Special Message to the Congress on Federal Personnel Management

To the Congress of the United States:

The Eighty-Third Congress made an outstanding record in progressive personnel legislation for the benefit of the Government and its employees. Among other steps forward, the new laws improved overtime pay practices, established a Government-wide incentive awards program, removed restrictive controls on appointments, authorized group life insurance and extended the benefits of the unemployment insurance system to Federal workers. These changes have taken us a long way toward the goal of combining the best practices of private employers with the special demands of public service.

I am now recommending the enactment of legislation to improve other aspects of Federal personnel management, including adjustments in basic pay scales, group health insurance, employee training, personnel practices affecting Government employees stationed overseas, and increased travel allowances. Specific legislative proposals for carrying out these recommendations will be submitted shortly by the Civil Service Commission, the State Department and the Bureau of the Budget. Their purpose will be to bring the average governmental remuneration into line with prevailing non-governmental standards. I earnestly urge favorable consideration of them by the Congress.

ADJUSTMENTS OF PAY SCALES

Pay adjustments are needed (I) to recognize more fully the differences between the duties and responsibilities of positions of varying levels, (2) to relieve as far as possible, under the present ceiling, the increasing compression between the lower and higher salaries, and (3) to take into account the decline in the real income of many Federal employees.

The inequities and deficiencies existing in the present pay scales of the Classification Act of 1949, as amended, should be corrected. Similar adjustments should also be made in the pay schedules provided for employees subject to the Foreign Service Act of 1946, as amended, and employees in the Veterans Administration Department of Medicine and Surgery who are subject to Public Law 293, the 79th Congress, as amended.

In a separate message submitted to the Congress today, I am recommending appropriate pay adjustments covering employees of the Postal Field Service.

The recommended changes for the Classification Act group provide for an upward adjustment of pay rates for each grade, except that no change is recommended at this time in the ceiling pay rate of $14,800. Emphasis is placed upon a greater and more meaningful differential between pay scales of successive grades. The proposal recognizes the fact that, in general, compensation rates in the lower grades of the Classification Act are fairly well in line with those prevailing outside the Federal Government while rates in the middle and upper grades have lagged behind.

Insofar as possible, adjustments in the Foreign Service and Veterans Administration pay schedules should parallel the dollar amounts of pay adjustments provided for Classification Act employees at similar levels.

For Classification Act employees, the recommended pay adjustments would add an additional $202,000,000 or approximately 5 percent to present payroll costs. Even though the correction of inequities in the middle and upper pay levels is a primary objective of the Classification Act pay adjustments, 45.5 percent of the cost results from additional pay proposed for the lowest five grades. Only 4.5 percent will be applied in the highest five grades. The proposed pay schedules are presented in an appendix to this message.

Proposed changes for employees subject to the Foreign Service Act and those in the Department of Medicine and Surgery of the Veterans Administration, which are incorporated in the comprehensive proposal, will add approximately $8,500,000 to the cost, making the over-all total approximately $210,000,000.

The Classification Act of 1949, as amended, sets a ceiling on the number of positions that can be placed in grades 16, 17, and 18. Without regard to this ceiling, nineteen other statutory authorities permit or require the establishment of additional positions in these three highest grades. The Classification Act limitation coupled with this complex array of other authorizations seriously hampers our ability to meet the changing needs of the Government. These conditions prevent sound pay administration and handicap the Federal Service in recruiting and retaining top level personnel. Therefore, I am recommending the removal of this ceiling, and urge the consolidation of all existing authorities.

GROUP HEALTH INSURANCE

As another means for strengthening the Federal Service, I propose for the consideration of the Congress a contributory system of voluntary health insurance for civilian employees in all branches of the Government and their dependents.

This contributory system has been designed to meet the requirements of the Federal service and to take into account the experience of private employers. The system would permit employees to choose either a standard plan of uniform benefits or an approved plan operating in an individual community when more suitable to employees in that location. It is proposed that the Government contribute approximately one-third the cost of the insurance for the employees and their dependents. It is estimated that the annual cost to the Government will be approximately $55,000,000.

Under the standard plan, a comprehensive set of uniform benefits will be offered, including reimbursement for the costs of hospitalization, surgery, and other personal health services. The newest health insurance features, such as major medical or catastrophe coverage, are included. Appropriate provisions will be made for the continuance of substantial protection for employees and their dependents after they retire in the future--a valuable feature inasmuch as health insurance protection is frequently beyond the reach of those at the older ages.

Where the standard plan is not desired, provision is also made for employees in the various localities to purchase, with Government contributions, approved plans of health insurance especially suited to their needs.

All types of insurers are to be utilized under orderly processes established and supervised by the Civil Service Commission. This contributory system has been developed through the cooperative efforts of representatives of employee groups, insuring organizations and the leaders among the professions in the field of health.

EMPLOYEE TRAINING

Attainment of the greatest possible efficiency in governmental operations is a major goal of this Administration. Achievement of this goal requires the effective use of training facilities outside as well as within Government to maintain a high level of competence in the Federal civilian career service.

Most civilian agencies of Government do not have comprehensive and adequate training programs, chiefly because there is no general statutory authority to use outside training facilities. Although it is clearly in the Government's interest to do so, many agencies now cannot send employees to private laboratories, industrial plants, universities, or state agencies for critically needed training in the use of new methods, techniques and machines.

A comprehensive training program should be authorized that will (1) permit Government agencies to use outside facilities for training required to meet operating needs when it is in the Government's interest, (2) consolidate in one law the training authorities now carried in many separate statutes, and (3) permit the establishment of Government-wide policies and effective controls on the use of outside training facilities.

OVERSEAS PERSONNEL MANAGEMENT

At present many different Government agencies conduct a wide variety of governmental functions in the territories and foreign countries ranging from such activities as postal service and aid to veterans to such newer operations as economic and military aid and technical development programs. The development of sound personnel practices has not always been able to keep pace with the necessarily accelerated growth of Federal operations overseas.

The Civil Service Commission is now taking action, in cooperation with the Federal agencies concerned, to extend the competitive service to those operations overseas that should be included within the regular civil service system. This will be done in the near future and does not require new legislation.

The State Department already has under way an action program designed to improve personnel administration in both its overseas and departmental activities at home. This program results from the recommendations made by a committee of distinguished citizens appointed by the Secretary of State in March, 1954. Certain features of the program will require new legislation in the form of amendments to the Foreign Service Act of 1946. These are now in preparation by the State Department.

There is also a need for improvements in certain conditions affecting all United States citizens employed overseas. Such matters as allowances, leave, housing, retirement, and health, and medical care as well as the whole range of problems posed by the management of alien personnel, require attention. As a first step, the Civil Service Commission will propose for consideration by the Congress comprehensive recommendations on allowances and leave for overseas personnel.

TRAVEL ALLOWANCES

The per diem allowance of $9.00 for civilian employees who travel on official business was established in 1949. Since that time the cost of lodging, meals, and incidental expenses has creased. It is not fair to ask Government employees to defray part of their official travel and subsistence expenses from their personal funds. Recommendations soon will be submitted to the Congress for an appropriate increase in the present rate.

The various measures, described in this message, are essential to the further improvement of the Federal career service. I earnestly urge that the necessary legislation be enacted by the Congress.

DWIGHT D. EISENHOWER