Memorandum of Disapproval of Federal Employees' Pay Bill.

IN ORDER THAT federal workers may not have to undergo. a period of uncertainty as to my action on H.R. 7774, "An Act to increase the rates of compensation of classified, postal and other employees of the Government, and for other purposes," I wish to announce that I shall withhold my approval from this bill.

The American people desire to reward properly, even generously, dedicated and faithful service on the part of their Government career employees. In return for the taxes they pay, they expect to have a civil service system that is free of partisan politics, encourages efficient operation, rewards merit, and provides steady pay increases as the value of each employee increases with service and experience. I am wholeheartedly in accord with those desires.

Since taking office, this Administration has developed a personnel program applying the best practices of progressive employers to the requirements of public service. In furtherance of that program, recommendations were made by this Administration to the Congress for reasonable pay increases and adjustments in pay scales. H.R. 7774 is inconsistent with these principles. Unfortunately, the general pay increase proposed by this bill ignores and therefore tends to perpetuate the inequities we must correct.

On February 24, 1954 I approved and promptly submitted to the Congress the program to which I have just referred. It is the broadest and most constructive of its kind ever placed before the Congress. Most of its important provisions were passed at this session and these measures, in themselves, are so important as to constitute a milestone in the improvement of the Civil Service System. These provisions include:

1. For the first time an inclusive system of Group Life Insurance and unemployment compensation benefits similar to those enjoyed by workers in private industry, have been provided for Federal employees.

2. Restrictions on permanent promotions and reinstatements of former career employees have been removed.

3. The statutory limit on the number of employees in the Executive Branch has been adjusted to meet present day needs.

4. The incentive awards programs have been liberalized and made applicable to all employees.

5. Arbitrary restrictions upon the accumulation of annual leave have been repealed.

6. Longevity pay increases have been authorized for all except the three highest classified service grades.

7. An equitable system for overtime pay has been established.

These measures not only will benefit our Federal career system and its employees, but also will improve the sound management of the Federal Government, to whose efficiency this Administration is resolutely dedicated. H.R. 7774 is not a part of a progressive and efficient program.

An important part of the Administration's program that was not enacted into law involves general pay increases based upon the purposes of correcting inequities, promoting efficiency and rewarding merit and experience.

In withholding my approval from this bill, I want to make it absolutely clear that the Administration is not departing from the principles and purposes which it has hitherto advocated. I shall continue to urge the enactment of the remaining parts of the personnel program which was submitted to this session of Congress so that obvious distortions in the pay scales of both the postal and classified services can be corrected; so that adjustments and more equitable relationships between grades and steps within those grades can be made, and so that a proper and effective relationship between pay and work performed will be established and maintained.

Legislation is obviously unwise that disregards these principles of sound personnel management and ignores the necessity of revenue to pay for salary increases.

This measure, because it ignores the Administration's recommendations for postal rate increases, would add $112 million to the cost of operating the Post Office Department which is operating at a deficit of $400 million this year. It is well to remember that since 1945 the accumulated postal deficit has reached the staggering total of $4 billion. Likewise, this measure would add more than $200 million to Civil Service pay without providing any revenue to meet it.

My remarks in Washington on June tenth are now particularly pertinent. I then said, "We hope to uproot the ingrained habit of operating the vast Post Office Department in an extravagantly wasteful and unbusiness-like manner. We cannot permit the deliberate operations of our Postal Department at a gigantic loss because a few are opposed to adequate postal rates. And we must have classification and promotional procedures for postal personnel that will serve the best interest of the Government, the public and the postal workers themselves."

Legislation for pay increases and classification adjustments related to work performed is still vital and urgently needed. The inequities presently existing in pay scales must still be corrected. I shall therefore resubmit to Congress when it convenes in January the recommendations previously made by the Administration, together with such additional recommendations as any change in conditions then existing may warrant.

While this bill is limited to civilian personnel, I must observe, parenthetically, that consideration of a complete Federal personnel program must eventually meet certain imperative needs of the members of the Armed Forces. These patriotic men and women, whose morale, skill and dedication to service are so important to us all, now lack adequate medical care for dependents and reasonable survivorship benefits for their families. It is most important that these needs of Armed Forces personnel, serving their country often in remote comers of the world, engage our serious consideration.

I am confident that the Congress will consider all of these recommendations promptly and that the American people will regard them as fair and just.

DWIGHT D. EISENHOWER