Need for Pay Adjustments for Top Officials in the Federal Government

Pay adjustments that were to be provided to Members of Congress, Federal judges, and top Federal executives continue to be reduced or denied. This has resulted in recruitment and retention problems for some agencies and in compressed pay rates for high level Government employees and Senior Executive Service employees. As a result, Federal executives have little incentive to accept promotions with added responsibility but no increase in pay. Many Federal executives have chosen to retire rather than to continue to work at frozen pay levels. The incentive to retire is intensified by the generous cost-of-living adjustments that retirees receive. The number of executive retirements has risen drastically in recent months. Many of these individuals were division or department heads or regional commissioners. Many accepted higher paying jobs outside the Government. Encouraging executives who are eligible to retire to remain in service by increasing their salaries may result in a cost savings to the Government. A major factor causing the pay problem is the informal link between congressional, Federal executives, and judges' salaries. This also limits the ceiling on General Schedule pay, compromising legislative mandates for pay comparability and pay distinctions. There is no need to continue this link. Some of the pay problems result from the present economic conditions and high inflation, but other countries who are experiencing high inflation have been able to maintain separate pay adjustments for their civil servants and legislators. Congress should allow annual pay adjustments to take effect as the law provides. The compensation system for the Senior Executive Service (SES) was severely limited by Congress. Virtually all SES members are at the pay ceiling despite major differences in their responsibilities. Congress and the Office of Personnel Management have reduced the number of career positions that could receive bonuses to 20 percent. Limiting performance awards could seriously affect these employees' morale and stifle the incentive for excellence and for seeking positions of greater authority and responsibility. To maintain pay distinctions and work distinctions, sizeable salary adjustments for top Federal officials should be effected. The Administration might consider changing the ceiling on the General Schedule in conjunction with executive pay increases.