103D CONGRESS SENATE REPORT 103-223 FEDERAL WORKFORCE RESTRUCTURING ACT OF 1993 FEBRUARY 4 (legislative day, JANUARY 25), 1994.-Ordered to be printed Mr. GLENN, from the Committee on Governmental Affairs, REPORT [To accompany S. 1535] The Committee on Governmental Affairs, to which was referred The purpose of S. 1535 is to eliminate narrow restrictions on em- ployee training and to provide a temporary voluntary separation in- In recent years, 79 Fortune 100 companies have offered their em- modeled after a separation incentive program recently implemented by the Department of Defense (DOD). Through the incentive program, DOD has reduced its civilian workforce by nearly 70,000 people with only 3,000 forced separations, that is 3,000 Reductions-in-Force (RIFs). The legislation is an initiative of the Vice President's National Performance Review (NPR). One central goal of NPR is government-wide downsizing and retraining of the existing workforce. In developing its initiatives, the NPR examined employment and management trends in state and local governments, other countries and the private sector. III. LEGISLATIVE HISTORY S. 1535, the Federal Workforce Restructuring Act of 1993, was introduced on October 7, 1993 by Senator John Glenn. Cosponsoring the bill with Senator Glenn were Senator David Pryor and Senator Ted Stevens. Under S. 1535, agencies could employ voluntary separation incentive payments to encourage employees to resign or retire from federal service. S. 1535 would allow agencies to offer targeted separation incentives early retirement or financial payments or bothto selected groups of employees. The financial payments would be the lesser of $25,000 or the amount an employee would be paid in severance pay if his or her job was being abolished. An agency head could designate components of his or her agency, particular locations or offices, and/or particular job grades or occupations where separation incentives would be offered. In addition, S.1535 would reform current law on the training of federal employees. On October 19, 1993, the Committee on Governmental Affairs held a hearing on S. 1535. The witnesses at the hearing included: James B. King, Director, Office of Personnel Management; Philip Lader, Deputy Director for Management, Office of Management and Budget; Edwin Dorn, Assistant Secretary for Personnel and Readiness, Department of Defense. The Committee marked up S. 1535 on November 9, 1993. Six amendments were offered and accepted to the bill. The first amendment, which was jointly offered by Senator Stevens and Pryor, included the text of S. 1624, a bill to standardize the withdrawal options available to participants in the Thrift Savings Plan (TSP). Under the amendment, all participants in TSP would have the same options whether they retired or separated from government service. These options include (1) leaving their money in the plan where they can continue to earn (but cannot continue to contribute), (2) have their account balance transferred to an Independent Retirement Account (IRA) or other eligible retirement plan, (3) have TSP purchase an annuity for them, or (4) withdraw the funds subject to the automatic 20 percent tax withholding. This amendment passed by voice vote. Senator Stevens offered the second amendment which would allow the Alaska Railroad Corporation (AARC), which still has employees under the Civil Service Retirement System, to participate in the incentive program. The language would amend the Alaska Railroad Transfer Act of 1982 to include the ARRC under the provisions of S. 1535 and allow the head of ARRC to waive repayment. The bill would also provide those employees who remained in the CSRS with 20 or more years of combined civil service and ARRC service with Federal Employees Health Benefits Program (FEHBP) coverage into retirement. Previously, these employees were required to have 26 years of combined service. This amendment passed by voice vote. Senator Stevens then offered a third amendment, which would ensure that, by September 30, 1995, employment in the Executive Branch would be reduced by at least one full-time equivalent (FTE) for each voluntary separation incentive payment paid under S. 1535. Senator Pryor offered a second-degree amendment to this third Stevens amendment to prohibit the President from contracting out for work that was performed by employees who left under the separation incentive program unless a cost comparison could demonstrate that such a contract was to the financial advantage of the federal government. This amendment, with the second degree amendment, passed by voice vote. Senator Glenn offered a conforming amendment to the bill to require that a 5-year period go by before an employee of the Department of Defense or Central Intelligence Agency (taking an incentive payment) could be rehired by government without paying back the incentive payment. S. 1535 already required this payback by employees in other federal agencies. This amendment was accepted by voice vote. Finally, Senator Roth offered an amendment to require an overall government cap on Full-Time Equivalent (FTE) levels in each of the next six years to reduce employment by 252,000. Senator Roth's amendment specified the levels in Fiscal Years (FY) 1994 and 1995 which were also specified in President Clinton's FY 1994 budget. The remaining FTE cuts needed to reach 252,000 would be allocated evenly among FY 1996 through FY 1999. The amendment also required the Office of Management and Budget to reduce_the discretionary spending limits set for in section 601(a)(2) of the Congressional Budget Act for Fiscal Years 1994_through_1998. The amendment passed in a rollcall vote by 7 to 5. Senators Roth, Cochran, and Lieberman voted for the amendment, with Senators Stevens, Cohen, McCain, and Bennett joining by proxy. Voting against the amendment were Senators Glenn, Pryor, Akaka, and Dorgan, with Senator Sasser joining by proxy. The Committee on Governmental Affairs reported out S. 1535 by a vote of 11-0. Voting for the bill were Senators Glenn, Levin, Pryor, Lieberman, Dorgan, Roth, Stevens, Cohen, Cochran, and Bennett. No senators voted against the bill. The House Committee on Post Office and Civil Service has twice reported similar legislation. On October 22, 1993, the Committee reported H.R. 3345 by a vote of 17 to 2. On November 10, the Committee ordered reported a program of separation incentives as part of H.R. 3400. IV. AGENCY VIEWS James B. King, Director of the Office of Personnel Management, testified before the Committee that the legislation was needed to retrain federal civilian employees and to achieve personnel reductions. Philip lader, Deputy Director for Management, Office of Management and Budget, testified before the Committee that voluntary separation incentives and retraining was needed to minimize the need for employee layoffs. V. SECTION-BY-SECTION ANALYSIS Section 1 designates the Act as the "Federal Workforce Restructuring Act of 1993." Section 2 contains the various amendments to chapter 41 of title 5, United States Code, designed to remove unnecessary and narrow restrictions on employee training. Subsection (a)(1) of section 2 amends the definition of "training" in section 4104(4) by removing the limitation on training to fields which are directly related to the performance by the employee of official duties for the Government and permits instead the extension to fields which will improve individual and organizational performance and assist in achieving the agency's mission and performance goals. Subsection (a)(2) of section 2 amends section 4103 in subsection (a) to eliminate increasing economy and efficiency in agency operations and raising the standards of performance by employees to the maximum possible level as the reasons for establishing training programs and substitutes instead achieving an agency's mission and performance goals by improving employee and organizational performance as the basis for training program establishment. It also amends subsection (b) to expand the authority in paragraph (1) to train an employee for placement in another agency. This is accomplished by permitting such training if the agency head determines that it would be in the interests of the Government rather than requiring a determination that the employee, if separated, would be entitled to severance pay. In addition, paragraph (2) is repealed, thus eliminating the requirement that an agency obtain from the Office of Personnel Management a verification that placement in another agency may be reasonably expected. Paragraph (3) is then redesignated as paragraph (2) and is amended, in subparagraph (C), to provide that the final criterion to be considered in selecting an employee for this training is the benefits to the Government from the training itself rather than from retaining the employee in the Federal service. Subsection (a)(3) of section 2 amends section 4105 by repealing subsections (b) and (c) which impose additional and unnecessary burdens on agencies in their efforts to provide training through nongovernment facilities. Subsection (a)(4) of section 2 repeals section 4106 which limits the amount of training that may be provided through non-Government facilities. Subsection (a)(5) of section 2 eliminates unnecessary restrictions on providing training through non-Government facilities for Federal employees by repealing subsections (a) and (b), by making conforming changes in subsections (c) and (d), which are redesignated as subsections (a) and (b), respectively, and by amending the catchline to retitle the section, "Restriction on degree training." Subsection (a)(6) of section 2 amends section 4108(a) governing employee agreements for service after training by eliminating the restriction to training provided by, in, or through a non-Govern ment facility, and instead requiring an agreement whenever training is for more than a minimum period prescribed by the head of the agency. Subsection (a)(7) of section 2 amends section 4113(b) to eliminate the statutory specification for the contents of agency reports on training, leaving the form of such reports to be prescribed by the Office of Personnel Management. Subsection (a)(8) of section 2 repeals section 4114 which requires the Office of Personnel Management to review the provision by agencies of training for their employees through non-Government facilities. Subsection (a)(9) of section 2 amends section 4118 governing regulations by removing the reference to training in non-Government facilities from subsection (a)(7), by repealing subsection (b) relating to regulations concerning training of employees in non-Government facilities, and by redesignating subsections (c) and (d) as subsections (b) and (c), respectively. Subsection (b) of section 2 makes conforming changes in the analysis of chapter 41. Subsection (c) of section 2 provides that the amendments made by that section are effective on the date of enactment of the Act. Section 3 provides authority for Executive Branch agencies to pay voluntary separation incentives to employees who resign or retire. Subsection (a) of section 3 includes the definitions to be used for the purpose of the section. In paragraph (1), "agency" is defined as an Executive agency, as defined in section 105 of title 5, United States Code, but does not include the Department of Defense, the Central Intelligence Agency, or the General Accounting Office. In paragraph (2), "employee" is defined as an employee, as defined in section 2105 of title 5, United States Code, of any agency, who is serving under an appointment without time limitation and who has been currently employed for a continuous period of at least 12 months. Included is an individual employed by a county committee established under section 590h(b) of title 16, United States Code, but not a reemployed annuitant under the Civil Service Retirement System, the Federal Employees' Retirement System, or another retirement system for Government employees, or an employee who has a disability sufficient to confer eligibility for disability retirement. Subsection (b) of section 3 provides the basic parameters governing the voluntary separation incentive program. Paragraph (1) authorizes the head of an agency, in order to assist in the restructuring of the Federal workforce while minimizing involuntary separations, to pay voluntary separation incentives to employees in any component of the agency, in any occupation, in any geographic location, or in any combination thereof. In exchange, the employees must agree to resign or retire during the continuous 90-day period designated by the agency head for the agency or component. That period may not begin before the date of enactment of the Act or end later than September 30, 1994. Paragraph (2) provides that, in order to ensure the performance of the agency's mission, the agency head may make exceptions to the requirement of separation by the last day of the 90-day period, and grant voluntary separation in |