01 Governance

URGENT BUSINESS FOR AMERICA
REVITALIZING THE FEDERAL GOVERNMENT

FOR THE 21ST CENTURY
REPORT OF
THE NATIONAL COMMISSION
ON THE PUBLIC SERVICE
JANUARY 2003
PREFACE
Fifty years have passed since the last comprehensive reorganization of the federal government. The
changes proposed by The Hoover Commission served the nation well as it adapted to the mid-20th
century world. It was a world transformed by World War II and the new responsibilities of the
United States government at home and abroad.
It was also a world in which television was still a curiosity, transportation without jets was slow and
expensive, typewriters were still manual, and Xerox machines, personal computers, microchips, and
the Internet were unknown and beyond imagination.
Medicare and Medicaid did not exist. There were no nuclear power plants and no national high-
way system. The government organization table contained no EPA, OSHA, NIH, or dozens of
other now familiar institutions.
The relationship of the federal government to the citizens it serves became vastly broader and
deeper with each passing decade. Social programs are by far the largest component of a federal
budget that now amounts to over one-fifth of the gross national product. National security and
foreign policy issues, the environment, protection of human rights, health care, the economy, and
questions of financial regulation dominate most of the national agenda.
Something less tangible, but alarming, has also happened over the last 50 years. Trust in govern-
ment — strong after World War II, with the United States assuming international leadership and
meeting domestic challenges — has eroded. Government’s responsiveness, its efficiency, and too
often its honesty are broadly challenged as we enter a new century. The bonds between our citi-
zens and our public servants, essential to democratic government, are frayed even as the responsi-
bilities of government at home and abroad have increased. Government work ought to be a
respected source of pride. All too frequently it is not.
The members of this Commission — Republicans, Democrats, and independents — have joined in
a common conviction. The time has come to bring government into the 21st century. We take as
a given the Constitutional division of authority among the Legislature, the Judiciary, and the
Executive. Our proposals mainly concern the organization of the administrative side, but there are
implications for the Congress and for the effectiveness of our courts.
We are a small group, with limited resources. But beyond our own combined experience in gov-
ernment, we have been able to draw upon an enormous amount of research and professional analy-
sis in conducting our work. That evidence points unambiguously toward certain conclusions:
T H E N AT I O N A L C O M M I S S I O N O N T H E P U B L I C S E R V I C E iii
■ Organization: A clear sense of policy direction and clarity of mission is too often lacking, under-
cutting efficiency and public confidence. As a result, there is real danger of healthy public skep-
ticism giving way to corrosive cynicism.
■ Leadership: Too many of our most competent career executives and judges are retiring or leav-
ing early. Too few of our most talented citizens are seeking careers in government or accepting
political or judicial appointments.
■ Operations: The federal government is not performing nearly as well as it can or should. The
difficulties federal workers encounter in just getting their jobs done has led to discouragement
and low morale.
Disciplined policy direction, operational flexibility, and clear and high performance standards are
the guiding objectives of our proposals. Our report calls for sweeping changes in organizational
structure and personnel incentives and practices. Clarification and consolidation of responsibility
for policymaking executives, combined with greater delegation of operational functions to agency
managers, should be the hallmark of progress. Implementation and effective oversight will require
clear-sighted action by the President, the Cabinet, and the Congress.
I have great appreciation for the men and women who agreed to give their attention and knowl-
edge to the mission of this commission. They are people of all political persuasions who have time
and again demonstrated their commitment to excellence in government. They came together in
the wake of 9/11/01 with a common desire to help our government meet the critical challenges of
this new century.
Most of all, the support of a concerned public for bold change is critical. Only then will we be able
to rebuild trust in government.
It is our belief that these are matters of consequence to all who are interested in government and
its performance.
The members of the Commission commend the report to the attention of the American public and
our elected and appointed leaders.
Paul A. Volcker
iv UR GENT BUSINESS FOR A MERICA

THE NATIONAL COMMISSION ON THE PUBLIC SERVICE
CHAIRMAN Committee on Intelligence. He was a key

leader in the development and passage of the
Paul A. Volcker 1986 Tax Reform Act. A Democratic candidate
Paul Volcker served in the federal government for President in 2000, Senator Bradley is a former
for almost thirty years during five presidential Chairman of the National Civic League and is
administrations. Appointed as Chairman of the currently a managing director of Allen & Co., Inc.
Board of Governors of the Federal Reserve
System by President Jimmy Carter in 1979, he Frank C. Carlucci
was re-appointed by President Ronald Reagan Frank C. Carlucci served as Secretary of
in 1983. After leaving the Federal Reserve in Defense under President Ronald Reagan from
1987, he became Professor of International November 1987 to January 1989, during which
Economic Policy (now emeritus) at Princeton time he oversaw the Defense Secretary’s
University and served as Chairman of the firm of Commission on Base Realignment and Closure.
James D. Wolfensohn & Co. until his retirement Secretary Carlucci also served as Assistant to
in 1996. He currently works with a number of the President for National Security Affairs
institutions concerned with both domestic and under President Reagan. Currently Chairman of
international affairs. As Chairman of the first the Carlyle Group, Secretary Carlucci has
National Commission on the Public Service (“The amassed more than 25 years of government
Volcker Commission”) in 1988, he established service within the Departments of Defense and
himself as one of the nation’s strongest advocates of Health, Education and Welfare; the Central
for the revitalization of the public service. Intelligence Agency; the Office of Management
and Budget; and the Foreign Service.
MEMBERS
Kenneth M. Duberstein
Charles Bowsher Kenneth M. Duberstein served as President
Appointed Comptroller General of the United Reagan’s Chief of Staff in 1988 and 1989, fol-
States by President Ronald Reagan in 1981, lowing his previous service as Deputy Chief of
Charles Bowsher led the General Accounting Staff and in other senior positions in the Reagan
Office (GAO) for fifteen years. For the 25 years Administration. He serves on the boards of sev-
prior to his appointment, he was associated with eral corporate and nonprofit organizations,
Arthur Andersen & Co., except for a four-year including the Boeing Company, Fannie Mae,
period between 1967 and 1971 when he served Kennedy Center for the Performing Arts Vice
as Assistant Secretary of the Navy for Financial Chairman, the Council on Foreign Relations,
Management. He currently serves on a number the Brookings Institution, and others. He is cur-
of corporate boards. rently Chairman and Chief Executive Officer of
the Duberstein Group.
Bill Bradley
Bill Bradley represented New Jersey in the Constance Horner
United States Senate from 1979 to 1997. Constance Horner served as Assistant to the
Senator Bradley held seats on the Finance President and Director of Presidential Personnel
Committee and the Energy and Natural for President George H. W. Bush. During the
Resources Committee and also served on the Reagan Administration, she headed the Office
Special Committee on Aging and the Select of Personnel Management, which oversees the
T H E N AT I O N A L C O M M I S S I O N O N T H E P U B L I C S E R V I C E v
federal civilian workforce. Her government Clinton Administration, Secretary Rubin served
experience also includes service as Deputy as Co-Chairman of Goldman Sachs & Co.
Secretary of the Department of Health and Secretary Rubin is currently Chairman of the
Human Services and Associate Director of the Executive Committee and Member of the
Office of Management and Budget. She is cur- Office of Chairman of Citigroup.
rently a Guest Scholar in Governance Studies at
the Brookings Institution and serves on several Donna E. Shalala
foundation and corporate boards of directors. Donna E. Shalala served as Secretary of Health
and Human Services in the Clinton
Franklin D. Raines Administration from 1993 to 2001. Prior to
From 1996 to 1998, Franklin D. Raines served as joining the Clinton Administration, Secretary
the Director of the Office of Management and Shalala served as Chancellor of the University of
Budget for President Bill Clinton. He previous- Wisconsin-Madison. She has taught political
ly served as Assistant Director of the Domestic science at Columbia, the City University of
Policy staff and Associate Director of OMB in New York, and the University of Wisconsin-
the Carter Administration. Prior to joining Madison. In the Carter Administration, she
Fannie Mae in 1991 he was a general partner served as Assistant Secretary for Policy
with Lazard Freres & Co. He is currently Development and Research, U.S. Department of
Chairman and Chief Executive Officer of Fannie Housing and Urban Development. She is cur-
Mae and serves on several corporate boards. rently a Professor of Political Science and the
President of the University of Miami. Secretary
Richard Ravitch Shalala was a Commissioner on the first
Richard Ravitch is the Co-Chair of the biparti- National Commission on the Public Service.
san Millennial Housing Commission, a congres-
sionally charted organization examining the sta- Vin Weber
tus of affordable housing in the United States. Vin Weber represented Minnesota’s Second
He was appointed to the United States Congressional District in the United States
Commission on Urban Problems by President House of Representatives from 1980 to 1992.
Lyndon Johnson in 1966. In 1975 he became During that time, Representative Weber was a
Chairman of the nearly bankrupt New York member of the Appropriations Committee and an
State Urban Development Corporation at the elected member of the House Republican leader-
request of Governor Hugh Carey. After restor- ship. Representative Weber is a Co-Director of
ing the corporation to solvency, Ravitch served Empower America, Chairman of the National
as Chair of the New York Metropolitan Endowment for Democracy, and a Senior Fellow
Transportation Authority for five years. He is at the Humphrey Institute of Public Affairs at the
currently a principal in Ravitch, Rice & Co. University of Minnesota. Representative Weber
is also a managing partner of Clark & Weinstock.
Robert E. Rubin
Robert E. Rubin served as the 70th Secretary of EX-OFFICIO MEMBERS
the United States Treasury from January 1995
to July 1999. Prior to joining the Treasury, Bruce Laingen
Secretary Rubin served as Assistant to the Bruce Laingen served as the Executive Director
President for Economic Policy in the Clinton of the first National Commission on the Public
Administration and directed the National Service. He was a member of the U.S. Foreign
Economic Council. Before he joined the Service from 1949 to 1987. Laingen served as
vi UR GENT BUSINESS FOR A MERICA

U.S. Ambassador to Malta from 1977 to 1979 and the RAND Graduate School. His research
and as chargé d’affaires of the American embassy interests include technological change, in par-
in Iran in 1979. Ambassador Laingen is current- ticular its effects on displaced employees and
ly the President of the American Academy of military manpower, with primary focus on the
Diplomacy and serves on the boards of the principal-agent problems associated with the
Presidential Classroom for Young Americans and management of army recruiting personnel.
the National Defense University Foundation.
Paul C. Light
Strobe Talbott Paul C. Light served as Senior Advisor to the
Strobe Talbott assumed the presidency of the first National Commission on the Public
Brookings Institution in July 2002 after a career Service. He is the Founding Director of the
in journalism, government, and academe. His Brookings Institution Center for Public Service
immediate previous post was Founding Director and also the Paulette Goddard Professor of
of the Yale School for the Study of Public Service at New York University. He was
Globalization. Talbott served in the State previously Director of the Public Policy
Department from 1993 to 2001, first as ambas- Program of the Pew Charitable Trusts.
sador-at-large and special adviser to the
Secretary of State for the new independent G. Calvin Mackenzie
states of the former Soviet Union, then as G. Calvin Mackenzie is a Visiting Fellow at the
Deputy Secretary of State for seven years. Brookings Institution and holds an endowed
Talbott entered government after twenty-one chair as the Goldfarb Family Distinguished
years with Time magazine. Professor of Government at Colby College. As a
Senior Research Analyst for the U.S. House
EXECUTIVE DIRECTOR Commission on Administrative Review, he was
the principal author of its analyses of administra-
Hannah S. Sistare tive operations in the House of Representatives.
Hannah S. Sistare was Staff Director and
Counsel to the U.S. Senate Governmental COMMISSION STAFF
Affairs Committee for U.S. Senator Fred
Thompson from 1995 to 2002. She has held Amber B. Brooks, Research and Editing
positions within the Departments of Health and Consultant
Human Services and Labor and has taught at William C. Fanaras, Research Assistant
George Washington University and American Rosslyn S. Kleeman, Senior Consultant
University. She served as Chief of Staff to Erin Murphy, Production Manager
Senator Charles H. Percy and as Chief Gina Russo, Communications Director
Legislative Assistant to former Senate
Republican Leader Hugh Scott. She is a Research Interns
Visiting Fellow at the Brookings Institution. Laurence A. Benenson
Benjamin T. Brickner
SENIOR ADVISORS Kathleen M. Hitchins
Sherry Orbach
James N. Dertouzos
James N. Dertouzos is a Senior Economist at the The Commission is a project of the Brookings
RAND Corporation in Santa Monica, Institution Center for Public Service and is sup-
California. He has taught at UCLA, Stanford, ported by a grant from the Dillon Fund.
T H E N AT I O N A L C O M M I S S I O N O N T H E P U B L I C S E R V I C E vii
ACKNOWLEDGEMENTS
This Commission arose largely out of the work of the Brookings Institution’s Center for Public
Service under the creative and energetic leadership of Paul C. Light, Director of the Center for
Public Service and Senior Advisor to the Commission, complemented by the indefatigable efforts
of Hannah Sistare, Executive Director, and her staff.
At its formation, other organizations long concerned with the effectiveness of government and
the state of public service joined together to provide analyses, ideas, and encouragement.
While those organizations, listed below, bear no responsibility for the particular conclusions the
Commission has reached, their participation in our work reflects one strongly shared perception:
The time has come to reform both the administrative organization and the personnel practices of
the federal government to meet the needs of the 21st century.
The Commission greatly appreciates the special contribution of these organizations to its work.
Together they provided a solid foundation of theory and practice, amplifying the experience of
the members of the Commission and their staff.
Council for Excellence in Government

United States General Accounting Office
Kennedy School of Government at Harvard University
National Academy of Public Administration
United States Office of Personnel Management
Partnership for Public Service
RAND Corporation
TABLE OF CONTENTS
SUMMARY OF RECOMMENDATIONS x
THE CASE FOR CHANGE 1

The Task We Face 3
Problems – And Opportunities 6
A Time For Action 11
RECOMMENDATIONS 13
The Organization of Government 14
Leadership for Government 18
Operational Effectiveness in Government 26
Interim Steps Toward Implementation 32
CONCLUSION 33
Appendix 36
The Government at Work 36
■ Examples of Jurisdictional Chaos 36
■ Case Examples of Entry-Level Hiring in the Civil Service 37
■ Federal Employee Appeal Process 40
■ New Approaches to Personnel Management 41
Acknowledgement of Sources
Utilized by the Commission 43
■ Witnesses at Commission Hearings 43
■ Institutions Providing Research and other Information to the Commission 44
■ Published Studies and Written Commentary 45
■ Organizations and Individuals Contributing to the Commission’s Knowledge 47
SUMMARY OF RECOMMENDATIONS
THE ORGANIZATION OF LEADERSHIP FOR
GOVERNMENT GOVERNMENT
Fundamental reorganization of the federal gov- Effective government leadership requires imme-
ernment is urgently needed to improve its diate changes in the entry process for top lead-
capacity for coherent design and efficient ers and the long-term development of a highly
implementation of public policy. skilled federal management corps.
R E C O M M E N D AT I O N 1 R E C O M M E N D AT I O N 5
The federal government should be reorganized The President and Congress should develop a
into a limited number of mission-related execu- cooperative approach to speeding and stream-
tive departments. lining the presidential appointments process.
R E C O M M E N D AT I O N 2 R E C O M M E N D AT I O N 6
The operating agencies in these new executive Congress and the President should work
departments should be run by managers chosen together to significantly reduce the number of
for their operational skills and given the author- executive branch political positions.
ity to develop management and personnel sys-
tems appropriate to their missions. R E C O M M E N D AT I O N 7
The Senior Executive Service should be divided
R E C O M M E N D AT I O N 3 into an Executive Management Corps and a
The President should be given expedited Professional and Technical Corps.
authority to recommend structural reorganiza-
tion of federal agencies and departments. R E C O M M E N D AT I O N 8
Congress should undertake a critical examina-
R E C O M M E N D AT I O N 4 tion of “ethics” regulations imposed on federal
The House and Senate should realign their employees, modifying those with little demon-
committee oversight to match the mission-driv- strated public benefit.
en reorganization of the executive branch.
R E C O M M E N D AT I O N 9
Congress should grant an immediate and signif-
icant increase in judicial, executive, and legisla-
tive salaries to ensure a reasonable relationship
to other professional opportunities.
RECOMMENDATION 10
Congress should break the statutory link
between the salaries of members of Congress and
those of judges and senior political appointees.
x UR GENT BUSINESS FOR A MERICA

OPERATIONAL
EFFECTIVENESS IN
GOVERNMENT
The federal workforce must be reshaped, and

the systems that support it must be rooted in
new personnel management principles that
ensure much higher levels of government per-
formance.
RECOMMENDATION 11
More flexible personnel management systems
should be developed by operating agencies to
meet their special needs.
RECOMMENDATION 12
Congress and the Office of Personnel
Management should continue their efforts to
simplify and accelerate the recruitment of federal
employees.
RECOMMENDATION 13
Congress should establish policies that permit
agencies to set compensation related to current
market comparisons.
RECOMMENDATION 14
Competitive outsourcing should follow clear
preset standards and goals that advance the
public interest and do not undermine core com-
petencies of the government.
T H E N AT I O N A L C O M M I S S I O N O N T H E P U B L I C S E R V I C E xi
THE CASE FOR CHANGE
n the 21st century, government touches every American’s life. It affects, often pro-
I foundly, the way we live and work. So we have a deep and growing concern that our
public service and the organization of our government are in such disarray.
The notion of public service, once a noble calling proudly pursued by the most talented Americans
of every generation, draws an indifferent response from today’s young people and repels many of
the country’s leading private citizens. Those with policy responsibility find their decisionmaking
frustrated by overlapping jurisdictions, competing special interests, and sluggish administrative
response. Those who enter the civil service often find themselves trapped in a maze of rules and
regulations that thwart their personal development and stifle their creativity. The best are under-
paid; the worst, overpaid. Too many of the most talented leave the public service too early; too
many of the least talented stay too long.
Those who enter public service often find themselves at sea in an archipelago of agencies and
departments that have grown without logical structure, deterring intelligent policymaking. The
organization and operations of the federal government are a mixture of the outdated, the outmoded
and the outworn. Related responsibilities are parceled out among several agencies, independent of
each other or spread across different departments.
In this technological age, the government’s widening span of interests inevitably leads to compli-
cations as organizations need to coordinate policy implementation. But as things stand, it takes too
long to get even the clearest policies implemented. There are too many decisionmakers, too much
central clearance, too many bases to touch, and too many overseers with conflicting agendas.
Leadership responsibilities often fall into the awkward gap between inexperienced political
appointees and unsupported career managers. Accountability is hard to discern and harder still to
enforce. Policy change has become so difficult that federal employees themselves often come to
share the cynicism about government that afflicts many of our citizens.
T H E N AT I O N A L C O M M I S S I O N O N T H E P U B L I C S E R V I C E 1
“A strong workforce analysis to address what lies at the core of the
current problems. We believe that the propos-
comes from having the right people als in this report, when implemented, will make
with the right skills a significant difference in the quality of govern-
ment performance.
in the right place at the right time.
The need to improve performance is urgent and
Only then will government operate
compelling. The peace dividend many Americans
in an effective, efficient, and expected from the end of the Cold War has
quickly vanished in the face of new and sinister
economic manner.” threats to our national security. The economic
boom of the 1990s has ended, and Americans
look to their government for fiscal and regulatory
U.S. Senator Daniel K. Akaka
policies to cope with harsh new economic reali-
ties. The looming baby boomer retirement bulge
will put greater pressure than ever before on gov-
The system has evolved not by plan or consid- ernment human services programs. Across the
ered analysis but by accretion over time, politi- full range of government activities, new demands
cally inspired tinkering, and neglect. Over time are accelerating, and the pace of change is quick-
the “civil service system” was perceived as a bar- ening. At the same time, the federal government
rier to effective government performance. Few has had difficulty in adapting to the knowledge-
leaders in Washington, even those who under- based economy and taking advantage of the sig-
stood the importance of revitalizing the public nificant advances in technology.
service, were willing to expend the political
capital deemed necessary to do so. And gov- The federal government is neither organized
ernment reorganization has come to be viewed nor staffed nor adequately prepared to meet the
as a task so daunting, requiring such extensive demands of the 21st century. It was in recogni-
and excruciating political negotiations, that it tion of that fact that the President found it nec-
takes a national emergency to bring it about. essary last year to propose the most sweeping
change in the organization of the federal gov-
Without government reorganization, it will be ernment in decades by creating the new
very difficult to revitalize the public service. Department of Homeland Security. But that
The fact of the matter is that we need both imperfect reorganization covers only part of the
government reorganization and revitalization of government. With every passing day, the gap
the public service. Without structure and between expectations and responsive capacity is
organization, no political leaders or body of growing. If we do not make the necessary
public servants will be able to do the kind of job changes now, when our needs are clear, we will
the citizens want and demand. be forced to cope with the consequences later in
crisis after crisis.
Recognition that there is much wrong with the
current organization and management of the In this report, we have not shied away from pro-
public service is widespread today. It stimulat- posing radical change. Our analysis and recom-
ed the creation of this National Commission on mendations may discomfort parts of our audi-
the Public Service, and it has inspired our deter- ence. We accept that inevitability for a simple
mined effort to call upon expert testimony and but important reason: the current organization of
2 UR GENT BUSINESS FOR A MERICA

the federal government and the operation of THE TASK WE FACE
public programs are not good enough. They are
not good enough for the American people, not American citizens and their national government
good enough to meet the extraordinary chal- face a variety of new and demanding challenges
lenges of the century just beginning, and not in the 21st century. People live longer and the
good enough for the hundreds of thousands of average age of the population will continue to
talented federal workers who hate the constraints increase. We are experiencing ever greater racial
that keep them from serving their country with and religious diversity. By mid-century there
the full measure of their talents and energy. We may be no majority race in the United States for
must do better, much better, and soon. the first time in our history. New technologies
are bringing far-reaching changes in the way we
work, produce our food, obtain and communi-
“We’ve got to get the public engaged cate information, and care for ourselves.
Globalization, the extraordinary needs of devel-
and we’ve got to get the media oping nations, and the availability of weapons of
mass destruction to nonstate actors are redefining
to understand the importance
national security and international relations.
and the linkage between getting good
In the United States, there are accelerating
public servants and demands on limited resources like fuel and
having a nation that works.” water. And there is ever-increasing demand for
expensive services, especially medical services
and especially for the elderly. We will need to
Constance Berry Newman, Assistant find ways and means of keeping our financial
Administrator for Africa, U.S. Agency for markets both free and honest. We will be
International Development forced to confront hard and deeply contentious
questions about the proper role of government
and the extent to which government can aid its
citizens with services and burden them with
taxes. And overlaying all this are the now-con-
stant challenges to our national security and to
our role and responsibilities in shaping a peace-
ful and prosperous world.
Americans expect more of their government

than ever before, not necessarily in size but in
responsiveness, and, inevitably, good govern-
ment will demand more of the American people
than ever before. For the relationship to work
well, the American people must trust and respect
their government, but that will only occur if the
quality of government performance improves.
No one should expect a 21st century population

confronting 21st century problems to be
HOW THE WORK OF GOVERNMENT HAS CHANGED
As the current director of the U.S. Office of Personnel Management has noted, the government of
1950 was largely a government of clerks. The newly created General Schedule, covering 96 percent
of the nonpostal, white-collar federal workforce, provided specific job descriptions and salary ranges
for 15 grades, each of which contained ten distinct steps. Most federal employees worked in the
lower levels of the administrative hierarchy — GS-3 was the most populous grade and more than half
of the General Schedule employees occupied grades at or below GS-4.
For most federal employees, the work was process oriented and routinized. It required few special-
ized skills. Because the character of work was consistent across agencies, public service policies could
demand consistency as well. The federal workers in one agency were paid and treated just like fed-
eral workers with the same classification in all others. The bedrock principle of the government’s
employee classification system was — and is — that job description and time in service determine
one’s compensation, not skill nor training nor education nor performance.
But as these consistent and rigid policies of equal treatment and protection of employee tenure took
deep root, the character of federal responsibilities and the nature of work began to change in ways
that would dramatically alter government functions and revolutionize the workplace in the second
half of the 20th century. Nearly every aspect of government became more technically complex. A
space program emerged and quickly became a significant federal activity. Foreign aid and foreign
trade became important components of foreign relations. Ensuring the safety of food and drugs, of
travel, and of the workplace loomed larger in importance. Science and technology research, complex
litigation, rigorous analysis, and innovation in service delivery became critical responsibilities in
agency after agency. Financial regulators became hard pressed by the competitiveness of modern cap-
ital markets. Increasingly, government operations were contracted to the private sector. A simple
comparison of the grade distributions between 1950 and 2000 reveals one dimension of the change.
In 1950, 62 percent of the basic federal workforce was in GS grades 1-5, with only 11 percent in the
top five grades; by 2000 those relationships were reversed: 15 percent of the federal workforce was
in the bottom five grades, compared to 56 percent in the top.
Rigid federal personnel policies, designed to enhance consistency and employee tenure, have become
an ever tighter straitjacket for a government that needs to place a higher value on creativity and flex-
ibility to meet rapidly changing and increasingly complicated demands. As the country, the world,
and the federal government have evolved into entities very different from their 1950 forms, the prin-
cipal structural elements of the federal public service have remained largely the same.
Occasional legislative initiatives, including the much-trumpeted Civil Service Reform Act in 1978,
brought some measure of flexibility to a few agencies with critical needs and created the promise —
too often unfulfilled — of performance-based compensation for some federal workers. But central
principles and core structures changed little.
SOURCE: Office of Personnel Management, A Fresh Start for Federal Pay: The Case for Modernization (April 2002)

THE CHANGING FEDERAL WORKFORCE, 1950-2000.
25%
1950 2000
20%
15%
10%
5%
0%
GS-1 GS-2 GS-3 GS-4 GS-5 GS-6 GS-7 GS-8 GS-9 GS-10 GS-11 GS-12 GS-13 GS-14 GS-15
SOURCE: Office of Personnel Management, A Fresh Start for Federal Pay: The Case for Modernization (April 2002), p. 5.
satisfied with a government hamstrung by A government that has not evolved to meet the
organizations and personnel systems developed demands of the early 21st century risks being
decades ago. The organizational structure of overwhelmed by the even greater demands that
the federal government was last reviewed in a lie ahead. Capacity and performance in gov-
comprehensive way in the mid-20th century, ernment do not now equal public demands and
first with a significant modernization of the expectations. Public trust steadily declines as a
defense establishment after World War II and
then in response to the two national commis-
sions created during the administrations of “And it was 12 years ago
Presidents Truman and Eisenhower and chaired when Paul Volcker chaired
by former President Herbert Hoover. Since
then, new entities have been created to cope the first commission
with new technologies, greatly expanded social
that dealt with a quiet crisis.
programs, and commitments to enhance the
health, safety, and environment of the nation. Well, it’s no longer quiet
This ad hoc layering of agencies, departments,
and programs greatly complicated management, and it is a crisis of even more
expanded the influence of powerful interests,
remarkable dimensions.”
and diminished coherent policy direction. The
federal government today is a layered jumble of
organizations with muddled public missions. Connie Morella, U.S. Representative
result. The gap will only grow larger in the Citizen disaffection and distrust of govern-
years ahead, and the consequences and costs of ment. Too many American citizens do not
that gap will grow as well. respect and trust their government — often for
the very good reason that government has not
earned their trust or respect.
PROBLEMS — AND
OPPORTUNITIES Survey after survey confirms that the past 40
years have been marked by a steep decline in
Our collective experience matches the central levels of public trust in government.
theme of most research and expert opinion on
the functioning of the federal government: This is not a simple phenomenon and has no
problems of organization and of human capital single cause. But recent opinion polling finds
have combined to produce results far short of strong relationships between negative percep-
what is needed. tions of the performance of government and
distrust of government.
Our recommendations deal with seven key
areas of concern, beginning with the overriding The public policies needed to meet the chal-
importance of the relationship between the lenges of the 21st century will require sacrifices
American people and their government. and strong support from the American people.
TRUST IN FEDERAL GOVERNMENT, 1964-2000.
70
60
Percentage
50
40
30
20
00
64
66
68
70
72
74
76
78
80
82
84
86
88
90
92
94
96
98
19
20
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
19
Year
SOURCE: Based on data from National Election Studies “Trust in Government Index 1958-2000.”
(http://www.umich.edu/~nes/nesguide/toptable/tab5a_5.htm)

OPPORTUNITY LOST: SEPTEMBER 11 AND PUBLIC TRUST IN GOVERNMENT
In the aftermath of the tragedy of September 11, public trust in the federal government spiked dra-
matically upward. In July 2001, only 29 percent of participants in a national survey said they trusted
the government in Washington to do the right thing “just about always” or “most of the time,” the
standard measure of trust in government. That finding was consistent with the low levels of public
trust that have been normal for many years. But in October 2001, a few weeks after the tragedy, trust
in government exploded upward to 57 percent. One had to return to the 1960s to find such high lev-
els of public trust.
The September 11 impact on trust in government was short lived, however. As stories of intelligence
failures, confusion over the collection and distribution of victims’ relief funds, and the issuance of visas
to terrorists emerged, public trust quickly began to fall back to earlier levels. By May 2002, it had
dropped to 40 percent.
Favorability ratings for some visible leaders like the President, vice president, secretary of state and
secretary of defense shot up after September 11 and remained unusually high in the months that fol-
lowed. But individual favorability did not translate into positive ratings of government performance.
SOURCE: G. Calvin Mackenzie and Judith M. Labiner, “Opportunity Lost: The Rise and Fall of Trust and Confidence in
Government After September 11,” Center for Public Service, Brookings Institution, May 30, 2002.
Those will be hard to achieve if citizens distrust tion and for complementary policy approaches
the government. But such distrust will continue is neglected.
to be the norm until government performance
improves sufficiently to earn greater respect A dramatic reflection of the problem was made
than it does now from the American people. evident in the President’s call and Congress’s
endorsement for massive reorganization of the
Organizational chaos. The seemingly coherent disparate agencies with responsibility for home-
mid-20th century organizational structure of land security. That proposed reorganization
the federal government has been overtaken by involves at least 22 agencies drawn from across
events. Today, we have inherited an accumula- government, affects at least 170,000 federal
tion of particular organizations that follow no employees, and acknowledges the need for flex-
logical pattern. As a consequence, public ser- ibility not possible under the old organizational
vants often find themselves in doubt about the structure and personnel system.
relevance and importance of their agency’s mis-
sion while spending inordinate amounts of time One-size-fits-all management. The major
coordinating or battling with their counterparts public service reform commissions of the
in other agencies. In energy policy, health care, 20th century sought to find single, consistent,
environmental protection, resource manage- overarching solutions to broad and complex
ment, and scores of other important public mat- organizational and management challenges.
ters, decisions are made and remade from differ- The first and second Hoover Commissions,
ent perspectives, while the need for coordina- most notably, sought to develop common
departmental and agency structures and uni- But those highly motivated public servants are
form management practices. now gone or soon will be. Within the next five
years, more than half the senior managers of the
If that was ever a viable or relevant approach, it federal government will be eligible to retire.
is no longer. One size does not fit all in a gov- Not all will, but the best estimates are that by
ernment performing tasks as complex and varied the end of this decade, the federal government
as ours. Agencies have broadly different mis- will have suffered one of the greatest drains of
sions. One delivers monthly pension checks, experienced personnel in its history.
another regulates the securities industry, a third
conducts research on the frontiers of science, That would be less worrisome if there were evi-
and so on. Because missions differ so widely, no dence that the middle ranks of government con-
single administrative structure or management tained ready replacements and the entry levels
approach can work effectively in all cases. were filling with people full of promise for the
Excellent performance requires organization, future. But the evidence, in fact, points in the
leadership, and culture that fit the mission, not opposite direction. Far too many talented pub-
just a single theory of administration. lic servants are abandoning the middle levels of
government, and too many of the best recruits
are rethinking their commitment, either because
they are fed up with the constraints of outmod-
ed personnel systems and unmet expectations
“Our federal civil service today
for advancement or simply lured away by the
stands at the intersection substantial difference between public and pri-
vate sector salaries in many areas. Some
of opportunity and peril.” employees leave federal service because they
can no longer tolerate the dismal facilities and
working conditions in many agencies. Drab
U.S. Representative Steny Hoyer
and tiny workspaces, inadequate room for stor-
age and record-keeping, and aging lighting,
heating, and air conditioning systems — too
common in the federal government — seem to
Vanishing talent. The middle decades of the many employees emblematic of the low value in
20th century were in some ways a golden age which they as workers are held. The invasions
for public service recruiting and retention. First, of personal privacy resulting from financial
public response to the Great Depression, then reporting, background investigations, and pub-
to the war against the Axis powers, drew com- lic scrutiny in general also take a toll on morale.
mitted and talented Americans to government Increasingly, federal workers have real cause to
to manage those enormous enterprises. In the be concerned about their personal safety.
1960s, as the federal government took the lead
in efforts to define and broaden the civil rights Too often, as well, federal employees depart
of citizens and to protect consumer and envi- before their time in frustration over the stran-
ronmental rights, government again became a gling organizational and procedural complexity
powerful magnet for the passion and commit- of contemporary government decisionmaking.
ment of talented citizens. Those generations of For too many, even their best efforts to be
young Americans were drawn to public service responsive and creative end up in organizational
by a powerful sense of mission. oblivion.

The entry-level situation is equally dismaying. ernment agencies. To be sure, there are employ-
Rarely in recent history has there been a time ees in every agency who perform work similar to
when public service was so far from the minds that of other employees in other agencies. Every
of America’s young people. The federal govern- agency has security personnel, human resource
ment is no longer viewed as the destination of staff, accounting specialists, and so on. And
choice for many graduates of the nation’s top efforts to ensure commonality in their treatment
public policy and administration programs.1 and compensation still make sense.
Those who do have an interest in public service In the broader array of professional and mana-
soon find that it is one of the most difficult pro- gerial jobs, however, such comparisons are
fessions in America to enter. Complex and con- often impossible. There is no basis for compar-
torted entry procedures stop too many potential ing a trade analyst to a microbiologist or a space
applicants in their tracks. Those who apply for shuttle designer to an airport security manager.
jobs in the private sector typically find the
application process much simpler and more There have been efforts in recent years to inject
streamlined and they get responses to their flexibility and market-relatedness in setting
applications much more quickly. Faced with a compensation for some agencies with critical
job offer from a private sector employer in one missions and recruitment crises. In effect, there
hand and the prospect of many months of has been a reluctant concession to reality. The
tedious review of their government job applica- benefits have been evident but scattered and
tion in the other, they make the rational choice uneven. The broader issues of how compensa-
to take the sure thing. tion can rationally be determined across the
government remain to be adequately addressed.
So we confront a classic “catch-22.” As the gov-
ernment’s experienced workers depart for retire-
ment or more attractive work, it creates an
opening for new energy and talent; yet the “The problem with the pay system
replacement streams are drying up. Left
unchecked, these trends can lead to only one is there is no incentive structure,
outcome: a significant drop in the capabilities of no recognition of hard work…
our public servants.
it is very hard to maintain
Personnel systems out of touch with market
my motivation knowing
reality. For more than a century, the central
principle of federal personnel management has that even if I worked half as hard,
been equity across agencies in personnel mat-
ters. In a personnel system dominated by rela- I would still receive my scheduled
tively low-level jobs, “equal pay for equal work”
‘step’ increase each year.”
was a reasonable and workable management
theory.
Employee, U.S. Department of Health and
But we no longer have a government dominated Human Services
by people performing low-skilled jobs. The
concept of “equal work” is now impossible to
apply to many of the tasks undertaken by gov-
Personnel systems are immune to performance. This has added to the great discouragement
Three factors, far beyond any others, determine among many federal employees with the per-
the compensation of the overwhelming majori- formance of some of their colleagues. A recent
ty of federal employees. The first is how indi- Center for Public Service survey of federal
vidual jobs fit into the General Schedule classi- employees found that the average estimate of
fication system; the second is the geographical the number of poor performers in their midst
location of the job; and the third is the employ- was about 25 percent, and more than two-thirds
ee’s time in service. Quality of performance, had negative views of their agency’s system for
which ought to be the central factor in deter- disciplining those poor performers.4 Such a sys-
mining compensation, is too often ignored. tem, of course, also discourages potential
employees, especially the most talented and
With the Civil Service Reform Act of 1978, promising, who are reluctant to enter a field
bonuses, merit pay, and performance awards where there are so few financial rewards for
were instituted for high-performing civil ser- their hard work, where mediocrity and excel-
vants, especially top managers. However, those lence yield the same pay check.
efforts failed to produce the intended results.
Congress has rarely provided sufficient appro- Labor-management conflict. The extended
priations to fund the bonuses, and the perform- debate over the creation of a Department of
ance evaluation system that supports them has Homeland Security through the summer and
too often been rendered ineffective by man- fall of 2002 makes clear that labor-management
agers seeking to spread bonuses around as com- relations will pose a challenge to reform. Some
pensation supplements for large numbers of of the disagreement was the result of clear sub-
employees instead of incentives or rewards for stantive differences; some was a reflection of
top performers. “An employee needs to do lit- partisan political jockeying; much was the result
tle, if anything, to earn these increases,” accord- of inadequate communication. It was only after
ing to the Office of Personnel Management. the November elections presaged a switch from
“They are essentially entitlements.”2 Democrat to Republican control of the Senate
that a compromise was reached. What is clear
The consequence is a compensation system that is that a new level of labor-management dis-
makes few distinctions between hard-working course is necessary if we are to achieve any seri-
high-achievers and indifferent nonachievers. ous reform in the civil service system.
There are too few rewards for those who do their
jobs well and too few penalties for those who per- The Commission believes that it is entirely possi-
form poorly. The Senior Executive Service (SES), ble to modernize the public service without jeop-
created as part of the Civil Service Reform Act of ardizing the traditional and essential rights of
1978, was an attempt to use pay-for-performance public servants. Federal employees should be
measures to reward senior level managers. Every hired based on their demonstrated skills and tal-
three years, members of the SES are subject to ents, not their political affiliations. They should
recertification based on their performance levels. enjoy protection from discrimination and from
However, a study conducted in 1997 by the arbitrary personnel actions. The traditional val-
Office of Personnel Management found that 99 ues of merit hiring, nondiscrimination, protection
percent of SES members were routinely recerti- from arbitrary discipline or dismissal, and free-
fied in each three-year cycle, indicating that dom from political interference should remain
recertification is merely a rubber stamp and not a paramount. Engaged and mutually respectful
measure of, nor an incentive to, performance.3 labor relations should be a high federal priority.

The President, department and agency heads, A TIME FOR ACTION
members of Congress, and federal employee
representatives can examine earlier public sec- Our analysis yields one overarching conclusion
tor labor-management collaborations to find above all others: The task we face is not small.
models for a new dialogue. Examples include There is no magic bullet.
the Quality Service through Partnership pro-
gram developed by former Governor George But neither are solutions beyond our grasp.
Voinovich and the Ohio American Federation Often in our past — in the 1880s, during the
of State, County and Municipal Employees two world wars, and in meeting the threat of a
Union. Mayor Stephen Goldsmith of great depression — we have faced pressures and
Indianapolis and employee representatives col- demands that required government to alter its
laborated successfully to address deep differ- structure and operations. In recent years, we
ences over contracting for city services. At the have seen some state and local governments
federal level, President Clinton established a successfully confront many of the problems
National Partnership Council to foster better identified here.
labor-management communications at the
agency level. Internal Revenue Service In Washington, too, thoughtful people
Commissioner Charles Rossotti used the 1998 throughout the federal government have exper-
IRS reform legislation, and an internal culture imented, often successfully, with innovative
that already encouraged open relations, to forge approaches to staffing and managing the public
a constructive labor-management relationship service. There is much cause for optimism.
at the IRS. Governments and government agencies can
change, even in ways that seem far-reaching,
and those changes can produce significant
improvements in efficiency and performance.
"The fact is we all share the same
Partly in response to the terrorist threat, there is
goals: We want the federal government today greater understanding that government
plays an indispensable role in American life.
to be the employer of choice, This role cannot be responsibly fulfilled by
mediocre performance or mediocre talent.
to create an environment
where the employees who are here, We also note a confluence of conditions that
make this a propitious time for innovation in the
who are dedicated and committed, public service. The enormous retirement bulge
want to stay, and where we are facing the federal government in this decade,
though worrisome in many ways, is also an
able to hire those who are looking opportunity to rebuild and fortify for the future
the senior levels of the public service.
to enter federal service."
We also detect a strong and growing bipartisan
Colleen Kelley, President, understanding in Washington that the public
National Treasury Employees Union service must be modernized to meet the demands
of an environment very different from the one in
which the current rules were shaped. Most obvi-
ously, the debate over the creation of a new
Department of Homeland Security has raised For all these reasons — because there is much
important issues about the organization of gov- wrong and a great need for change, because the
ernment, the role of the public service, and the American people and their elected representa-
ways in which it must be managed to respond to tives seem unusually disposed to consider such
21st century needs. Plainly, frustrations with the change, and because the government employ-
old order are not limited to questions of national ees who will be most affected are themselves
security. Across the political spectrum, there are often advocates of change — we believe the
calls for new approaches and new ideas. time is right, indeed the time is ripe, for action
on a broad front.
Important as well, we note deep disaffection
within the public service. Federal employees We hope the recommendations that follow from
themselves are unhappy with the conditions our own analysis of the problems will provide
they face. They are frustrated and fatigued. focus for public debate and needed decisions.
They lack the resources they feel they need to
do their assigned jobs. They struggle with the
constraints of an outmoded personnel system
that keeps them from fully developing or utiliz- “Our members tell us
ing their talents. They resent the protections
that they desperately want
provided to those poor performers among them
who impede their own work and drag down the to make a difference in their jobs and
reputation of all government workers. While
understandably wary of reforms that might do provide efficient service to the public,
little more than introduce new political pres- but lately, more than ever,
sures into their work environments, the vast
majority of federal employees know the system they have less of a say over
is not working and is in need of repair.
how the work can best be done and
Moreover, we sense a substantial meeting of the they are frustrated.”
minds among independent researchers, good-
government groups, educators, and experienced
public managers about the main items of need- Mark Roth, General Counsel, American
ed reforms. Federation of Government Employees

RECOMMENDATONS
he compelling need to address the pressing problems identified in this report cuts
T across regions, generations, and political affiliations. We must have a government

that can respond efficiently and effectively to political direction. When the
American people, through their representatives, express a desire for policy change, the operating
agencies of the government should be able to deliver that change promptly and efficiently. We
believe that the recommendations that follow will greatly enhance their capacity to do so.
Taken together, these recommendations call for far-reaching changes in the structure and opera-
tions of the federal government. But it is not enough to call for large-scale organizational changes.
These changes will not be effective without able public servants who are equipped and motivated
to do their best in implementing public policies. And it is equally true that new approaches to
recruiting and managing federal employees cannot be effective without a complementary organi-
zational framework.
Tinkering around the edges is not enough. Decades of disjointed tinkering, in fact, have con-
tributed to many of the problems we must now correct. It is time for deliberate, comprehensive
review and reconstruction. This will not be completed soon, perhaps not even in a decade, but it
must begin now and must reach deeply into all federal activities. The creation of the Department
of Homeland Security was a first step. The effort that led to the development of that reorganiza-
tion must now be applied government wide.
THE ORGANIZATION OF
GOVERNMENT
Fundamental reorganization of the federal government is urgently needed to improve its capac-
ity for coherent design and efficient implementation of public policy.
The structure of the federal government is out- R E C O M M E N D AT I O N 1

moded. Some programs no longer have viable The federal government should be reorganized
missions. More often, too many agencies share into a limited number of mission-related exec-
responsibilities that could profitably be com- utive departments.
bined. Decisionmaking is too often entangled
in knots of conflict, clearance, coordination, As the debate about homeland security illustrat-
and delay. The necessity for coordination and ed, large-scale reorganization of the federal
consultation cannot be permitted to overwhelm government is no easy task. In some ways, the
and needlessly delay decisionmaking. barriers to success are compounded by a piece-
meal approach. Consequently, we urge a broad-
The simple reality is that federal public servants er, more comprehensive vision, recognizing that
are constrained by their organizational environ- implementation will take considerable determi-
ment. Changes in federal personnel systems nation and time. The basic point is that a sig-
will have limited impact if they are not accom- nificant change in structure is essential for the
panied by significant change in the operating responsive and efficient implementation of pub-
structure of the executive branch. This is why lic policy that the new century demands.
we begin our recommendations with an empha-
sis on issues of organization. Our goal is enhanced mission coherence and
role clarification. Federal agencies that share
Every agency has — or should have — a clear closely related missions should be administered
mission with structures and processes that fol- by the same organizational entity. A few large
low from their particular responsibilities. With departments in which those agencies are
rare exception, agencies with related mandates grouped together should enhance their employ-
should fit together in a broad organizational ees’ sense of purpose and loyalty, provide oppor-
scheme that permits and encourages construc- tunities for advancement and job mobility, and
tive interaction rather than battles over turf. encourage interagency cooperation. It is a much
Federal departments should be reorganized to more sensible approach to government organi-
bring together agencies that contribute to a zation than the current pattern in which agen-
broad mission in a manner responsible to direc- cies with similar responsibilities have been scat-
tion from elected leaders and their appointees, tered throughout the government.
and subject to careful oversight by Congress but
sufficiently independent in administration to The reorganization that we recommend here
achieve their missions. will require significant improvements in the
quality of top executives, in the management of
operating units, and in the ability of agencies to
meet their unique staffing needs. There must
also be clearer definition of the distinct roles of

federal employees. Those charged with policy ■ Seven different federal agencies adminis-
decisions should be political appointees, most ter 40 different programs aimed primarily
of whom would work in the central offices of at job training.
the large departments. Under the secretary ■ Eight different federal agencies operate 50
would be deputy, under, and assistant secretaries different programs to aid the homeless.
to manage the budget and policy development. ■ Nine agencies operate 27 teen pregnancy
Although we contemplate that these appointees programs.
would oversee the individual operating agencies ■ Ninety early childhood programs are
within their departments, operational responsi- scattered among 11 federal agencies.6
bility would be delegated to the operating agen-
cies. This would promote the dual advantages of 4. Danger to our national security and
mission cohesion and of smaller operating units. defense.
There is extensive evidence now of duplication, ■ The Hart-Rudman Commission (U.S.

overlap, and gaps in many critical government Commission on National Security/21st
functions. This pattern consistently under- Century) found that as a result of exces-
mines effective government performance. sive layering, performance suffered pro-
Examples are plentiful and consequences are foundly. The commission highlighted
deeply damaging to the national interest. the problem of “gaps and seams” in mis-
sion responsibilities:
1. Waste of limited resources. As many as 12
different agencies are responsible for admin- Redundancy and overlap between organizations, as
istering more than 35 food safety laws. well as greatly diffused lines of authority, responsibil-
Testimony before the Senate Governmental ity and accountability generally point to “gaps and
Affairs Subcommittee on Oversight of seams.” These generally lead to the creation of
Government Management, Restructuring “patches” or “workarounds,” and the migration of func-
and the District of Columbia noted that tions and power to different organizations that would
fragmented responsibility under the current seem to lie outside their traditional core competencies.
food safety system leaves many gaps, incon-
sistencies, and inefficiencies in government To better address the nation’s homeland secu-
oversight and results in an unacceptable level rity needs, the Hart-Rudman Commission
of public health protection.5 recommended extensive reorganization of
the Department of Defense, Department of
2. Inability to accomplish national goals. For State, and even the National Laboratories.
example, with 541 clean air, water, and The commission found that “there is a critical
waste programs in 29 agencies, no one in need to reshape the Department of Defense
the federal government can effectively man- to meet the challenges of the 21st Century
age the application of federal resources security environment.” And the Commission
devoted to these goals. warned that the U.S. intelligence capabilities
were hindered by “organizational constraints
3. Impediments to effective management. that limit the Intelligence Community’s abili-
Some government missions are so widely ty to optimally address emerging security
dispersed among so many agencies that no threats.” All of these recommendations were
coherent management is possible. Some made prior to the attacks on the United
examples: States on 9/11/01.7
■ Those participating in the Joint R E C O M M E N D AT I O N 2
Congressional Committee inquiry into The operating agencies in these new executive
the intelligence failures of 9/11 repeat- departments should be run by managers cho-
edly raised questions about the organiza- sen for their operational skills and given the
tion of U.S. intelligence agencies, the authority to develop management and person-
overlap and gaps in responsibilities, and nel systems appropriate to their missions.
the failure to share information within
and between agencies.8 Subject to clear objectives and performance cri-
■ There are 123 federal offices and agen- teria, these agencies should be given substantial
cies located in 16 federal departments flexibility in the choice of subordinate organi-
with responsibility for counterterrorism.9 zational structure and personnel systems.
Employees government wide should continue
We believe that essential reorganization must to have the basic employment guarantees of
begin with commitment to a few basic princi- merit hiring, nondiscrimination, and protection
ples. First, programs that are designed to from arbitrary or political personnel actions.
achieve similar outcomes should be combined These grants of authority would be defined by
within one agency unless there is a compelling the President and subject to oversight by the
case for competition. Second, agencies with Office of Management and Budget and the
similar or related missions should be combined Office of Personnel Management, as well
in large departments that encourage coopera- as Congress. The Office of Personnel
tion, achieve economies of scale in manage- Management, the management side of OMB,
ment, and facilitate responsiveness to political and human resources and management special-
leadership. Third, these new agencies and ists government wide have been subjected to
departments should be organized so that there personnel reductions in recent years. The
are as few layers as possible between the top added responsibilities recommended here will
leadership and the operating units. Fourth, require a strengthening of these capabilities.
agencies should have maximum flexibility to
design organizational structures and operating Many agencies currently have executives who
procedures that closely fit their missions. serve in the role of chief management or operat-
ing officer, either by administrative appointment
Such reorganization takes time and patience. or by statute. The new Department of
We believe a program on the scale we recom- Homeland Security will have a presidentially
mend here may take a decade or more to com- appointed, Senate confirmed, Undersecretary for
plete. But it is a task we must begin now and Management. There is considerable support for
seek to accomplish with dispatch. The federal the view that such an officer can provide impor-
government will never fully meet the needs of tant management focus, particularly where the
the American people until this work is done. leadership of the agency is focused on policy
development and implementation. We recom-
mend that the decision as to whether such a posi-
tion should exist be considered on an agency-by-
agency basis, at smaller as well as larger agencies.
Of particular importance is that managers,

whether political or career, have the appropriate
experience, training, and skills to manage

effectively. This should be a priority for the With these characteristics, Congress could
President in identifying executives for appoint- reject a reorganization proposal through a
ment and a matter for congressional inquiry majority vote against approval in either chamber.
during the confirmation process. Finally, we
recommend that Congress pay particular atten-
tion to the management implications of any R E C O M M E N D AT I O N 4
legislation it considers. The House and Senate should realign their
committee oversight to match the mission-
driven reorganization of the executive branch.
The President should be given expedited Operating agencies desperately need the sup-
authority to recommend structural reorganiza- port of an active Congress if they are to perform
tion of federal agencies and departments. effectively. At the same time, broad grants of
administrative flexibility demand effective con-
We recommend a qualified restoration of the gressional oversight, transparency, and clear
President’s authority to reorganize departments reporting relationships, which in turn require
and agencies as the most efficient way to ensure that congressional committees and subcommit-
that the operations of the federal government tees organize themselves around the same cen-
keep pace with the demands placed upon it. tral missions as the departments of the executive
We suggest as a model the executive reorgani- branch.
zation authority that began with the
Reorganization Act of 1932 (5 USC 901 et seq.) A mismatch of missions reduces Congress’s abil-
and continued with its successor statutes ity to provide broad effective oversight and can
through the middle decades of the 20th century. lead instead to micromanagement of those
aspects of agency activities that happen to be
We would assign the initiating role to the most visible.
President. He would propose structural reor-
ganizations or new management approaches At critical junctures in its past — in 1911, in
that would contribute to the accomplishment of 1946, and in 1973 — Congress has reorganized
agency missions. In general, these proposals its committee jurisdictions to reflect changes in
would take into account recommendations from the country and in the executive branch. As the
the departments and agencies, from the executive branch evolves in the new century, the
President’s policy and management advisers, organization of Congress must evolve as well.
and from Congress and its committees.
To take effect, these proposals would have to be

approved by Congress. But such reorganization
proposals would have two characteristics
intended to ensure both their coherence and a
timely congressional response. Specifically, we
suggest that each proposal:
■ Not be subject to amendment,

■ Be given an up-or-down vote within 45
legislative days of submission.
LEADERSHIP FOR GOVERNMENT
Effective government leadership requires immediate changes in the entry process for top leaders
and the long-term development of a highly skilled federal management corps.
No organization in this country is more talented individuals for service as presidential

dependent on qualified senior leadership than appointees and senior career managers and find
the federal government. Yet few organizations a better approach to allocating positions and
in our society have paid so little attention to coordinating efforts between them.
leadership succession and leadership quality.
Senior leadership in federal agencies comes R E C O M M E N D AT I O N 5

from two sources: political appointments by the The President and Congress should develop a
President and the career ranks of the Senior cooperative approach to speeding and stream-
Executive Service (SES). Today, both leadership lining the presidential appointments process.
sources are seriously flawed, and the awkward
intersections of the two frequently compound Repairing the presidential appointments process
these flaws. The challenge is to recruit the most must be a high priority in any effort to strength-
THE PRESIDENTIAL APPOINTEE PROBLEM
Contemporary presidents face two daunting difficulties in filling the top posts in their administra-
tions: the number of appointments is very large, and the appointments process is very slow.
When President Kennedy came to office in 1960, he had 286 positions to fill in the ranks of Secretary,
Deputy Secretary, Under Secretary, Assistant Secretary, and Administrator — the principal leadership
positions in the executive branch. By the end of the Clinton administration, there were 914 positions
with these titles. Overall in 2001, the new administration of President George W. Bush confronted a
total of 3,361 offices to be filled by political appointment.
The time required to fill each of these positions has expanded exponentially in recent decades. (See
graph.) In part, this results from the more thorough and professional recruitment procedures
employed by recent administrations. But most of the elongation of the appointments process is the
consequence of a steady accumulation of inquiries, investigations, and reviews aimed at avoiding
political embarrassment. These include extensive vetting, lengthy interviews, background checks,
examinations of government computer records, completion of questionnaires and forms composed of
hundreds of questions, FBI full-field investigations, public financial disclosure, and conflicts of inter-
est analysis. Much of the process is duplicated when a nomination goes to the Senate and is subject-
ed to the confirmation process.
Potential appointees sometimes decline to enter government service when confronted by this process.
Others drop out along the way. But the principal impact of the modern appointments process is the
delay it imposes on the staffing of new administrations.

AVERAGE TIME TO COMPLETE AN APPOINTMENT, BY ADMINISTRATION
10
8
Months
0
y
an
r
sh
n
II
ed
te
o
to
sh
Bu
g
ix
ar
n
ea
Bu
en
li
R
C
K
SOURCE: Calculated by The Presidential Appointee Initiative, Brookings Institution. Calculations reflect the average time
elapsed between Inauguration day and Senate confirmation for initial appointees in each administration.
en public service leadership. Other commis- We believe that both branches should work
sions have recommended a number of thought- toward a compact that would assure expeditious
ful reforms of the appointments process, most treatment of appointments, disciplined con-
notably a long-overdue streamlining of the myr- straints on attacks on appointees or improper
iad forms that political appointees must com- delay of their appointments as ways to gain
plete. And at the time of our work, there is leg- political leverage, and an enhanced emphasis at
islation pending in Congress that would imple- both ends of Pennsylvania Avenue on doing
ment those changes. We endorse these efforts. what is necessary to attract America’s most tal-
ented and creative leaders to public service.
But more is needed to fix the presidential
appointments process than legislation alone can
provide. An attitude change is essential as well. R E C O M M E N D AT I O N 6
The appointments process has become a politi- Congress and the President should work
cal battleground. Presidents and senators are the together to significantly reduce the number of
principal warriors, but candidates for presiden- executive branch political positions.
tial appointment are the principal victims. We
desperately need a mutual recognition on the The first step in any effort to improve leader-
part of Senate leaders and the President that ship in the public service must be a rationaliza-
they must change their approach to the tion of the leadership structure of federal
appointments process. agencies and departments. Over the past half-
century, the layers of political appointees and positions. We believe that a reduction of at
senior career managers have grown steadily, least one-third is an appropriate first target.
without regard to organizational needs or any
sustained effort to tie structure to performance. The number of political appointees grows with
each succeeding administration. We recom-
When a new administration takes office or a mend that the executive branch and Congress
new agency head is appointed, it often seems work together to selectively identify political
too politically difficult, or the time horizon positions that could be changed to career posi-
too short, to reshape the top ranks or to tions or that could be terminated altogether.
improve accountability. So more leadership
posts are created to help agency heads and
presidents work around old leadership posts R E C O M M E N D AT I O N 7
they cannot control or remove. Compounded The Senior Executive Service should be divid-
over the decades, this pattern has yielded a ed into an Executive Management Corps and a
federal management structure that is top- Professional and Technical Corps.
heavy, cumbersome, and contrary to the goals
of effective leadership and meaningful Reducing the layers of executive management in
accountability. government will require more from the execu-
tives who remain in the chain of command.
Now we find ourselves in a situation that is
deeply problematic on several counts. The Unfortunately, the Senior Executive Service
presidential appointments process simply can- (SES), created in 1978, has never developed into
not keep up with the burden of filling all these the hoped-for corps of experienced managers that
positions with properly qualified leaders in a would move across agencies, deploying their
timely way. Political appointees may enter their skills and bringing the benefit of their experience
jobs with too little trust in the competence and to a broad array of management venues. Because
loyalty of career executives. Newly selected the SES is the main route for senior employee
department and agency heads are often unable advancement, many members of the SES are not
to keep control their own subordinate appoint- managers at all but scientists, other professionals,
ments due to pressure from the White House, and technical specialists. Few SES managers have
special interest groups, or determined members ever worked, or applied to work, outside of the
of Congress. Thus these department and agency agency in which they are currently employed.
heads are forced to lead disparate teams of
strangers, some of whom owe little loyalty to The original design also included a rewards and
the senior leadership. Talented and experienced incentive system where compensation for senior
senior career managers find themselves forced managers would be closely tied to performance.
further and further away from the centers of Those who performed at the highest levels
decisionmaking, even as they create new man- would get bonuses and merit awards equal to a
agement layers to compensate for pay freezes substantial portion of their annual pay. But
and the lack of opportunity for advancement Congress has often failed to appropriate the
created by an aging workforce. funds necessary to fuel that reward system. In
addition, by tying senior executive pay to its
No one benefits from this situation, and an own pay, Congress has prevented senior execu-
essential first step toward improvement is a sig- tives from receiving the annual increase provid-
nificant cut in the number of political executive ed to most government workers. Although

there are six levels on their pay scale, 70 percent Greater effort must be made to identify potential
of all SES members now earn the same compen- managerial talent early in employees’ careers and
sation. So much for performance incentives. to nurture it through adequately and consistently
funded training, professional development, and
We believe that dividing the Senior Executive subsidized opportunities for graduate education
Service into a corps of professional and techni- and work experience outside government. While
cal specialists and another of highly talented we noted that there should be greater receptivity
executives and managers can address these to lateral entry into these management ranks, the
problems, as set forth below: bulk of government managers in the future will
and should come from the lower and middle
First, the new Professional and Technical Corps ranks of government employees today.
(PTC) and Executive Management Corps
(EMC) would draw their talent from govern- The military services have long been more
ment and also from the private and public effective in this area, with great benefit to the
nonprofit sectors as needed. quality of the senior officer corps. The pending
deluge of managerial retirements in the civilian
Second, agencies should be given maximum service would be far less ominous if the civilian
flexibility in assigning members of the EMC. agencies had been doing a better job of leader-
Greater flexibility is important at all levels of ship succession, planning, and preparation.
government but is especially significant at the
senior management levels where individual per-
formance is more broadly significant. Mobility R E C O M M E N D AT I O N 8
across agencies should characterize service in Congress should undertake a critical examina-
the EMC. We also believe the EMC should be tion of “ethics” regulations imposed on federal
structured around performance-based contracts employees, modifying those with little demon-
for specific terms of service and that a signifi- strated public benefit.
cant portion of EMC compensation should be
related to performance. Over the past 40 years, Congress has enacted
laws and presidents have issued executive orders
Third, the EMC should be separated from the that have produced a deeply layered and extraor-
PTC for purposes of recruiting, compensation, dinarily cumbersome regulatory scheme
assignment, and effective utilization. In gener- designed to ensure the integrity of federal
al, we believe that compensation for members of employees. Every isolated scandal seems to pro-
the EMC will be similar across the government, duce new laws designed to prevent its recurrence.
while compensation for technical and scientific
specialists would vary much more in response to We believe that the ethics regulations imposed
differences in individual labor markets. on public servants have grown out of propor-
tion to public need and to common sense. The
Finally, and most important, greater attention system has become dysfunctional and must be
must be paid to the development within the fed- reexamined.
eral government of strong management talent.
The quality and motivation of government It is now the case that more than 250,000 fed-
managers determines whether policy decisions eral employees must make annual disclosure of
will be successfully implemented and whether the full details of their personal finances; for
government programs will run effectively. nearly 25,000 of them, the disclosure is public.
As noted above, every presidential appointee we recommend that legislation be enacted to
must navigate through endless forms and ques- reduce the number of federal employees
tionnaires probing into every detail of his or her required annually to disclose their personal
life before entering public service. Thousands finances and that Congress enact legislation
of federal employees spend their days investi- recommended by the Office of Government
gating the behavior of other federal employees. Ethics and currently pending in the U.S. Senate
Requirements that employees divest themselves to simplify the personnel disclosure forms and
of financial holdings sometimes go beyond other questionnaires for presidential appointees.
what is rational and can result in unjustified
financial loss to the employee. We urge Congress to seek a better balance
between the legitimate need of the public for cer-
tain limited personal information about public
servants, and the inherent rights of all Americans
“Our study found that in the years
— even public servants — to protection from
from 1995 through 2000, unjustified invasions of their privacy. Such a re-
striking of the balance, we firmly believe, will
99.3% of all the public financial
make public service much more attractive to the
disclosure forms filed in those years kinds of talented people government must recruit
and retain in the years ahead.
were never viewed
by anybody in the public.”

Congress should grant an immediate and
G. Calvin Mackenzie, Visiting Fellow, significant increase in judicial, executive, and
The Brookings Institution legislative salaries to ensure a reasonable rela-
tionship to other professional opportunities.
The “ethics” barriers create a climate of distrust Judicial salaries are the most egregious example
that limits lateral entry of talent into govern- of the failure of federal compensation policies.
ment, which in turn creates a gulf of misunder- Federal judicial salaries have lost 24 percent of
standing and suspicion that undermines govern- their purchasing power since 1969, which is
ment performance. Mission-related personnel arguably inconsistent with the Constitutional
interchanges would benefit those in govern- provision that judicial salaries may not be
ment who work with the private sector and reduced by Congress. The United States cur-
those in the private sector who work with gov- rently pays its judges substantially less than
ernment. At critical junctures in our past — England or Canada. Supreme Court Justice
during the two world wars, for example — such Stephen Breyer pointed out in testimony before
interchanges contributed vitally to the accom- the Commission that, in 1969, the salaries of
plishment of important government missions. district court judges had just been raised to
But current ethics laws now prohibit virtually all $40,000 while the salary of the dean of Harvard
such personnel movement. Law School was $33,000 and that of an average
senior professor at the school was $28,000.
We urge Congress to make federal ethics rules
cleaner, simpler, and more directly linked to the That relationship has now been erased. A recent
goals they are intended to achieve. Specifically, study by the Administrative Office of the U.S.

“Inadequate compensation have sought private sector employment — and
compensation — rather than making the impor-
seriously compromises the judicial tant contributions we have long received from
independence fostered by life tenure. judges in senior status.
The prospect that low salaries Unless this is revised soon, the American people
will pay a high price for the low salaries we
might force judges
impose on the men and women in whom we
to return to the private sector invest responsibility for the dispensation of jus-
tice. We are not suggesting that we should pay
rather than stay on the bench judges at levels comparable to those of the part-
risks affecting judicial performance.” ners at our nation’s most prestigious law firms.
Most judges take special satisfaction in their
work and in public service. The more reason-
William H. Rehnquist, Chief Justice, able comparisons are with the leading academic
U.S. Supreme Court centers and not-for-profit institutions. But even
those comparisons now indicate a significant
shortfall in real judicial compensation that
requires immediate correction.
Courts of salaries of professors and deans at the
twenty-five law schools ranked highest in the Executive compensation has reached a similar
annual U.S. News and World Report survey found crisis. Today, in some departments and agen-
that the average salary for deans of those schools cies, senior staff are paid at a higher level than
was $301,639. The average base salary for full their politically appointed superiors. We recog-
professors at those law schools was $209,571, nize that some appointees enter office with
with summer research and teaching supplements enough personal wealth to render salaries irrel-
typically ranging between $33,000 and $80,000. evant, while others see great value in the pres-
Federal district judges currently earn $150,000.10 tige and future earning potential associated with
high public office. Increasingly, more are
Also in testimony before the Commission, Chief dependent on the salary of an employed spouse.
Justice William Rehnquist noted that “according But the good fortune — or tolerance for sacri-
to the Administrative Office of the United fice — of a few cannot justify the financial bur-
States Courts, more than 70 Article III judges left dens that fall on the many.
the bench between 1990 and May 2002, either
under the retirement statute, if eligible, or sim- Cabinet secretary pay rose 169 percent between
ply resigning if not, as did an additional number 1969 and 2001. But in that same period,
of bankruptcy and magistrate judges. During according to the Bureau of Labor Statistics, the
the 1960s on the other hand, only a handful of Consumer Price Index for urban consumers
Article III judges retired or resigned.” increased 391 percent. Measured in constant
2001 dollars, the salaries of cabinet secretaries
The lag in judicial salaries has gone on too long, have actually declined 44 percent since 1969.
and the potential for diminished quality in During this thirty-two year period, the salaries
American jurisprudence is now too large. Too of cabinet officers have lost more than 50 per-
many of America’s best lawyers have declined cent of their value with respect to the median
judicial appointments. Too many senior judges family income.11
EXECUTIVE PAY COMPARISON
$500,000
$400,000
Salary per year
$300,000
$200,000
$150,000
Annual
$100,000
Compensation
for District
Judges,
Congress,
$0 and EX-2
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Doctoral university salaries taken from “The Chronicle of Higher Education.” Think tank salaries represent those with ≥
$10M in assets, labor union salaries represent those with ≥ $100M in assets, public interest groups represent those with ≥
$10M in assets, community foundations represent those with ≥ $250M, public foundations represent those with ≥ $100M
in assets, private foundations (family) represent those with ≥ $250M in assets, private foundations (independent) represent
those with ≥ $1B in assets, and total average equals the average salary of an executive level officer from the above groups.
These declines in real compensation have real degrees. Most had extensive experience in the
effects. Too many talented people shy away from management of large organizations. Excellence
public service because they have large mortgages in government performance requires excellent
to pay, children in college, or other financial obli- leadership. We must be willing to pay enough
gations that cannot be met on current federal to bring such leaders into public service and to
salaries. Too many others enter public service but keep them there.
stay too briefly for those same financial reasons.
To restore fairness and improve the appeal of
It is difficult to generate public concern about public service, we believe appointees’ salaries
the salaries of senior federal officials because must be raised. They need not equal the salaries
those salaries are higher than the average com- of senior corporate executives or even approach
pensation of workers nationwide. But the com- those. But they should be on a par with the
parison is not apt. The talent and experience compensation of leaders in educational and not-
needed to run large and complex federal enter- for-profit organizations, or even with counter-
prises are not average. Eighty-seven percent of part positions in state or local government. It is
the people appointed by President George W. not unreasonable in our view that a secretary of
Bush in his first year in office had advanced state should be paid a salary that compares with

a university president or that a secretary of edu- “Salaries do matter.
cation should earn what a superintendent of a
large urban school district earns. If you keep cutting and cutting,
you will find the institutional strength

Legislative salaries have shown the same gener-
al decay as executive salaries. Few democracies sapped. You will find it harder
in the world expect so much from their nation-
to attract and keep people.
al legislators for so little in compensation.
Indeed, salaries of members of Congress fall The reputation of the agency will fall.
well below the compensation of the nation’s top
college and university presidents and the execu- The public will become disenchanted.
tive directors of its largest philanthropic foun- It will begin to distrust
dations and charitable organizations. We
believe that members of Congress merit a salary the organization. It will lose interest.
that is commensurate with comparable salaries
As a result, morale within
in the educational and not-for-profit sectors.
the organization falls.”
RECOMMENDATION 10
Congress should break the statutory link Stephen G. Breyer, Associate Justice,
between the salaries of members of Congress U.S. Supreme Court
and those of judges and senior political
appointees.
appointment represents a dramatic increase in
Congress has traditionally tied the salaries of compensation, neither of which is appropriate
senior executive branch employees and federal in itself for public service.
judges to its own. In 1989 the linkage was set
in statute. Given the reluctance of members of We believe that members of Congress are enti-
Congress to risk the disapproval of their con- tled to reasonable and regular salary adjust-
stituents, a phenomenon first seen in 1816, ments, but we fully understand the difficulty
Congress has regularly permitted salaries to fall they face in justifying their own salary increas-
substantially behind cost-of-living increases and es. They must answer to the voters when they
trends in private, educational, and not-for-prof- make such choices, and most of the voters have
it compensation. annual incomes significantly lower than mem-
bers of Congress. Whatever political difficul-
We are aware that recent research suggests that ties they face in setting their own salaries, how-
pay disparities at the middle and lower levels of ever, members of Congress must make the qual-
the federal workforce may be less significant ity of the public service their paramount con-
than previously believed. However, the “pay cern when they consider salary adjustments for
gap” at the top of the salary structure is indis- top officials of the other branches of govern-
putable, as are its consequences in lost morale ment. We believe that executive and judicial
and uncertain accountability. Its consequences salaries must be determined by procedures that
are also clear in the presidential appointments tie them to the needs of the government, not
process, which must increasingly focus on the the career-related political exigencies of mem-
relatively affluent or those for whom an bers of Congress.
Although members of Congress have the power difficulty of congressional salary decisions.
to adjust their own salaries, judges and senior Salaries for leaders of the other branches should
executives do not have such power. Under cur- be based on the compelling need to recruit and
rent law, they are at the mercy of Congress retain the best people possible. Unlinking con-
when it comes to salary adjustments. That gressional salaries from theirs is an important
mercy should not be strained by the inherent first step in accomplishing that.
OPERATIONAL EFFECTIVENESS
IN GOVERNMENT
The federal workforce must be reshaped, and the systems that support it must be rooted in new
personnel management principles that ensure much higher levels of government performance.
As noted earlier, much of Title 5, the section of The simple fact is that many agencies would
the U.S. Code that regulates the public service, perform better if they had greater freedom to
was written at a time when government was com- design personnel recruitment strategies and
posed largely of lower-level employees with rela- define conditions of service, more latitude to
tively routine tasks that required few specialized assemble competitive compensation packages
or advanced skills. The principal purpose of and align compensation policies with perform-
much of the substance of Title 5 is to protect fed- ance criteria, expanded freedom to reorganize
eral workers from political influence, from arbi- to meet emerging needs, and greater authority
trary personnel actions, and from unfair and to use contracted outsourcing when that is the
inequitable treatment compared to other federal most efficient way to meet mission objectives.
workers. Those are important protections to pre-
serve. But they must coexist with a much broad- We clearly recognize the risks in some of these
er recognition of the needs of modern agencies new approaches, especially when they are
to perform missions that are more complex and deployed unevenly. In the development of the
much more specialized than those of the govern- new Transportation Security Agency, for exam-
ment for which much of Title 5 was written. ple, we have seen how greater management and
compensation flexibility in one agency can can-
In recent years, Congress has begun to permit nibalize others that lack that flexibility. Federal
some exceptions to Title 5 constraints for agen- employees act rationally; the best are drawn to
cies facing critical mission challenges or person- environments where their opportunities to
nel needs.12 We believe these experiments have advance in their careers and their compensation
demonstrated beyond a doubt that, in the per- are affected by their performance. When one
formance of mission-related functions, agencies agency follows that principle and another does
often benefit when they are liberated from Title not, employees will naturally be drawn away
5 constraints. And we believe the results of from the latter and toward the former. That is
those experiments should now be extended one reason why we believe it is time to treat
much more broadly across the government. these matters as government-wide issues, not

merely as stopgaps for agencies in distress, to “Ultimately, an effective performance
move from experimentation and testing to broad
implementation of ideas whose time has come. management system
must link pay and incentive programs
RECOMMENDATION 11 to individual knowledge, skills and

More flexible personnel management systems
should be developed by operating agencies to ability, and contributions to achieving
meet their special needs. organizational results.”
We recommend that the General Schedule clas-

David Walker, Comptroller General, U.S.
sification system be abolished. As the U.S.
General Accounting Office
Office of Personnel Management recently
noted, “The resources and effort needed to
maintain the General Schedule system — which with an entirely different form. The goal of all
include developing precisely defined locality agencies must be the same: a commitment to
pay areas and adjustments, establishing and designing a personnel system that best supports
administering special rates, developing and its own mission. But that cannot happen until
applying classification standards and day-to-day we have seen the last of the General Schedule.
pay administration — are substantial….”13 A “Continued reliance on this antiquated system,”
system like the General Schedule that empha- notes Kay Coles James, Director of the Office
sizes internal equity in compensation will of Personnel Management, “is comparable to
always demand constant tinkering to define insisting that today’s offices use carbon paper
“equal work” so that it can ensure “equal pay.” and manual typewriters.”14
Under the pressure for better performance, Consistent with our other recommendations,
movement away from the General Schedule has we envision the development of modern per-
already begun. Nearly 20 percent of nonpostal sonnel management approaches that afford
career federal employees now work under other agencies far more flexibility and responsiveness
personnel systems, many of which were enacted in packaging attractive job offers at the entry
by Congress in response to the particular needs level, while fitting talent to task across the full
of high-impact agencies such as the Federal spectrum of federal activity, permitting lateral
Aviation Administration and Internal Revenue movement within the government and between
Service. Again, the President’s proposal for a new government and the private sector recognizing
Department of Homeland Security illustrated the and rewarding performance.
desire for a much greater degree of discretion
over salaries, hiring, and disciplinary action.
RECOMMENDATION 12
As a default system, we recommend a “broad- Congress and the Office of Personnel
band” system under which the 15 pay grades Management should continue their efforts to
and salary ranges would be consolidated into six simplify and accelerate the recruitment of fed-
to eight broad bands with relatively wide salary eral employees.
ranges. Mangers would be able to determine
individual pay based on competence and per- Recruitment to federal jobs is heavily burdened
formance. Other agencies might adopt systems by ancient and illogical procedures that vastly
PROMISING APPROACHES TO PERSONNEL REFORM
Voinovich / Akaka Personnel Policy Reforms
The following personnel reforms were proposed by Senator George V. Voinovich and Senator Daniel
K. Akaka and included in the Homeland Security Act.
1) Establishes a Chief Human Capital Office at each major agency to oversee recruitment, retention,
and training efforts and raise the profile of human capital needs within agencies.
2) Establishes an interagency council of Chief Human Capital Officers to exchange best practices.
3) Gives agencies the choice of placing job applicants in categories, such as basically qualified, highly
qualified, and superior, rather than being limited to considering only the top three applicants.
4) Allows agencies to offer up to $25,000 in buyouts and use early retirement packages in the exec-
utive and judicial branches to reshape workforces to correct skills imbalances.
5) Expands the ability of agencies to pay for job-related training, including studies leading to an aca-
demic degree.
6) With certain preconditions, allows senior managers to receive their full performance bonus in a
single year, rather than having to spread it over two years.
7) Requires that human capital planning activities be included in annual agency performance and
management reports mandated by the Government Performance and Results Act.
8) Allows agencies to hire candidates directly and bypass current Title 5 requirements once OPM has
determined that there is a severe shortage of candidates for the position.
9) Eases restrictions on the placement of National Security Education Program (NSEP) participants
by allowing fellows to meet their service requirement by working in non-national security posi-
tions in the federal government, if national security positions are not available.
10) Repeals ineffective recertification requirements for Senior Executives.
11) Provides federal employees compensatory time off for official travel.
SOURCE: These provisions were included in an amendment to H.R. 5005, to establish a Department of Homeland Security,
when it was ordered reported to the full Senate by the Senate Governmental Affairs Committee. Senator Daniel K. Akaka
(D-Hawaii) was Chairman of the Subcommittee on International Security, Proliferation and Federal Services of the Senate
Governmental Affairs Committee. Senator George V. Voinovich (R-Ohio) was Ranking Member of the Senate Governmental
Affairs Subcommittee on Oversight of Government Management, Restructuring and the District of Columbia.

PROMISING APPROACHES TO PERSONNEL REFORM
Office of Personnel Management Initiatives to Modernize Federal Personnel Practices
OPM manages government wide the Human Capital Initiative of the President’s Management
Agenda.
1) Held government’s first “virtual job fair” in April 2002, which drew more than 20,000 applications
for 270 available jobs.
2) Enhanced the USAJOBS website to make the system more user-friendly and helpful for those
seeking jobs in the federal government.
3) Instituted a multipronged approach to utilizing e-government technology to assist job seekers and
employees government wide. Components include the improved USAJOBS website,
e-Clearance, e-Training, Enterprise HR Integration, and e-Payroll.
4) Provided agency customers with tools and advice to help recruit, hire, and retain quality employ-
ees; train and develop workforces; and manage performance.
5) Initiated a project to assist agencies in identifying and utilizing personnel flexibility provided in
current law.
6) Initiated an interagency project to modernize federal job vacancy announcements. Over 350 col-
leges were enlisted to participate in a national “Call to Serve.”
7) Undertook a major review and critique of the federal pay structure, preparatory to formulating
recommendations for modernization.
SOURCE: Kay Coles James, Testimony before the National Commission on the Public Service, July 2002.
complicate the application process and limit the Agencies have been burdened for decades by
hiring flexibility of individual managers. A col- the “rule of three,” which required agencies to
lege graduate applying for a federal job con- hire only from among the top three candidates,
fronts a complex and lengthy application form chosen through a rigid scoring system. Only in
demanding far more information than any November 2002, with the enactment of the
employer reasonably needs. The very nature of Homeland Security Act, was this counterpro-
the application deters applicants. ductive process reformed. Now agencies gov-
ernment wide will be allowed to establish
College campuses should be prime recruiting broader categories of applicants from which to
sites for federal agencies. Recently OPM and choose the individual who will best fulfill the
individual agencies have initiated programs to needs of the job.
compete for talented graduating men and
women, but as the personal anecdotes in the We note that the government recruits most
appendix indicate, government must do more effectively when it recruits most specifically.
and do it better. And it appeals most to talented applicants when
it recruits for clear and compelling missions. “So we must decide:
What sells in the employment marketplace is
the appeal of a specific job to perform specific Are we going to continue to respond
tasks for specific rewards. Bright young people to the pay crisis agency by agency,
will be more interested in microbiological
investigation of a particular disease, managing occupation by occupation,
foreign aid for a particular part of the world, or
running from one fire to another,
bringing work to unemployed single mothers
than to “working for the federal government.” or are we going to provide
We believe that Congress should provide the
funds necessary for agencies to compete effec- an overall structure within which
tively for the employees they need. we can provide the compensation
necessary to attract and retain

RECOMMENDATION 13
the talented experience we need?”
Congress should establish policies that permit
agencies to set compensation related to current
market comparisons. Carol Bonosaro, President,
Senior Executives Association
Proper adjustment of public service compensa-
tion is a conundrum as old as the Republic.
Broad satisfaction with the way compensation recent years to allow them to hire and retain
decisions are made has always been elusive. But employees in the face of demanding market con-
rarely has the compensation system been as ditions. In each case where those flexibilities
misaligned as it is now. As noted earlier, recent have been granted, the recruitment and reten-
research suggests that the pay gap between fed- tion crises have been brought under control and
eral employees and their private sector peers is the long-term personnel management prospects
not consistent across all pay levels and all occu- for the agency have brightened considerably.
pations. However, the pay gap in hard-to-
recruit positions, from engineering to acquisi- We believe those have been valuable lessons
tions, remains a significant barrier to recruit- and should be extended throughout the govern-
ment and retention. ment. The goal of internal equity, which has
dominated federal compensation practices for
Repairing the system requires a reconsideration more than a century, still has a place in some
of first principles. That will require firm estab- aspects of the personnel process. But it must be
lishment of the notion that markets must play a balanced more thoughtfully now with the exter-
larger role in setting compensation. Individual nal equity that is increasingly important to
agencies need greater freedom to determine the many agencies seeking to hire or retain employ-
relevant market for their employees, to adjust ees with rare or unusually valuable skills in highly
their compensation to its exigencies, and to con- competitive markets. As noted earlier, any sys-
nect pay to performance. tem adopted must be grounded in long held
merit system principles.
In fact, we have already begun to move in that
direction. A number of agencies have been What are the relevant markets for most federal
granted critical compensation flexibility in employees? The Commission does not believe

that the federal government needs to match RECOMMENDATION 14
salaries of corporate managers in most instances Competitive outsourcing should follow clear
to ensure a quality workforce. The proper mar- preset standards and goals that advance the
ketplace comparisons will more often be with public interest and do not undermine core
the independent sector: with universities, think competencies of the government.
tanks, and nonprofits rather than with business
corporations. As one of our witnesses suggest- The issue of who does the work of government
ed, the federal government should be able to has become a leading source of labor-manage-
compete with the dot-edus and the dot-orgs, ment conflict. Recent years witnessed
but not with the dot-coms. increased interest in allowing private firms to
compete for work currently being done by fed-
Ceilings imposed by Congress for many years eral employees. Competitive outsourcing may
have created tight compression of salaries at the be needed, for example, to acquire additional
top of all three branches of government. skills, to augment capacity on an emergency or
Currently, approximately 70 percent of the temporary basis, and to save money on goods and
Senior Executive Service receive exactly the services that are not inherently governmental.
same compensation due to compression. This is
deeply discouraging to the government’s most Whether it is called competitive sourcing,
talented civil servants, and as Carol Bonosaro, strategic sourcing, outsourcing, contracting out,
the President of the Senior Executives or privatization, the general hope is that private
Association, testified, many of them “plan to competition can bring both cost savings and
retire as soon as they’re eligible because they are higher performance in certain functions such as
demoralized by the failure to address pay, and information technology services or facilities
they can’t resist attractive offers from private maintenance. While we see many virtues in the
industry.” competition that outsourcing can bring, we are
also concerned that when competitive sourcing
is perceived as unfair or for the purpose of
“The public sector should mirror reducing the government workforce, it breeds
mistrust and undermines employee morale.
those organizations in
Whether work is performed by government or
the private sector who appreciate
contracted to the private sector, it should be
that the most valuable organizational overseen with high performance and trans-
parency standards.
asset is the workforce itself
and who recognize
that you get what you pay for.”
Darryl Perkinson, President, Federal Managers

Association, Mid-Atlantic Region
INTERIM STEPS TOWARD
IMPLEMENTATION
We recognize that these recommendations are 4. Congress, the Office of Personnel
sweeping in scope and cannot all be implemented Management, and individual agencies should
at one time. Some will require planning and continue their efforts to simplify and mod-
study prior to presidential and congressional ernize the recruitment of federal employees.
action. Implementation of the broad reorgani-
zation activity in this report will not be the Proposals to accomplish these four interim rec-
work of months or a single session of Congress; ommendations have been considered by both
it should be an agenda for years. the Executive branch and Congress during
recent legislative sessions. We believe that
There are, however, steps that can and should quick action on these proposals is possible and
be taken promptly and which will create the will demonstrate the value of further progress
momentum necessary for a longer period of on our other recommendations.
needed reform.
Lastly, planning and specific decisions with
1. The President should be given expedited respect to large department and agency reor-
authority to recommend structural reorgani- ganizations will logically fall within the compe-
zation of federal agencies and departments. tence of OMB and OPM. This development
process will take a concerted ongoing effort and
2. The President and Congress should develop a involve Congress, affected agencies, and the
cooperative approach to speeding and stream- public. The sense of this Commission is that
lining the presidential appointments process. the Administration and the Congress might tap
the resources and expertise of non-governmen-
3. Congress should grant an immediate and tal public service organizations for assistance
significant increase in judicial, executive, and and support. Several such organizations assisted
legislative salaries to ensure a reasonable the Commission and are cited herein. We rec-
relationship with other professional opportu- ommend that a continuing advisory board
nities. Its first priority in doing so should be drawn from these groups be established forth-
an immediate and substantial increase in with to assist in this process and to encourage
judicial salaries. continuing reform.

CONCLUSION
merica begins the 21st century with a national government that is ill suited to the crit-
A ically important challenges that confront us. We have already seen how structural
and personnel deficiencies have left our intelligence and security operations vulnera-
ble to devastating attack. In many other areas of government responsibility — health care, envi-
ronmental protection, Social Security — our capacities are similarly threatened. Across the gov-
ernment, in one functional area after another, we find the same persistent problems: organizational
structures and personnel policies that are inconsistent with and thwart important public missions.
We must recognize the magnitude of those problems and move boldly to fix them.
We have sought in this report to point the way to a modern, revitalized federal government. The
government we envision, the government America so clearly needs, would look like this: Federal
operations would be organized within fewer departments with lean, senior management levels,
composed of operating agencies sharing similar substantive responsibilities. Government leaders
would have the necessary flexibility to shape their organizations and management processes to fit
the substantive tasks assigned to them. Federal personnel policies would be designed to attract and
retain energetic and creative employees, to permit their talents to flourish, to be free of the drag of
poor performers, and to imbue federal employees with pride in their service to the public.
The government we envision would be organized around critical missions, with management keyed
to performance. It would be a dynamic government, prepared to meet the multifaceted and evolv-
ing needs of a complex modern society. Federal employment would appeal to highly competent
people because it would encourage and reward their best efforts. This would not be a bigger gov-
ernment, but it would be a better government.
We do not underestimate the scope and challenge of this task, but neither are we daunted by it.
Reorganizing a government as large and old as ours and redesigning personnel polices so deeply
ingrained will take time and the steady commit- The world beyond our shores now confronts us
ment of our national leaders. It is task for all of with unprecedented opportunities and grave
us–for the President, for Congress, for members danger. We cannot wait until the price of delay
of all political parties, for private citizens every- is one we cannot survive.
where who understand that only a government
that is very good, is good enough. We recognize that we may not have all the
answers, or all the ideal ones, but we are con-
The need could not be more urgent. We pay a vinced that our nation can wait no longer.
high price every day we fail to act. That price Fundamental change must become a high prior-
grows with each passing year, as expectations of ity for the President and Congress.
government exceed government capacity. Our Encouraging and supporting that change must
country grows steadily in population and diver- become a high priority for American citizens.
sity. Escalating demands are placed on limited
resources. The biggest generation in American This is a vital responsibility for all of us.
history approaches retirement with longer life It deserves our most urgent and profound
expectancies than ever before in human history. commitment.

END NOTES
1 Paul C. Light, “To Restore and Renew,” Government Executive Magazine, November 2001.
2 Office of Personnel Management, A Fresh Start for Federal Pay: The Case For Modernization, (OPM White
Paper, April 2002, p.22).
3 Office of Personnel Management, Senior Executive Service, “Recertification Assessment — 1997”
(http://opm.gov/ses/recertifyintro.html).
4 Paul C. Light, The Troubled State of the Federal Public Service, Washington: Brookings Institution, June 27, 2002.
5 Senate Governmental Affairs Committee, Subcommittee on Oversight of Government Management,
Restructuring and the District of Columbia. (S. Hrg. 107-210, October 10, 2001 and S. Hrg. 106-366,
August 4, 1999).
6 Senator Fred Thompson, Chairman, Committee on Governmental Affairs, United States Senate,
“Government at the Brink: Urgent Federal Management Problems Facing the Bush Administration,” June
1, 2001.
7 Report of the U.S. Commission on National Security/21st Century (February 2001).
8 Transcript of final hearing of Joint Congressional Committee (October 8, 2002).
9 Senate Governmental Affairs Committee, compiled from First Annual Report to the President and the
Congress of the Advisory Panel to Assess Domestic Response Capabilities for Terrorism Involving
Weapons of Mass Destruction, Assessing the Threat, Appendix 1 (December 15, 1999) and Office of
Management and Budget, Annual Report to Congress on Combating Terrorism (August 2001).
10 A confidential survey conducted by the Administrative Office of the U.S. Courts, September 2002.
11 Gary Burtless, How Much Is Enough? Setting Pay for Presidential Appointees, a report of The Presidential
Appointee Initiative, Brookings Institution, March 22, 2002.
12 Examples of new approaches to personnel management are in the Appendix.
13 Office of Personnel Management, A Fresh Start, p. 46.
14 Kay Coles James, testimony before the National Commission on the Public Service, July 15, 2002.
APPENDIX
THE GOVERNMENT AT WORK
EXAMPLES OF Examples of this phenomenon and its impact on
JURISDICTIONAL CHAOS the government’s ability to accomplish its
responsibilities are legion. Just a few of them
The federal government is a flotilla of many dis- are highlighted below.
tinct organizational units. Virtually every year
new vessels are added to respond to the
OVERLAP AND DUPLICATION IN
demands of the time. Occasionally, in response FEDERAL PROGRAMS
to a broadly perceived national emergency, the
vessels are regrouped. The Department of Prior to the post 9/11 reorganizations, over 40
Homeland Security is a case in point, as was the federal agencies were involved in activities to
Department of Energy when it was created in combat terrorism.
the late 1970s. Virtually never are they com-
bined to eliminate program duplication. The Department of Housing and Urban
Development operates 23 self-sufficiency and
Missions are not realigned or even rationalized. economic opportunity programs that target ten-
Program laps upon program. Responsibilities ants of public housing and other low-income
are not coordinated. clients.
Moreover, while for most of its history our gov- Responsibility for federal drug control strategies
ernment has grown and evolved on an issue-by- and their implementation is fragmented among
issue and “need to” basis, the Hoover more than 50 federal agencies.
Commission of 1949 stands — fifty-three years
later —as the sole serious effort to keep the parts There are over 90 early childhood programs scat-
from undermining the mission of the whole. tered among 11 federal agencies and 20 offices.
Nine federal agencies administer 69 programs
These phenomena have resulted in a virtually supporting education and care for children under
unmanageable tangle of government activities. age five.
In those areas where there is a clear and readily
definable program goal, such as getting benefit There are 342 federal economic development-
checks out, the work gets done, albeit with related programs administered by 13 of the 14
varying degrees of efficiency and often with cabinet departments
considerable waste of personnel and program
funds. In all too many cases, however, one pro- Seven agencies administer 40 different pro-
gram’s goals are intertwined with those of simi- grams that have job training as their main
lar programs. Cross-program communication purpose. At least 86 teacher-training programs
and coordination rarely takes place. Programs in nine federal agencies fund similar types of
that no longer serve a good purpose — or services.
which are inferior in impact to others with sim-
ilar goals — continue on, never to be merged Four agencies are responsible for federal land
with those that are doing a viable job. management.

Over 200 different programs operated by 23 water, and better waste management programs.
agencies have provided assistance to countries As the chart on the next page illustrates, these
formerly part of the Soviet Union. divided responsibilities have produced 541 sepa-
rate areas of program activity. Given that most
There are 50 homeless assistance programs federal efforts to protect and improve the envi-
administered by eight agencies. ronment are regulatory in nature, the opportunity
for duplicative or counterproductive regulatory
SOURCE: Senator Fred Thompson, Chairman,
Committee on Governmental Affairs, “Government at the
requirements is significant. Finally, the IG’s report
Brink,” June 2001. notes that EPA’s budget of over $7 billion is only
18 percent of federal spending on environmental
and natural resource programs and that, “there-
Obviously, this situation has a negative impact fore, the achievement of EPA’s broad goals cannot
on program performance. For example, there be accomplished without the coordinated and
are over 90 early childhood programs in 11 fed- collaborative efforts of many federal partners.”
eral agencies and 20 offices. The system of mul-
tiple early childhood programs with firm cutoffs CASE EXAMPLES OF
could lead to disruptions in services from even ENTRY-LEVEL HIRING IN
slight changes in a child’s family status. While THE CIVIL SERVICE
multiple programs target disadvantaged pre-
school children, most such children do not par- Three applicants, all with graduate degrees,
ticipate in any preschool program. [General describe the Federal application process.
Accounting Office, “Management Reform:
Continuing Attention Is Needed to Improve General Statements
Government Performance,” May 4, 2000.] “In almost all of the cases [of applying for a fed-
eral job], I found the process to be frustrating,
Of even more critical concern is the September time-consuming, and, even on some level,
19, 2002 report of the Joint Inquiry Committee bewildering.”
of the Congressional Intelligence Committees
examining the September 11, 2001 terrorist “It seems to me, the more one tries to get in [to
attacks on the United States. A major conclu- the federal service], the more barriers that are
sion of the investigators was that a failure of put up to prevent it. It almost seems like a test
communication and coordination within and — how much is a person willing to go through
among our intelligence agencies had greatly to get this job?”
hampered their ability to assess the danger
posed by al-Qaeda terrorists. “With the time it takes to even apply and then
play the wait and see game, is it any wonder so
In a recent effort to address the performance many people don’t even consider applying to
problems created by dysfunctional organization, the federal government for work?”
the Inspector General of the Environmental
Protection Agency undertook a study to examine “Just thinking about writing separate essays on
the degree to which other agencies share EPA’s every KSA (knowledge, skills, and abilities)
responsibilities for protecting our environment. question for each application to the federal gov-
In September 2002, the IG issued a report docu- ernment, knowing that I probably will never
menting that 29 agencies collectively share hear back about my application, makes me re-
responsibility for federal clean air, clean and safe think my desire to serve in the federal service.”
SHARED FEDERAL RESPONSIBILITY FOR ENVIRONMENTAL PROTECTION
Participation
(No. of Programs/Activities Identified)
Federal Departments and Agencies Air Water Waste Totals
Department of Agriculture 16 73 6 95
Department of Interior 9 68 12 89
Department of Transportation 36 12 14 62
Department of Commerce 13 33 6 52
Department of Defense 7 21 18 46
Department of Energy 22 5 16 43
Department of Health and Human Services 14 14 12 40
Tennessee Valley Authority 19 8 0 27
Department of Justice 0 1 15 16
National Aeronautics and Space Administration 9 2 1 12
National Science Foundation 3 3 1 7
Federal Emergency Management Agency 0 0 6 6
Office of Science and Technology Policy 5 0 0 5
Department of Treasury 0 0 5 5
Housing and Urban Development 1 3 1 5
State Department 1 0 4 5
Postal Service 0 4 0 4
Nuclear Regulatory Commission 0 1 2 3
National Academy of Sciences 2 1 0 3
Small Business Administration 0 2 1 3
General Services Administration 0 2 1 3
Department of Labor 1 0 1 2
Agency for International Development 0 2 0 2
Federal Housing Finance Board 0 0 1 1
Veterans Affairs 0 0 1 1
Joint Subcommittee on Aquaculture 0 1 0 1
North American Research Strategy for
Tropospheric Ozone 1 0 0 1
International Boundary and Water Commission 0 1 0 1
Endocrine Disruptor Screening and
Testing Advisory Committee 0 1 0 1
SOURCE: President’s Council on Integrity and Efficiency, Compendium of Federal Environmental Programs,
September, 2002.

Federal Recruiting Efforts ra of information, which by itself can be very
“I understand that it might not always be possi- frustrating. However, this combined with the
ble to interview interested applicants on the general inertia of paperwork moving through the
spot, but what is the point of going to a career system is enough to make anyone forgo an
fair if all an agency is going to do is refer peo- attempt at working for the government.”
ple to their website?”
Trying to apply for two separate job announce-
“Conversely, the private organizations I met with ments at the Application to Defense Finance
took my resume, did some quick Q & A, and and Accounting Service-Designated Examining
passed the information along to their HR depart- Unit (DFAS-DEU): “Now I don’t know about
ment, who in turn called me within a week.” the rest of the applicants, but if Monster.com,
Hotjobs.com, and USAJOBS.com can allow
“I studied at a state university for a BS and then one to save and edit resumes, I would think it
attended a private university for graduate would be possible for the DFAS-DEU to allow
school to obtain an MPA, and it still amazes me the same for its applicants.”
that I never saw recruitment efforts by the fed-
eral government other than their presence at “This [having to reinput resume information for
career fairs where potential applicants were each specific job announcement] is just another
referred to their website.” ‘barrier to entry’ into the federal civil service
that needs to be taken down.”
Federal Application Process
“Trying to circumvent the lengthy and over- “A very frustrating problem is the fact that most
whelming federal application process, I applied of the professional-level positions listed there
and was nominated to be a Presidential [USAJOBS.com] do not have a link where
Management Intern from the graduate school I someone can send their electronic resume
attended (only 10 percent of the graduating stored on the website. What is the point of hav-
MPA/MPP class can be nominated). ing applicants create the online resume if it is
Unfortunately, after going to an all-day test never going to be used?”
provided by OPM, I was notified that I had not
passed, and only 400 postgraduate students “There are jobs, with the U.S. Border Patrol and
from across the country are accepted into the FEMA [Federal Emergency Management
program. With numerous reports stating that Agency], that I started the application process
our country is facing a looming retirement for over a year ago and have been told to expect
bulge, shouldn’t the number of PMI invitees be to wait even longer. In other cases, I have never
a little larger? The PMI program may be a good heard from some agencies that I applied to or,
initiative to bring new and fresh talent into fed- after contacting someone there to follow up,
eral service, but a mere 400 people country- have never had my phone calls returned.”
wide isn’t enough to solve the federal govern-
ment’s problems.” Written statement after applying for a budget
officer position in Anniston, Alabama: “I was
“In almost all of the [federal] jobs I have applied told by the human resources person I spoke
for, it has been necessary to fill out separate with that there were in excess of 300 applicants
lengthy applications, background information, for this one position and some 55 phrases that
and other materials. This process is very time- the selecting official required the automated
consuming and often requires gathering a pletho- system to key on. This is ridiculous. Those 55
phrases (requirements, to me) weren’t even Office of Personnel Management (OPM)
known to the applicants….If you don’t know Authority to review position classification
exactly what they [human resource personnel] decisions.
are looking for, how can you compete with
someone who may already have that informa- Equal Employment Opportunity Commission
tion? It does appear pretty ludicrous to me.” (EEOC)
Authority to adjudicate Federal employee com-
Results plaints of discrimination.
“In my case, I have become fed up with the
process and have decided to pursue opportuni- Today, executive branch civil servants are afford-
ties in the private sector.” ed opportunities for redress at three levels: first,
within their employing agencies; next, at one or
“If the process is not streamlined, government more of the central adjudicatory agencies; and
agencies will continue to be unable to attract finally, in the federal courts. Although one of the
talented individuals to careers in public service.” purposes of the Civil Service Reform Act of 1978
was to streamline the previous redress system,
“I’m seriously considering giving up [applying the scheme that has emerged is far from simple.
for a federal job] altogether. There are simply Today, four independent agencies hear employee
too many barriers to overcome…” complaints or appeals. The Merit Systems
Protection Board (MSPB) hears employee
FEDERAL EMPLOYEE appeals of firings or suspensions of more than 14
APPEAL PROCESS days, as well as other significant personnel
actions. The Equal Employment Opportunity
Appellate Bodies Commission (EEOC) hears employee discrimi-
Merit Systems Protection Board (MSPB) nation complaints and reviews agencies’ final
Responsible for appeals from major disciplinary decisions on complaints. The Office of Special
actions and other adverse actions. (Bargaining Council (OSC) investigates employee com-
unit employees may appeal these actions plaints of prohibited personnel actions — in par-
through a negotiated grievance procedure with ticular, retaliation for whistle-blowing. For
binding arbitration.) employees who belong to collective bargaining
units and have their individual grievances arbi-
Office of Special Counsel (OSC) trated, the Federal Labor Relations Authority
Investigates “prohibited personnel practices,” (FLRA) reviews the arbitrators’ decisions.
e.g., denying employment for political reasons
and nepotism, Hatch Act violations, and whistle- While the boundaries of the appellate agencies
blower complaints. may appear to be neatly drawn, in practice these
agencies form a tangled scheme. One reason is
Federal Labor Relations Authority (FLRA) that a given case may be brought before more
Broad authority for federal labor-management than one of the agencies — a circumstance that
relations program, including adjudicating dis- adds time-consuming steps to the redress
putes between agencies and unions with exclu- process and may result in the adjudicatory agen-
sive bargaining rights, resolving appeals of arbi- cies reviewing each other’s decisions. Matters
tration awards, investigating and prosecuting are further complicated by the fact that each of
unfair labor practice charges, and resolving the adjudicatory agencies has its own proce-
negotiation impasses. dures and its own body of case law. All but

OSC offer federal employees the opportunity narrow classifications to broader pay bands
for hearings, but all vary in the degree to which enabled it to retain a higher number of good
they can require the participation of witnesses performers.
or the production of evidence. They also vary
in their authority to order corrective actions Department of Agriculture. The Forest Service
and enforce their decisions. and the Agricultural Research Service used a
demonstration program to streamline hiring by
What’s more, the law provides for further review eliminating the “rule of three” and hiring from
of these agencies’ decisions — or, in the case of broader groups of applicants. After five years,
discrimination claims, even de novo trials — in the number of applicants had grown, hiring
the federal courts. Beginning in the employing speed increased, and there was more satisfaction
agency, proceeding through one or more of the with the hiring process among applicants.
adjudicatory bodies, and then carried to conclu-
sion in court, a single case can take years. GSA. Stephen A. Perry, Administrator, United
SOURCE: United States General Accounting Office, Federal States General Services Administration, advo-
Employee Redress: A System in Need of Reform, (April 1996). cates the use of existing workplace flexibility by
posting the authorities on the agency’s Intranet.
NEW APPROACHES TO This provides managers with the information
PERSONNEL they need to determine where and when the use
MANAGEMENT of these authorities is appropriate. A variety of
flexible alternative work schedules and work-
OPM. Numerous demonstration projects, place arrangements is available in two cate-
approved by OPM, have succeeded in allowing gories: compressed work schedules and flexible
agencies flexibility in hiring during difficult work schedules. An example of compressed
market conditions. The first personnel demon- work schedule flexibility is the ability of an asso-
stration project after completion of the Civil ciate to work 80 hours within nine or eight work-
Service Reform Act of 1978 was the department days instead of the traditional 10 days. With
of the Navy’s “China Lake” demonstration proj- flexible work schedules, managers may offer
ect. Here the Navy established performance- associates various arrival and departure times.
based pay systems, increased flexibility in start-
ing salaries, and broad-banded pay structures IRS. The IRS Restructuring and Reform Act of
for 10,000 employees. OPM’s review of the 1998 mandated a comprehensive, customer-
China Lake project found significant improve- based reorganization of the IRS. The act
ment in recruitment and retention of high per- allowed for numerous human resource flexibili-
formers because of the Navy’s ability to meet ties, with OPM oversight, to help implement
market challenges for personnel. the revised organizational structure and to pro-
mote new approaches to compensation and
NIST. In 1988 the National Institute of staffing. Provisions were included to allow hir-
Standards and Technology started a demonstra- ing at “critical pay” levels (i.e., up to the salary
tion project broadly aimed at recruiting high- of the Vice President) so that the agency could
quality personnel and retaining good performers. attract key executives from outside government
Through greater flexibility in hiring, the NIST into critical leadership positions. The act also
gained freedom to adjust starting salaries, gave the IRS the authority to redesign its hiring
encouraging more talented applicants. NIST mechanisms for technical employees, which
also found that changing its pay system from they used to create a ranking system based on
categories of employees rather than the “rule of discrimination. The FAA chose to follow cer-
three.” Using the flexibilities in the act, IRS tain other parts of Title 5, including those that
established new career paths for employees who covered merit principles and prohibited person-
wanted to move up in rank but not enter man- nel practices. All FAA employees were covered
agement, redesigned its performance manage- by pay-for-performance and pay-band provi-
ment system, created a broad-banded pay system sions. Air traffic control regulations also allow
for senior managers, and used its authority to for collective bargaining for pay for controllers.
reshape its workforce during the reorganization.
GAO. Significant reforms were allowed leg-
FAA. The FAA introduced a new agency human islatively for the General Accounting Office. In
resource management system in April 1996 after the mid-1980s, legislation was enacted to allow
it was authorized by the 1996 Department of GAO to institute pay bands, thus allowing more
Transportation Appropriations Act. The flexible staffing. Later, additional legislative
reforms were developed to meet the unique and administrative flexibility allowed improve-
human resource needs of the FAA and provide ments in the areas of recruitment, training, pro-
greater flexibility for hiring, training, compen- motions, bonuses, and dealing with poor per-
sating, and deploying personnel. The 1996 leg- formers. Additional flexibility that Congress
islation exempted the agency’s personnel system granted GAO in 2000 allowed early-outs and
from Title 5 of the United States Code, except buyouts to be used for workforce reshaping.
those parts which provide preference for veter- The changes allowed GAO to increase the
ans, protect whistle-blowers, require employees number of reports and testimonies each year
to be loyal to the government, prohibit strikes, and improved the quality of GAO products.
restrict certain political activities, and prohibit

ACKNOWLEDGEMENT OF SOURCES
UTILIZED BY THE COMMISSION
WITNESSES AT ■ Brookings Institution, Presidential

COMMISSION HEARINGS Appointee Initiative: G. Calvin Mackenzie
■ Council for Excellence in Government:
Monday, July 15, 2002 Patricia McGinnis, President and CEO
■ Kennedy School of Government: Steve
■ Chief Justice William H. Rehnquist Kelman, Albert J. Weatherhead III and
■ Associate Justice Stephen G. Breyer Richard W. Weatherhead Professor of Public
■ Kay Coles James, Director of the Office of Management
Personal Management ■ National Academy of Public Administration:
■ David Walker, Comptroller General Bob O’Neill, President
■ Partnership for Public Service: Max Stier,
Wednesday, July 17, 2002 President and CEO
■ RAND Corporation: Susan D. Hosek,
■ Donna Beecher, former director, Office of Senior Economist
Human Resources Management, U.S.
Department of Agriculture Thursday, July 18, 2002
■ Matt Crouch, President, Presidential
Management Alumnae Group ■ U.S. Senator Daniel K. Akaka (D-HI)
■ Constance Berry Newman, Assistant Chairman, Subcommittee on International
Administrator for Africa, U.S. Agency for Security, Proliferation and Federal Services,
International Development. Former Governmental Affairs Committee
Smithsonian Institution Undersecretary; ■ U.S. Senator George V. Voinovich (R-OH)
Director Office of Personnel Management; Ranking Member, Subcommittee on
Assistant Secretary, Department of Housing Oversight of Government Management,
and Urban Development; Commissioner Restructuring and the District of Columbia,
Consumer Product Safety Commission and Governmental Affairs Committee
VISTA Director ■ Congressman Steny H. Hoyer (D-MD)
■ Judge Deanell Reece Tacha, Chief Judge, Ranking Member, Subcommittee on
Court of Appeals, 10th Circuit, and Chair, Treasury, Postal Service and General
Committee on the Judicial Branch, Judicial Government, House Appropriations
Conference of the United States Committee
■ American Federation of Government ■ Congresswoman Connie Morella (R-MD)
Employees: Mark Roth, General Counsel Chair, District of Columbia Subcommittee,
■ Federal Managers Association: Darryl House Committee on Government Reform
Perkinson, President, Mid-Atlantic Region
■ National Treasury Employees Union:
Colleen Kelley, President
■ Senior Executives Association: Carol
Bonosaro, President
INSTITUTIONS dential, thereby contributing to an informed
PROVIDING RESEARCH national legislature. http://www.loc.gov/crsinfo/
AND OTHER
INFORMATION TO THE Council for Excellence in Government
COMMISSION The Council for Excellence in Government
works to improve the performance of govern-
The Commission thanks the following ment and government’s place in the lives and
organizations for their ongoing assistance. esteem of American citizens. The Council
helps to create stronger public sector leadership
Brookings Institution Presidential Appointee and management, driven by innovation and
Initiative focused on results, as well as increased citizen
The Presidential Appointee Initiative operates confidence and participation in government,
on the premise that effective governance is through better understanding of government
impossible if the nation’s most talented citizens and its role. http://excelgov.xigroup.com/
are reluctant to accept the president’s call to
government service. General Accounting Office
http://www.appointee.brookings.edu/ The General Accounting Office exists to sup-
port Congress in meeting its constitutional
Brookings Institution Center for Public Service responsibilities and to help improve the per-
The Center for Public Service is dedicated to formance and ensure the accountability of the
generating ideas that policymakers can use to federal government for the benefit of the
encourage America’s most talented citizens to American people. http://www.gao.gov/
choose a career in the public service, wherever
those careers might be. The Center looks at Kennedy School of Government at Harvard
both the status of the public service and the University
challenges government, nonprofits, and the pri- The Kennedy School of Government prepares
vate sector face in adjusting to today’s highly leaders for service to democratic societies to
diverse, mobile, and less loyal pool of public contribute to the solutions of public problems.
service talent. http://www.ksg.harvard.edu/
http://www.brook.edu/dybdocroot/gs/gs_hp.htm
National Academy of Public Administration
Congressional Budget Office The National Academy of Public
The Congressional Budget Office’s mission is to Administration is dedicated to improving the
provide Congress with the objective, timely, performance of governance systems — the net-
nonpartisan analyses needed for economic and work of public institutions, nonprofit organiza-
budget decisions and with the information and tions, and private companies that now share in
estimates required for the congressional budget the implementation of public policy.
process. http://www.cbo.gov/ http://www.napawash.org/
Congressional Research Service National Association of Schools of Public

The Congressional Research Service is commit- Affairs and Administration
ted to providing Congress, throughout the leg- The National Association of Schools of Public
islative process, comprehensive and reliable Affairs and Administration is an institutional
analysis, research, and information services that membership organization that exists to promote
are timely, objective, nonpartisan, and confi- excellence in public service education. The

membership includes U.S. university programs Written testimony submitted to the
in public affairs, public policy, public adminis- Commission, September 1988.
tration, and nonprofit management.
http://www.naspaa.org/ Bell, Richard W., National President,
Classification and Compensation Society.
Office of Personnel Management Letter submitted to the Commission,
The Office of Personnel Management (OPM) is August 20, 2002.
the federal government’s human resource
agency. The role of OPM is to help agencies Birch, Elizabeth, Executive Director, Human
get the right people in the right jobs with the Rights Campaign. Statement submitted to
right skills at the right time so they can produce the Commission, June 15, 2002.
results for the American people.
http://www.opm.gov/ Birchman, Bruce, Legislative Chairman, Forum
of United States Administrative Law
Partnership for Public Service Judges. Paper submitted to the
The Partnership for Public Service is a nonpar- Commission, June 13, 2002.
tisan organization dedicated to revitalizing the
federal civil service. Bonosaro, Carol, President, Senior Executives
http://www.ourpublicservice.org/ Association. “The Federal Workforce:
Legislative Proposals for Change.” Written
RAND Corporation testimony submitted before the U.S.
The RAND Corporation is a nonprofit institu- Senate Governmental Affairs
tion that helps improve policy and decision- Subcommittee on International Security,
making through research and analysis. Proliferation, and Federal Services, March
http://www.rand.org/ 18, 2002.
PUBLISHED STUDIES AND Castel, P. Kevin, President, Federal Bar

WRITTEN COMMENTARY Council. Statement submitted to the
Commission, October 28, 2002.
Akaka, Daniel K., U.S. Senator. “Civil Service
Reform and the Rights of Federal Chronicle of Higher Education. “Facts and
Employees.” Congressional Record, June 19, Figures.” (http://chronicle.com/stats/990/
2001, at S5767. 2001/results.php3?Carnegie_Type=doc).
American Bar Association and the Federal Bar Culkin, Charles, Executive Director,
Association. Federal Judicial Pay Erosion: A Association of Government Accountants.
Report on the Need for Reform. Washington: Letter submitted to the Commission, July
February 2001. 15, 2002.
Bauer, Francis X., et. al. “A Call for Demaio, Carl D., Adrian Moore and Vincent
Competency: Report to the [First] Badolato. Designing a Performance-Based
National Commission on the Public Competitive Sourcing Process for the Federal
Service by the Education, Training and Government. Reason Foundation and
Development Task Force of the Performance Institute, October 2002.
Management Development Center.”
Eisner, Neil, Chair, Section of Administrative Jones, Reginald M., President, Council of
Law and Regulatory Practice, American Former Federal Executives. Letter submit-
Bar Association. Letter submitted to the ted to the Commission, July 19, 2002.
Commission, October 9, 2002.
Light, Paul C. The True Size of Government.
Feinberg, Wilfred, Circuit Judge, U.S. Court of Washington: Brookings Institution, 1999.
Appeals for the Second Circuit. Written
testimony submitted to the Commission, Mackenzie, G. Calvin. Scandal Proof.
July 9, 2002. Washington: Brookings Institution, 2002
Guttman, Dan, “Who’s Doing Work for Mecham, Leonidas Ralph, Secretary, Judicial
Government? Monitoring, Accountability Conference of the United States. Letter
and Competition in the Federal and submitted to the Commission, June 14,
Service Contract Workforce.” Written tes- 2002.
timony submitted before the U.S. Senate
Committee on Governmental Affairs, National Academy of Public Administration.
March 6, 2002. Report of the Panel for the National
Commission on the Public Service, July
Hirshon, Robert E., President, American Bar 2002.
Association. “Statement on the Need for
Judicial Pay Reform Submitted to the National Academy of Public Administration.
National Commission on the Public Report on the Senior Executive Service
Service.” Paper submitted to the prepared for the Office of Personnel
Commission, July 2002. Management, December 2002.
Hofmeister, Kent S., National President, Nickles, Steve, Chairman, Personnel and
Federal Bar Association. Letter submitted Organization Committee, IRS Oversight
to the Commission, October 17, 2002. Board. Letter submitted to the
Commission, July 3, 2002.
Ink, Dwight, President Emeritus, Institute of
Public Administration. “Suggestions for President’s Council on Integrity and Efficiency.
Consideration of the National “Compendium of Federal Environmental
Commission of the Public Service.” Paper Programs.” September 1, 2002.
submitted to the Commission, July 2002. (http://www.epa.gov/oigearth/index.htm,
October 15, 2002).
Jacobson, Louis, “Soaring Salaries.” National
Journal, Vol. 13, March 30, 2002, pp. Price, Jeff, President, National Association of
919-930. Disability Examiners. “Challenges Facing
the New Commissioner of Social
Jolly, E. Grady, President, Federal Judges Security.” Written testimony submitted
Association. Letter submitted to the before the U.S. House of Representatives
Commission, July 2, 2002. Subcommittee on Social Security and
Human Resources, May 2, 2002.

Procurement Round Table. “Statement of the U.S. Office of Policy and Evaluation, Merit
Procurement Round Table to the National Systems Protection Board. The Federal Merit
Commission on the Public Service.” Paper Promotion Program: Process vs. Outcome.
submitted to the Commission, July 12, 2002. Government Printing Office, December
2001.
Rosen, Bernard. Letter submitted to
Commission, August, 29, 2002. U.S. Railroad Retirement Board. Examining the
Inefficiencies of the Federal Workplace:
Shiffert, Sarah, Senior Director of Association Recommendations for Reform. Government
Services, International Personnel Printing Office, July 2002.
Management Association. “A Call to
Action: A Coalition on the Future of the Voinovich, George V., Chairman,
Federal Human Resource Management Subcommittee on Oversight of
Profession.” Paper submitted to the Government Management, Restructuring,
Commission, July, 2002. and the District of Columbia,
Governmental Affairs Committee. Report
Thompson, Fred, Chairman, U.S. Senate to the President: The Crisis in Human Capital.
Governmental Affairs Committee. Government Printing Office, December
Government at the Brink. Vol. I and II: An 2000.
Agency by Agency Examination of Federal
Government Management Problems Facing the Walker, David M., Chairman, Commercial
Bush Administration. Washington: Activities Panel. Improving the Sourcing
Government Printing Office, June 2001. Decisions of the Government: Final Report. April
30, 2002.
U.S. Congressional Budget Office. CBO
Memorandum: Comparing the Pay and Benefits of ORGANIZATIONS AND
Federal and Nonfederal Executives. Government INDIVIDUALS
Printing Office, November 1999. CONTRIBUTING TO THE
COMMISSION’S
U.S. Office of Personnel Management. A Fresh KNOWLEDGE
Start for Federal Pay: The Case for Modernization.
Government Printing Office, April 2002 The Commission wishes to acknowledge the
(www.opm.gov/strategiccomp/whtpaper.pdf, additional following organizations and individ-
October 15, 2002). uals who have contributed to its knowledge
and understanding of the issues impacting the
U. S. Office of Personnel Management, Center public service.
for HR Innovation. Human Resources
Flexibilities and Authorities in the Federal American Bar Association, Section of
Government. July 25, 2001. Administrative Law and Regulatory Practice
U.S. Office of Policy and Evaluation, Merit Carolyn Bann, Dean, University of Pittsburgh
Systems Protection Board. Making the Graduate School of Public and
Public Service Work: Recommendations for International Affairs
Change. Government Printing Office,
September 3, 2002.
Carol A. Bonosaro, President, Senior Leonidas Ralph Mecham, Director, and Steven
Executives Association M. Tevlowitz, Assistant General Counsel,
Administrative Office of the United States
Michael Brintnall, Executive Director, The Courts
American Political Science Association
Robert E. Moffit, Director, Domestic &
David S. C. Chu, Under Secretary of Defense Economic Policy, Heritage Foundation
for Personnel and Readiness
Beth Moten, Director, Legislative and Political
Coalition for Effective Change Affairs Department, American Federation
of Government Employees, AFL-CIO
Marion F. Connell, Executive Director, Public
Employees Roundtable National Conference of Bankruptcy Judges
Council on Foundations Kathryn Newcomer, Chair, Department of

Public Administration, the George
Mortimer L. Downey III, Chairman of the Washington University
Board, National Academy of Public
Administration Organization of Professional Employees of the
U.S. Department of Agriculture
Maureen Gilman, Director of Legislation, and
Susan L. Shaw, Deputy Director of James Pfiffner, School of Public Policy, George
Legislation, National Treasury Employees Mason University
Union
Procurement Roundtable
Dennis G. Green, President, Federal Magistrate
Judges Association Anthony C. E. Quainton, President and CEO,
National Policy Association
Mary Hamilton, Executive Director, American
Society of Public Administration David H. Rosenbloom, Distinguished Professor
of Public Administration, School of Public
Judge E. Grady Jolly, President, Federal Judges Affairs, American University
Association
Susan C. Schwab, Dean, School of Public
Judicial Conference of the United States Affairs, University of Maryland
Corneilius Kerwin, Provost, American Carl Stenberg, Dean, Yale Gordon College of
University Liberal Arts, University of Baltimore
Jack D. Lockridge, Executive Director, Federal Virginia L. Thomas, Director of Executive

Bar Association Branch Relations, Heritage Foundation
Robert Tobias, Director, Institute for the Study

of Public Policy Implementation,
American University

U.S. House of Representatives Government
Reform Committee Staff
U.S. Senate Governmental Affairs Committee

Staff
Casimir A. Yost, Director, Georgetown

University Institute for the Study of
Diplomacy

01 Governance

Uploaded by

01 Governance

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URGENT BUSINESS FOR AMERICA

REVITALIZING THE FEDERAL GOVERNMENT

iv UR GENT BUSINESS FOR A MERICA

CHAIRMAN Committee on Intelligence. He was a key

vi UR GENT BUSINESS FOR A MERICA

Council for Excellence in Government

THE CASE FOR CHANGE 1

x UR GENT BUSINESS FOR A MERICA

The federal workforce must be reshaped, and

2 UR GENT BUSINESS FOR A MERICA

Americans expect more of their government

No one should expect a 21st century population

4 UR GENT BUSINESS FOR A MERICA

TRUST IN FEDERAL GOVERNMENT, 1964-2000.

6 UR GENT BUSINESS FOR A MERICA

8 UR GENT BUSINESS FOR A MERICA

10 UR GENT BUSINESS FOR A MERICA

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T across regions, generations, and political affiliations. We must have a government

The structure of the federal government is out- R E C O M M E N D AT I O N 1

14 UR GENT BUSINESS FOR A MERICA

There is extensive evidence now of duplication, ■ The Hart-Rudman Commission (U.S.

Of particular importance is that managers,

16 UR GENT BUSINESS FOR A MERICA

To take effect, these proposals would have to be

■ Not be subject to amendment,

No organization in this country is more talented individuals for service as presidential

Senior leadership in federal agencies comes R E C O M M E N D AT I O N 5

THE PRESIDENTIAL APPOINTEE PROBLEM

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by anybody in the public.”

22 UR GENT BUSINESS FOR A MERICA

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you will find the institutional strength

26 UR GENT BUSINESS FOR A MERICA

must link pay and incentive programs

RECOMMENDATION 11 to individual knowledge, skills and

We recommend that the General Schedule clas-

Voinovich / Akaka Personnel Policy Reforms

10) Repeals ineffective recertification requirements for Senior Executives.

28 UR GENT BUSINESS FOR A MERICA

Office of Personnel Management Initiatives to Modernize Federal Personnel Practices

necessary to attract and retain

30 UR GENT BUSINESS FOR A MERICA

and who recognize

that you get what you pay for.”

Darryl Perkinson, President, Federal Managers

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WITNESSES AT ■ Brookings Institution, Presidential

Congressional Research Service National Association of Schools of Public

44 UR GENT BUSINESS FOR A MERICA

PUBLISHED STUDIES AND Castel, P. Kevin, President, Federal Bar

46 UR GENT BUSINESS FOR A MERICA

Council on Foundations Kathryn Newcomer, Chair, Department of

Jack D. Lockridge, Executive Director, Federal Virginia L. Thomas, Director of Executive

Robert Tobias, Director, Institute for the Study

48 UR GENT BUSINESS FOR A MERICA

U.S. Senate Governmental Affairs Committee

Casimir A. Yost, Director, Georgetown

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