On Wednesday, Clay Johnson, Office of Management and Budget deputy director for management, announced the decision to replace the General Schedule with a new personnel system, arguing that it would be unfair to leave other government agencies without the flexibility the Homeland Security and Defense departments have to limit union bargaining rights, set pay based on performance and discipline workers.
But union leaders, already furious over the new DHS pay for performance personnel system released Wednesday, said they would continue to fight a civil service overhaul.
"This isn't any modernization," said American Federation of Government Employees President John Gage. "This isn't any improvement. This is gutting the civil service."
On Thursday, AFGE, the National Association of Agriculture Employees, the National Federation of Federal Employees and the National Treasury Employees Union followed through on their promise to sue DHS in federal district court in Washington. The groups want the court to block implementation of the new DHS personnel system, arguing that its limits on collective bargaining and employee disciplinary appeal rights are a violation of Congress' original intent when it approved the new system as part of the 2002 Homeland Security Act.
Johnson provided few details on the proposal, but said it would be released with President Bush's fiscal 2006 budget on Feb. 7, and will be modeled on the personnel system changes under way at the Homeland Security and Defense departments.
The plan immediately drew fire from congressional Democrats. "Congress decided the Homeland Security Department needed extraordinary flexibility to waive civil service protections because of its unique security mission," said Sen. Joseph Lieberman, D-Conn., ranking member on the Senate Homeland Security and Governmental Affairs Committee. "Now that DHS is undertaking a grand experiment in revamping the civil service system, we should see how it works before we consider whether it would be appropriate for agencies without critical national security responsibilities."
DHS announced Wednesday that it had completed regulations that will over the next six months create a stricter disciplinary system and impose new limits on and controls over union bargaining. A pay system replacing the General Schedule will be developed and phased in over the next four years. Employees will receive raises based on market conditions and managerial evaluations of their performance.
Gage insisted that budget constraints would make it unlikely that federal pay would keep pace with the raises now anticipated for General Schedule workers. Under the DHS system, the department will have wide discretion to set raises, and can deny them altogether to employees who receive poor performance evaluations.
"This is depressing federal pay, and this will hurt these important agencies that we represent," said Gage.
The plan to expand pay-for-performance personnel rules to the rest of government would "let everyone suffer equally," Gage added. "I have a lot of problems with that."
When the Defense Department sought authority in 2003 to revamp its personnel system, just a few months after the new Homeland Security Department had won similar power, many Democrats in Congress said they had been tricked into voting for the DHS system, believing it would be fully tested before additional agencies sought similar authority. But Congress approved the Defense Department's request anyway, in November 2003.
The Bush administration's plan to expand personnel flexibilities to the rest of government would dismantle the existing civil service system before any department has even begun to test new personnel rules.
"Everyone has been kind of just bamboozled by the words 'pay for performance,' " said Gage. "This pay for performance needs a lot of work if it will ever work."
Colleen Kelley, president of NTEU, said the union would "strongly oppose any efforts to extend similar regulations throughout the government."
During a briefing on the new system on Wednesday, DHS Secretary Tom Ridge insisted that agency managers had carefully considered union concerns and delayed the rollout of the pay-for-performance rules to ensure that they were implemented fairly. Department officials also said they would maintain communication with employee unions and hold extensive training sessions for managers and employees. "We decided it was better that we do it right than doing it quickly," Ridge said.
But Democrats in Congress expressed frustration with the final DHS regulations. Lieberman said that he objected to "excessive limits on collective bargaining that go beyond what is necessary to maintain the critical mission of the department, changes to the appeals process that interfere with employees' rights to due process, and unduly vague and untested pay and performance provisions."
Others agreed. "It is essential that any human resources system be both fair and perceived as fair in order to be credible. I am afraid that, as a whole, the final regulations fall short of this requirement," said Sen. Daniel Akaka, D-Hawaii.
Rep. Steny Hoyer, D-Md., added that he was "deeply concerned that these regulations might be used to eliminate important protections for employees and taxpayers on a governmentwide basis.... I am particularly troubled that the new regulations significantly limit basic employee rights and protections."