[Mr. Medlock's statement follows:]

STATEMENT OF RANDALL B. MEDLOCK

FISCAL YEAR 1995

Briefly, the fiscal year 1995 estimates that were submitted earlier to the Office of Management and Budget are reflected in the Budget to be transmitted to the Congress by the President, and are detailed in your Subcommittee Print. They total $856,405,000. This includes $777,147,000 for the House of Representatives, and $79,258,000 for certain Joint Items. The fiscal year 1995 budget is $98,652,000 more than the $757,753,000 appropriated-to-date for fiscal year 1994. The FY '95 budget estimates were prepared based on statutory entitlements, actual spending history and consultations with each office. I will insert a summary at this point showing actual FY '93 expenses, FY '94 appropriations, and FY '95 estimates. Also, I will provide a chart of the proposed budget illustrating how they are apportioned to each program and/or office.

Before we discuss each section of the budget, we need to address the effects of Public Law 103–69, Sections 307 and 308, which reduce employment levels and administrative expenses for all legislative entities.

Employee Positions Section 307 requires that the number of employee positions, on a full-time equivalent (or FTE) basis, shall be reduced by at least four percent from the FTE level as of September 30, 1992. At least ten percent of the positions eliminated shall be positions the pay of which is equal to or greater than the annual rate of basic pay for grade GS-14 of the General Schedule ($56,627).

The Director was directed to prepare a plan for achieving the necessary reductions in accordance with guidance provided by the Committee on Appropriations Report on last year's Legislative Branch Appropriations Bill. We have computed the FTE base at 11,270 FTEs and four percent of that base is 451 FTEs. We must reduce 62.5 percent by the end of FY '94 (or 282 FTEs) and the full 451 FTEs (or an additional 169 FTEs) by the end of FY '95. Preliminary discussions of the proposed plan have been held with members of the appropriate committee staffs and a proposed plan to accomplish the reductions will be provided this month to those committees and the leadership for review. The current proposed budget does not include these reductions, but we will apply them during mark-up after approval of the plan.

Administrative Expenses Section 308 directs that administrative overhead expenses be reduced each fiscal year from FY '94 through FY '97 in accordance with the definition of administrative expenses and the inflation factors that are used by the Executive Branch. It appears that the FY '94 budget reduction of three percent has been met, and the proposed FY '95 budget will meet the six percent reduction. These reductions were computed based on the procedures dictated by the Committee on Appropriations Report on the Legislative Branch Appropriations Bill, 1994. If there are no questions at this point, we will take up the first section of the budget, House Leadership Offices.

DISCUSSION ON FULL TIME EMPLOYEES

Mr. FAZIO. It is important for us to focus on a new situation we face this year. I think you probably know well what I am talking about, since we are in a zero-based approach to bringing new people on.

When we, for example, did the reprogramming for the Office of Inspector General, whom we will meet later on, we indicated in the letter of approval that was signed, and I believe Mr. Young had his opportunity to comment on this before I signed it, that we needed to make reductions in other areas in order to provide additional staff.

As you know, we are under a requirement of reducing the fulltime equivalent positions, and it is counterproductive, of course, every time we add, however well motivated the decision might be to do so.

Could you indicate to us if you have come up with any suggestions that you could pass on to us as to where we go to come up with the equivalent number of FTEs?

Mr. MEDLOCK. We have looked at that, and we had a proposal a little over a month ago. At this time, we are probably going to look toward the former Speakers of the House accounts where we anticipate that in a couple of months, there will be three spaces that will be available to use as replacements for those FTE spaces. Mr. FAZIO. Well, I just wanted to urge you to press on with that, because we really do need to come to terms, as an institution, with this requirement that we reduce our staffing. I certainly wouldn't quibble with any of the recommendations, for example, to bring in a legislative Inspector General. But in order to make progress, we are going to have to be a lot more rigorous in our imposition of these new standards on ourselves as managers.

Obviously, not everything falls under your purview, but we do not at this point have recommendations, as I understand it, as to how to live within the budget we passed last year as it relates to the reduction in FTEs. That is going to be very important as we go through our process here. I think we are going to have to struggle with that; not an enjoyable process, I might tell you.

Ron.

Mr. PACKARD. Well, in my office, we voluntarily complied with the request to reduce by, what was it, 25 percent. And we did reduce our own staff to that level. I am wondering if we are seeing a trend or if we are seeing where some offices are more of a concern than others.

Do you review each office?

Mr. MEDLOCK. We review each office, and there is a trend that some of the offices, Members' offices are not hiring up to their authorizations, let me put it that way, and we have those statistics. We can provide those.

As we provide the plan for reducing FTEs, and I am going to get to this later on, we will provide all of those statistics to this committee and to the Committee on House Administration as to how each Member's office, not necessarily specifically each Member, but how generally the offices are reducing over time. So there is support from Members in reducing their Clerk Hire accounts.

Mr. FAZIO. Are you planning to get into this in your testimony later on?

Mr. MEDLOCK. Yes, I am.

Mr. FAZIO. Maybe I can hold off. Mike, do you have a comment? Mr. HENY. We review the accounts monthly. We have seen a reduction in staff through attrition and through some of the reorganization that the Congress has done in the Committee areas. The elimination of the select committees have added to that reduction, some of the restructuring in some of the subcommittees that took place at the beginning of this Congress has reduced the levels of employment. We have seen that trend going down.

There is still a lot of work to do. We are still working on a proposal to present to the committees involved and to the House Leadership. We should have that proposal intact by the end of this month and we will forward it to you.

Mr. PACKARD. I think we would appreciate any suggestions on how we can encourage Members to do it on their own, voluntarily, rather than trying to set up some required reductions that would be enforced.

Mr. FAZIO. Well, I think the fact is, though, Ron, some people will do more than their share, others will do their share, and some

won't.

Mr. PACKARD. Well, if it all balances out where we are seeing a reduction overall, that is fine with me.

Mr. FAZIO. I think one of the things we have to admit here is that it is going to take everybody's cooperation. I don't want any element of this organization to bear an inordinate share of the burden. We have all kinds of people who work for us, some very highly skilled and highly paid, and some who are neither skilled nor highly paid. There is obviously a tendency for people to say, well, I know my people are busy, it must be those other people.

Yet, I think what we need is an approach that is fair and equitable, that involves every element of this process, all the people who work here. I think Members will be less inclined to be responsible in this area if they are immune. On the other hand, I don't think that the Members should bear an inordinate share of the burden, either, because they are not the only ones who work here.

DISCUSSION ON LOCALITY PAY

Mr. YOUNG. Mr. Chairman.

Mr. FAZIO. Yes.

Mr. YOUNG. There is something new in our hearings this year that I haven't really been involved in before that could have a serious effect on this and that is the issue of locality pay.

How is that supposed to work?

Mr. FAZIO. That is a very good question.

Mr. YOUNG. Are Members going to be given additional funding authority for locality pay, and how do you decide who is eligible for locality pay? This looks to me like a real sleeper here when it comes to expanding the size of our budget.

Mr. MEDLOCK. We put the locality pay into the budget just as sort of a stopgap, just in case someone decides that or the Members decide that locality pay might be something we ought to do. We didn't put it in there with the thought that it might ultimately happen. It is just a contingency just in case the committees decide that we need to do something. That is the only reason it is there.

We are not saying it should or should not be done. We are trying to stay away from that sort of discussion.

Mr. FAZIO. Bill, Ed tells me that some of the agencies in our purview have general authority to provide it because they are General Schedule, the Library of Congress, the GAO, and some of the management level people in the Architect's Office. But the rest of the Members and all of the other staff and people in this branch of government who are not GS schedule could make an argument that there is no difference between, say, a law enforcement officer in another Federal agency or a clerk in another Federal agency and the people we pay.

So it seems to me whether they are legally authorized or whether they are not, we have to make a judgment call that we consider fair across the board here. It is a good example of where in the executive branch this can get lost rather easily. In this branch of government, it is a huge bone in our throat and goes totally counter to what we have been trying to do in terms of cutting spending.

Mr. YOUNG. Well, the reason I question even mentioning locality pay is because it has become very inviting to any staff that came here from somewhere else, to put the pressure on the Member to give them a little extra for locality pay. The way I understand that it works, and the way it works in my office, is that the Member, within the certain limits prescribed by the Congress, can set the pay at any level he wants to for a member of the staff; isn't that correct?

Mr. HENY. That is correct.

Mr. YOUNG. I don't think the issue of locality pay even needs to be discussed because I think it opens up a great big invitation for everybody to get in line and say, "Give me locality pay."

Mr. FAZIO. Well, we may have a demonstration of the Capitol Police to bring the issue more clearly to the fore here. As well, I think Mr. Medlock said that we are going to hear every agency present their budget with that factored in, so that we consider the equity of it. But it is clearly one of the major issues we are going to have to deal with.

I would think that the gentleman I am about to yield the Chair to probably has more on the line on this issue than the rest of us, and there are some questions to put in the record at this point. Mr. Moran, take over.

[Questions from Mr. Fazio and response follow:]

Question. Have you computed what the total bill would be if locality pay were given to House staff?

Answer. The total bill for locality pay would be $32,909,000. Of which $23,888,000 is the annualization of FY '94 and $9,021,000 represents FY '95.

[CLERK'S NOTE.-On May 2, 1994, the House Finance Office amended their response as follows:]

Response. If all House staff received a locality pay adjustment effective October 1, 1994 the FY '95 pay and benefit costs would increase by an estimated $14,996,000.

Question. The House Administration Committee would have to adjust the administrative salary schedules to authorize locality pay-isn't that correct?

Answer. The Committee on House Administration would likely adjust the administrative salary schedules for locality pay if the written law deems it mandatory or automatic. However, if the written law only authorizes locality pay it then becomes discretionary and the salary schedules would likely not be adjusted.

[Questions from Mr. Young and response follow:]

Question. Have we seen any indication that Members' are adjusting staff pay in a manner comparable to the locality pay order for federal employees on the GS pay schedule?

Answer. Total payroll for the House dropped 2.2 million dollars in January 1994 from December 1993 and was lower by 1.3 million dollars from the month of November and $300,000 from the month of October. This would indicate that pay adjustments for locality pay are not being made.

Mr. MORAN of Virginia [presiding]. That is correct.

I have received a fair amount of feedback from the Capitol Police and others in the Legislative Branch, and we need to discuss it to make sure that we are fair and consistent. Although I do think that if the Members want to spend more or less, as long as it is public, that may be the way to deal with it.

Mr. YOUNG. They can do that now.

Mr. MORAN of Virginia. Yes, except that as we constrict it more, there is not as much latitude, and as Ron was suggesting, we may want to give more latitude and just give them an overall ceiling.

But if Members want to take credit for not spending as much as they are allowed, they would certainly be encouraged to do that. Ron.

FURTHER DISCUSSION ON LOCALITY PAY

Mr. PACKARD. I guess when Bill brought up the locality pay issue, I was thinking more in terms of comparing sections of the country, that is one Member's allocation versus another Member's allocation. That is what I thought we have not discussed.

In other words, on questions of office space, salaries and other items in your district may be entirely different than in Kansas or in Minnesota or in my district. I wonder if that is taken into consideration as each Member's allowance for Clerk Hire budget.

Mr. MORAN of Virginia. Maybe we ought to take that up with Chairman Rose. I think the committee deals with that, the difference in cost of living among particularly

Mr. PACKARD. It would be interesting to know how that is done. Mr. ROSE. We can talk about it now or talk about it later.

Mr. MORAN of Virginia. We can bring Chairman Rose up right now. Is that okay?

Mr. ROSE. Well, there are several things that I would like to

INTRODUCE WITNESSES

Mr. MORAN of Virginia. Chairman Rose, we want to not only introduce you formally for the record as the Chairman of the Committee on House Administration, but also Mr. Terry Nugent, who is the new Director of House Information Systems. So we welcome you to the committee. The House Information Systems is presenting its own information to the committee this year.

Chairman Rose, do you want to give us an overview to set the stage and then we can get into the specifics.

FY '94 AVAILABLE FUNDS

Mr. ROSE. Thank you, Mr. Chairman. I have a few points I want to make, and then I would like to have Terry Nugent, the Director of House Information Systems, to provide additional details following which I will conclude my comments regarding HIS.

First, fiscal year 1994 is turning out to be financially even rougher than expected for HIS. The combined appropriation amount was cut by $1.5 million, an amount which HIS has made plans to work with. I say the combined amount because, last year, we took the money HIS once received as reimbursements from House support offices and directly allocated it to HIS.

We might ask Mr. Nugent to talk about some of the billing that he actually has submitted to the Clerk through General Wishart that actually was paid. I think some 600 to $800,000 was not actually recovered that had been recovered in previous years. But what also happened was that HIS's other paying customers have reduced their computer usage.

This reduction will cost HIS another $1.5 million this year and a similar amount in fiscal year 1995. The net result is that funds available to HIS in fiscal year 1994 have been reduced by $3 million, double the reduction decided by this committee last year.