B-199522 L/M, JUL 22, 1980

B-199522 L/M, JUL 22, 1980

PRECIS-UNAVAILABLE

ABRAHAM A. RIBICOFF, SENATE COMMITTEE ON GOVERNMENTAL AFFAIRS:

THIS IS IN RESPONSE TO YOUR LETTER OF JUNE 26, 1980, REQUESTING OUR VIEWS ON BILL S. 2313, "TO AMEND SECTION 225 OF THE FEDERAL SALARY ACT OF 1967, AS AMENDED." THE BILL PROVIDES FOR THE ESTABLISHMENT OF THE COMMISSION ON EXECUTIVE, LEGISLATIVE, AND JUDICIAL SALARIES (THE QUADRENNIAL COMMISSION) ON JULY 1 OF EVERY FOURTH FISCAL YEAR. THE GENERAL ACCOUNTING OFFICE STRONGLY SUPPORTS THE BILL.

UNDER SECTION 225 OF THE FEDERAL SALARY ACT OF 1967, A QUADRENNIAL COMMISSION IS APPOINTED EVERY FOURTH FISCAL YEAR TO REVIEW THE SALARY RATES FOR TOP OFFICIALS IN THE EXECUTIVE, LEGISLATIVE, AND JUDICIAL BRANCHES OF THE GOVERNMENT AND RECOMMEND APPROPRIATE CHANGES IN THESE SALARY RATES TO THE PRESIDENT. AFTER REVIEWING THE RECOMMENDATIONS OF THE QUADRENNIAL COMMISSION, THE PRESIDENT TRANSMITS TO CONGRESS WITH HIS BUDGET MESSAGE HIS OWN RECOMMENDATIONS ON NEW SALARY RATES. THE RATES RECOMMENDED BY THE PRESIDENT BECOME EFFECTIVE UPON APPROVAL BY BOTH HOUSES OF THE CONGRESS.

THE TERMS OF OFFICE FOR THE COMMISSION MEMBERS UNDER SECTION 225 ARE FOR THE PERIOD OF THE FISCAL YEAR (2 U.S.C. SEC. 352 (3)). WHEN THIS SALARY ADJUSTMENT MECHANISM WAS ESTABLISHED IN 1967, THE GOVERNMENT'S FISCAL YEAR BEGAN ON JULY 1 OF EACH YEAR, AND THE QUADRENNIAL COMMISSION HAD NEARLY 6 MONTHS IN WHICH TO REVIEW SALARY RATES AND PREPARE ITS RECOMMENDATIONS TO THE PRESIDENT FOR HIS CONSIDERATION IN PREPARING HIS JANUARY BUDGET MESSAGE. HOWEVER, IN 1976 THE GOVERNMENT'S FISCAL YEAR WAS CHANGED TO BEGIN ON OCTOBER 1 INSTEAD OF JULY 1. HENCE, IN 1977, THE TERMS OF OFFICE BEGAN ON OCTOBER 1. THE EFFECT OF THIS CHANGE HAS BEEN TO SHORTEN THE PERIOD DURING WHICH THE QUADRENNIAL COMMISSION MUST DO ITS WORK FROM NEARLY 6 MONTHS TO LESS THAN 3 MONTHS. THE MOST RECENT QUADRENNIAL COMMISSION, IN FISCAL YEAR 1977, MANAGED BY A GREAT EFFORT TO COMPLETE ITS REPORT TO THE PRESIDENT WITHIN THIS VERY BRIEF PERIOD, BUT THIS LENGTH OF TIME IS CLEARLY INADEQUATE FOR THE COMPLETION OF SO MAJOR A TASK.

WE BELIEVE THIS CHANGE IS NECESSARY TO INSURE THAT FUTURE QUADRENNIAL COMMISSIONS WILL HAVE SUFFICIENT TIME TO THOROUGHLY REVIEW THE NEED FOR CHANGES IN THE PAY RATES FOR TOP GOVERNMENT OFFICIALS. THE QUADRENNIAL COMMISSION PLAYS AN IMPORTANT ROLE IN ANALYZING FEDERAL EXECUTIVE PAY PROBLEMS AND DEVELOPING SOLUTIONS TO CORRECT THEM. THE LACK OF ADEQUATE TIME TO COMPLETE ITS WORK COULD PLACE SEVERE RESTRICTIONS ON THE QUADRENNIAL COMMISSION'S ABILITY TO FULFILL ITS MISSION.

WE HAVE ISSUED A NUMBER OF REPORTS ON THE INADEQUATE SALARY LEVELS, IRREGULAR PAY ADJUSTMENTS, AND DISTORTED PAY RELATIONSHIPS OF TOP GOVERNMENT EXECUTIVES. IN OUR LATEST REPORT "ANNUAL ADJUSTMENTS - THE KEY TO FEDERAL EXECUTIVE PAY" (FPCD-79-31, MAY 17, 1979), WE POINTED OUT THAT IT IS ESSENTIAL THAT EXECUTIVES RECEIVE ANNUAL SALARY ADJUSTMENTS IF

- PROBLEMS RESULTING FROM DECLINING REAL SALARIES ARE TO BE ALLEVIATED,

- CONGRESSIONAL MANDATES FOR COMPARABILITY AND PAY ADJUSTMENTS ARE TO BE REALIZED, AND

- AGENCIES' RECRUITMENT AND RETENTION PROSPECTS ARE TO IMPROVE.

WE BELIEVE THE QUADRENNIAL COMMISSION SHOULD HAVE SUFFICIENT TIME TO THOUGHTFULLY CONSIDER THESE AND OTHER EXECUTIVE PAY PROBLEMS AND ARRIVE AT MEANINGFUL RECOMMENDATIONS FOR THEIR RESOLUTION.

ACCORDINGLY, WE STRONGLY RECOMMEND THAT THE CONGRESS ENACT S. 2313.