Sen. Fred Thompson, R-Tenn., introduced legislation Thursday that would increase the pay limit for senior executives and give agencies more flexibility to design pay and personnel systems. The Bush administration's Freedom to Manage
initiative contains proposals that would raise the cap on total compensation for members of the Senior Executive Service and other top civil servants, allow federal managers to offer more buyouts to employees and enable agencies to design alternative pay and personnel systems. President Bush sent the management reform package to the Senate on Oct. 15. "The President's package of management reform proposals will allow government managers to carry out their critical responsibilities for the American public more effectively," said Thompson, who is the ranking member of the Senate Governmental Affairs Committee. The Freedom to Manage package contains two legislative proposals: the Freedom to Manage Act (S.1613), which would force Congress to remove barriers to sound management, and the Managerial Flexibility Act (S. 1612), which gives managers more flexibility recruiting and retaining employees. Under the legislation, the pay cap on total compensation for members of the SES would be raised from the pay rate for Cabinet secretaries to the pay rate of the vice president. This year, Cabinet secretaries earn $161,200 and the vice president makes $186,300. The legislation does not include provisions that would lift caps on basic salaries and base-plus-locality pay for SESers. Bobby Harnage, president of the American Federation of Government Employees and Colleen Kelley, president of the National Treasury Employees Union, have both criticized the Managerial Flexibility Act, calling it a boon for senior executives
that does nothing for the rest of the federal workforce. In addition to raising the pay limit on total compensation for senior executives, the Freedom to Manage package would also allow SESers to automatically accrue up to 26 vacation days per year. While most government executives already accrue that much time, executives hired from outside government are treated like entry-level employees and accrue only four hours per pay period. The bill also gives agencies more freedom from Title V and more flexibility to offer employees early retirement incentives and permanent buy-out authority. Title V contains the General Schedule pay system and other personnel regulations that govern most of the federal workforce. To attract more federal employees, the proposed legislation would allow agencies to offer bigger recruitment bonuses to help fill much-needed jobs. While retention and recruitment bonuses would still be capped at 25 percent of an employee's annual rate of basic pay, agencies could offer these bonuses based on how long an employee agrees to work for the agency. For example, if a new hire signed on for four years, he could get a hiring bonus of up to 25 percent of his four-year salary.