Senior executives warn of impending pay crisis

Senior executives would receive better annual compensation increases if they retired, leaders of the Senior Executives Association told their members at a town hall meeting on Capitol Hill Thursday.

SEA President Carol Bonosaro used charts to show that the average cost-of-living adjustment for retirees during the past eight years-2.5 percent-has been more than twice the average Senior Executive Service pay increase over the same period. This disparity makes leaving the government more attractive than staying, she said.

"Everyone clearly recognizes the problem, but there's been no solution," Bonosaro said. "Pay compression has reached a place where the SES is going to be damaged, if not mutilated," SEA Counsel Jerry Shaw added.

SES members administer programs at the top levels of the federal government. Positions are primarily managerial and supervisory and candidates must undergo a rigorous selection process. Annual SES pay increases are computed using the same formula used for civil service employees' annual increases: an across-the-board increase based on increases in the Labor Department's Employment Cost Index, along with locality pay increases.

However, unlike civil service employees, SES salaries have a statutory pay cap because their compensation is linked to congressional and Cabinet-level salaries. According to law, senior executives can't make more than Level III of the Executive Schedule, which was $133,700 in 2001 and is $138,200 in 2002. The Executive Schedule determines congressional and Cabinet-level salaries. This year, every federal executive at the top three levels of the SES will make $138,200.

"The figure 70 percent is one we want to keep in mind," Rep. Jim Moran, D-Va., told the group. "Seventy percent of the SES is eligible to retire in the next five years; 70 percent are receiving the same pay. No business would do that to its employees."

Several members of Congress addressed the group, including Rep. Tom Davis, R-Va., whose bill, H.R. 1824, seeks to raise the pay cap on senior executives' base pay, allowing executives to get full raises over at least the next few years, even if Congress doesn't allow the pay of political appointees to rise. Sen. John Warner, R-Va., who introduced a similar bill last year, also addressed the group.

"To have your pay compared to a member of Congress or a senator is wrong," Davis said. "It was the wrong way to go, you have just fallen farther and farther behind. But the government still doesn't get it."

Rep. Frank Wolf, R-Va., told senior executives to encourage their Cabinet chiefs to advocate on their behalf with Office of Management and Budget Director Mitch Daniels.

"Ideally, you want something like this put into the budget," Wolf said. "This ought to be in the president's budget when it comes up."