sector to a very high degree of accuracy, supported on a thoroughly sound statistical basis.
Pay for executives and managers in the Federal service presents a severe problem. Because employees at the top of the regular schedule and those in the executive levels are fixed by law and tradition into a strict relationship with Congressional pay, and since Congress has been reluctant to raise its own pay in recent years, FY 197 4 saw another 12 months Lo bv without an increase in the pay of executives. Bee,-' iiQo the General Schedule of graded pay levels continually rises to mal", itain comparability with private sector salaries, and executive p,,iN- is effectively f rozen, there is increasing compression at the top. One eAect of this compression is to place an increasing number of reporting levels at the same pay level.





90


Top Federal managers, scientists, and engineers in jobs that would pay $50,000 to $70,000 in private employment, as shown by our studies, have been at $36,000, without a raise, for 3 to 5 years. As a result the Government is losing some of its most talented and experienced managers and other professionals. The Commission continues to urge the Congress to correct this situation, which saves a minimal amount in comparison with the overall Federal payroll, and costs the taxpayers a considerable investment in top-rank employees who are greatly needed to meet the demands for effective governmental operations.

COMPTROLLERGENERAL OF THE UNITED STATES,
Washington, D.C., July 15,1975.
Hon. GALE W.McGEE,
Chairman, Committee on Post Ogee and Civil Service, U.S. Senate.
DEAR MR. CHAIRMAN: On February 25, 1975, we issued a report to the Congress emphasizing the critical need for a better system for adjusting top executive, legislative, and judicial salaries. This report pointed out that there has been no adjustment in such salaries since March 1969, and concluded that the provisions of the Federal Salary Act of 1967, which contemplated that salary adjustments for such positions would be made every four years, have failed.
To date, no action has been taken on our recommendation that im.iiiediate legislation be enacted to reform the salary adjustmentDrocess for top officials. We recommended that a new process should provide that salaries be adjusted annually on the basis of either the annual change in the cost-of -living index or the average percentage increase in General Schedule salaries and that these pay levels be periodically reviewed by an independent commission.
Under the current quadrennial review and adjustment process, the next earliest possible adjustment could not occur until 1977. We believe that if adjustments are not made before then, the adverse effects on recruitment, retention, and incentive for advancement throughout the Federal service will continue to cause serious damage to the capability to manage Federal programs economically and effectively.
Enclosed is an updated synopsis of information included in our February report showing that the situation continues to worsen for Federal executives and their employing agencies and promises to deteriorate even further.
We trust that this information will assist the Congress in its consideration of this matter.
Sincerely yours,
ELMERB. STARTS,
Conptro7ler General of the United States.
Enclosure.
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91


GENERAL ACCOUNTING OFFICE
THE EXECUTIVE PAY PROBLEM IS BECO IING INCREASINGLY CRITICAL
THE EXECUTIVE PAY PROBLEM IS BECOMING INCREASINGLY CRITICAL
In February 1975, we reported to the Congress that there
was a critical need for a better system for adjusting top executive, legislative, and judicial salaries. As we reported, the impasse on adjusting top officials salaries has frozen salaries since March 1969 for Members of Congress. judges, Presidential and other appointees, and about 14.10 career civil service
personnel.
The quadrennial review and adjustment process has failed.
It is much too long a period in our dynamic economy. Increases should be automatic. The last increase was proposed in 1974. A significant percentage increase was needed but the Senate rejected the President s proposed three stage increase.
Failure to adjust top officials salaries and resultant compression in other systems create great inequities and are having serious adverse effects on recruitment. retention, and incentives for advancement throughout the Federal service.
To date, no action has been taken on the General Accounting Office recommendation that legislation boenacted to reform the salary adjustment process for top officials. This paper updates information included in our February report which shows that the situation continues to worsen for Federal executives and their employing agencies and promises to
deteriorate even further.
Erosion of purch4tsing power
Inflation has continued to erode the purchasing power of
executive. legislative, and judicial salaries. By May 1975, individuals holding these positions had lost almost a third of
the purchasing power of their March 1969 salaries.

Executive level March 1969 May 1975 pursalary chasing power

--- -- -- -- -- -- -- -- --- -- -- -- -- -- -- -- --- -- -- -- -- -- -- --$60:,000 $40,680
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 4 2 5 0 0 2 8 8 1 5
III - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 4 0 ,0 0 0 2 7 12 0
IV - -- -- - - - -- -- -- - -- -- - - -- -- - - - - - - - - - - -- -- - -- - -- - 38 ,0 0 0 2 5 ,76 4
V ------------------------------------------------------------------------- 36,000 24,408

To put it another way. a Level V official would have to earn
about $53,000 a year just to maintain the same standard of
living he had in 1969.

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[lhe compression problem is becoming more severe
Since March 1969, General Schedule employees have received seven pay raises accumulating to about 50 percent. Estimates of the General Schedule increase, scheduled for October 1975, run as high as nine percent. 'While the President has indicated a desire to hold the raise to five percent, additional employees will reach $36,000 regardless of the percentage increase.

Percent of employees at $36,000
If October raise isCurrent-_ _GS pay rates 5 percent 9 percent
18 --------------------------------------------- 100 100 100
17 ----------------------------------------- 100 100 100
16 --------------------------------------------- .89 100 100
15 - - - - - - - - - - - - -19 46 62
14 ---------------------------------------------------------------------- 3

Non-Federal executives have received sutbstanltial pay
iwrreases
From 1969 through 1974, non-Federal executives' salaries increased about 37 percent and were projected to increase another 10 percent during 1975. Similarly, senior civil service employees in other countries have had substantial pay increases since 1969. The pay of top government positions in En~r1and, Germany, and Italy increased anywhere from 50 to 150 percent between 1969 and 1975. Many officials in these colintries now receive more compensation than their U.S. counterparts. These officials generally received pay increases at, the same time increases were given the lower paid civil servants.
Re tiremnt i8 m~~ nore financially attrac tivec than continuing
to work
The salary ceiling along with cost-of -living adjustments for iFederal retirees has provided increased incentives for eligible executives to retire. Since the last salary increase for top officials, retirees have received increases of approximately 55 percent. Another increase of .5.1 percent will be granted to retirees on Aurs 11975. Employees who retire by this date will also have the 7.3 percent increase of January 1, 1975, considered in their annuity calculations. For example, if a GS-1 8 with 30 years of service had retired in December 1974, his annual annuity after the August adjustment would be 2:3,843. If hie continues to work through July 1975, his annuity on Auguist 1, 197r-, would be $22,836. If he retires after July 1975. his'annuity would be only $2 1,724-$2,119 less than if he~ had retired in December and $1,112 less than if he had retired in July.
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Between November 1, 1974, and February 1, 1975, the retirenent rate of eligible (Governmient executives was almost 300 percent higher than the Government-wide average. The greatest number of retiring executives was in the ) to 59 age group. The greatest. number of total retirements among all employees was in age group 62 and over. The earlier retirements of (iJverninenlt executives result in added costs to the retirement fund in addition to the cost of their replacements.
At least seven former G governmentt officials now receive annuities greater than $36,000.

CHANGES IN EXISTINci LAW
In compliance with subsection 4 of rule XXIX of the Standing Rules of the Senate. changes in existing law mad(e by the bill as reported are shown as follows (existing law in which no llchamng(e i proposed is shown in roman: existing law proposed to )e omitted is enclosed in black brackets: new matter is shown in italic)

TITLE 39. U NITEI) STATES ('ODE
**
410. Application of other laws.
(a) * *
(b) The following provisions shall apply to the Postal Service:
(1) Section 55332 (public information). section 3110 (restri tiois
on employment, of relatives),. section 3033 and chapters 71
ployee policies) and 73 (suitability, security, and ot of employees), and section 3532 (dual pay) of title 5. except that 1no regulation issued under such chapters or sections shall apply to
the Postal Service unless expressly made applicable
(2) All provisions of title lS dealing with the Postal Service,
the mails, and officers or employees of the Government of the
United States:
(3) Section 107 of title 20 (known as the Randolph-SheIlard
Act. relating to vending machines operated by the blind ) :
(4) The following provisions of title 40:
(A) Sections 25a-238e (relating to condemnation procee-ings);
(B) Sections 27u0a-27ue (known as the Miller Act. relating to
performance bonds)
(C) Sections 2ta-376a-7 (known as the I)avis -Bacon Act. relating to prevailing wages) :
(I)) Section 276c (relating to wage p)ayvn nts of certain ("On
tractors) :
(E) Chapter 5 (the ('ontract Work Hour Standards At):
a ii11
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94


(F) Chapter 15 (the Government Losses in Shipment Act);
(5) The following provisions of title 41:
(A) Sections 35-45 (known as the Walsh-Healey Act, relating
to wages and hours) ; and
(B) Chapter 6 (the Service Contract Act of 1965) ; [and]
(6) Sections 2000d, 2000d-1-2000d-4 of title 42 (title VI, the
Civil Rights Act of 1946):[.]; and
(7) section 19 of the Occupational Safety and Health Act of
1970 (29 U.S.C. 668).


TITLE 5, UNITED STATES CODE


CHAPTER 53-PAY RATES AND SYSTEMS
SUBCHAPTER I-PAY COMPARABILITY SYSTEM
SEC.
5301. Policy.
5302. [Repeated.]
5303. Higher minimum rates; Presidential authority. 5304. Presidential policies and regulations. 5305. Annual pay reports and adjustments. 5306. Advisory Committee on Federal Pay. 5307. Pay fixed by administrative action. 5308. Pay limitation.
SUBCHAPTER Il-EXECUTIVE SCHEDULE PAY RATES SEC.
5311. The Executive Schedule. 5312. Positions at level 1. 5313. Positions at level II. 5314. Positions at level III. 5315. Positions at level IV. 5316. Positions at level V. 5317. Presidential authority to place positions at levels IV and V. 5318. Adjustments in rattes ot pay.

5318. Adjustments in rates of pay
Effective at the beginning of the first applicable pay period cornmencing on or af ter the first day of the month in which an adjustment takes effect under section 5305 of this title in the rates of pay under the General Schedule, the annual rate of pay for positions at each level of the Executive Schedule shall be adjusted by an amount, rounded to the nearest multiple of $100 (or if midway between multiples of $100, to the next higher multiple of $100), equal to the percentage of such annual rate of pay which corres ponds to the overall average percentage (as set forth in the report transmitted to the Congress under such section 5305) of the adjustment in the rates of pay under the General Schedule.

16