Federal Employee Compensation: An Update

Full House Committee on Oversight and Government Reform
Full House Committee on Oversight and Government Reform
Hearing Date: May 18, 2017 9:00 am 2154 RHOB

TAKEAWAYS:

  • An April Congressional Budget Office (CBO) report found federal employees earn 17 percent more than comparable private sector employees.
  • Most federal employees receive compensation through the outdated General Schedule compensation system that inhibits the government’s ability to reward performance over tenure.
  • The pay schedule also prevents the federal government from attracting top talent in high-demand areas, such as cybersecurity. 
  • Small adjustments to federal employee’s defined benefit compensation plans could save taxpayers $207 billion over ten years.

PURPOSE:

  • To discuss the recent CBO report comparing federal compensation to that of the private sector.
  • To identify potential areas for improvement and modernization in the current federal compensation system.
BACKGROUND:
  • In April, CBO released a report that found federal employees earn 17 percent more than comparable private sector employees in total compensation, with wide variances depending on education.
  • The retirement benefits available to most federal employees are an important factor contributing to the compensation differences.
  • Entities such as the Heritage Foundation and the Government Accountability Office have offered reform proposals to make federal compensation more performance-oriented, affordable and sustainable.

KEY VIDEOS:

Chairman Jim Jordan (R-OH): “If you’ve got 99.9 percent of the workforce getting an ‘A’, I think our constituents want to know why they have to wait 8 weeks to get their passport, or why when they call the IRS only 30 percent ever got to talk to an actual person . . . you would think the taxpayers would get a little better treatment than they do.”

Rep. Jody Hice (R-GA): “If you can’t fire someone . . . or if you make it so difficult that it literally is an act of Congress to fire someone, that’s pretty significant job security. Besides lengthening the probationary period, what else can be done to address [the difficulty of firing bad actors]?”

Rep. Darrell Issa (R-CA): “We do need to motivate the federal workforce . . . it’s not their problem if they’re compensated at the rate that statistics show might not be the same – they came to work, they took the schedule, and they performed the jobs.”

Witnesses and testimonies

Name Title Organization Panel Document
Mr. Joseph Kile Assistant Director for Microeconomic Studies Congressional Budget Office Document
Mr. Andrew Biggs Resident Scholar American Enterprise Institute Document
Ms. Rachel Greszler Research Fellow in Economics, Budget and Entitlements The Heritage Foundation Document
Mr. Robert Goldenkoff Director of Strategic Issues U.S. Government Accountability Office Document
Jacqueline Simon Policy Director American Federation of Government Employees, AFL-CIO Document