AFGE Legislative Grassroots Agenda for 2004 Legislative Issues Briefing.

AFGE Legislative Grassroots Agenda for 2004

Legislative Issues Briefing

AFGE Legislative and Political Department Staff

Beth Moten, Director, Legislative and Political Action Department

Bob Nicklas, Director of AFGE-PAC and Issues Mobilization

AFGE Legislative and Political Action Department Staff John Threlkeld, Assistant Legislative

Director Linda Bennett, Legislative

Representative Joseph Lopes, Legislative

Representative Alan Kadrofske, Legislative

Representative

AFGE Legislative and Political Action Department Staff Kristin Nabers, Political Representative Amy Lloyd, Campaign Finance

Compliance Specialist Valencia Newman, Legislative Assistant Mildred Hopson, PAC Assistant

AFGE Field Legislative and Political Action Organizers Bob Mechan

Fred McDuff

Chris Kemm

Yolanda Taylor

PRIVATIZATION

PRIVATIZATION

John Threlkeld

P: 202 639-6466

F: 202 639-6492

E: [email protected]

TOPICS• What’s OMB up to now?

• OMB’s bogus savings claims

• What’s wrong with A-76

• How we fought back in 2003

• What we can do in 2004

What’s OMB up to now?

Quotas became “goals”--so what?

Most agencies crafted their privatization goals when quotas were in effect!

Still not based on research and analysis


OMB still judges agencies by numbers:

– arbitrary numbers of competitions of jobs – within arbitrary periods of time,

– not whether these privatization reviews actually serve interests of taxpayers and customers


Number of feds targeted has actually grown: 425,000 to 434,000

Change in A-76’s definition of “inherently governmental” means that number could increase further


BUSINESS AS USUAL!

OMB’s bogus savings claims

OMB: “competitive sourcing” generates “anywhere from 10-40 percent savings on average, regardless of whether the competition is won by a private contractor or the government.”


Economic Policy Institute: “Show Me the Money”

– Center for Naval Analyses (CNA)– RAND– IBM Endowment for the Biz of Government– Department of Defense (DoD)

– General Accounting Office (GAO)


CNA: – only 16 studies in DoD, although DoD has

conducted well over 300 studies, and all prior to 1996;

– very selective: • most studies discarded for poor documentation; • ignored small studies because the savings were too

small; and • actual costs exceeded costs in contractor bids in

every instance.


RAND: – includes only 6 studies in DoD; – admits unfair overhead rate may have

overstated savings; and – acknowledged that savings came from

firing with minimum due process and reducing wages.


IBM: – No original research. Based on flawed

RAND and CNA studies—and a magazine article.

– Of the four cases in the magazine article, only one was subject to an external study, which reported no savings.


Pentagon claims 33% savings. – GAO has noted that such claims are

“unaudited…because the cost accounting systems are not just of a state that we can form an opinion…”

– CNA criticized DoD’s accounting systems that were used to create the savings claim.


GAO says only that savings are possible.

What’s wrong with A-76 #1

Uses a “quick-and-dirty” 90 day streamlined process– no Most Efficient Organization– no Minimum Cost Differential (a.k.a. the

10% rule)– no savings research, bogus or otherwise,

to support process


OMB retains direct conversion authority, i.e., agencies can and still do give our jobs to contractors without competition when they secure OMB’s permission.


Overstates in-house overhead costs (i.e., 12% overhead rate),

according to RAND and the Department of Defense Inspector General.


Rewards contractors who provide inferior health care benefits– DoD Appropriations Bill


Has a disproportionate adverse impact on women and minorities

– DoT, DVA, National Parks Service


Does not test and evaluate use of subjective “best value” process.

Because they were so concerned, HASC and SASC Chairmen Duncan Hunter and John Warner insisted that “best value” be put on an extended limited pilot project for DoD.


Establishes one-sided requirements on feds for

– acquiring new work, – keeping existing work, and – length of contracts / performance

agreements.


Requires automatic competition on feds when we default--but not on defaulting cons


No legal standing for feds before GAO and CFC

Cons: No standing for feds because– Too difficult and cumbersome

– Contractor employees don’t have standing

– Standing should only be given to Agency Tender Official


Watch our for fake standing:– just for GAO (and not CFC as well)

– just when we lose (instead of throughout the process like contractors)

– just for ATO (instead of the employees actually affected)


Narrows definition of “inherently governmental” by literally rewriting the law.


Discourages agencies from considering alternatives to privatization,

such as reorganizations, consolidations, labor-management partnerships,

that might generate more savings, because agencies get credit from OMB

only for doing privatization reviews.


Fails to ensure that feds can compete for new work and contractor work, despite OMB’s rhetorical support for fairness.


No new systems to track costs from contracting out

No new resources to administer contracts No new resources to pay for privatization

studies and transitioning the work (although more agencies will ask for money in their budgets, e.g., DVA)

How we fought back in 2003

Transportation-Treasury Appropriations Bill (can have gov’t-wide impact)

House: Van Hollen Amendment (220-198), defund new A-76, Vote 3

House: Hastings Amendment (205-211), revise new A-76, Vote 2

Senate: Mikulski Amendment (47-48), defund new A-76, Vote 3


Transportation-Treasury Appropriations Conference: Istook-Shelby-Mikulski-Hoyer Compromise

• all agencies must allow feds to submit best bids (MEO’s)

• all agencies must require contractors to promise savings sufficient to offset costs (MCD’s)

• all agencies must allow affected feds standing to appeal to GAO


After White House veto threats– only agencies funded by Transportation-

Treasury must allow best bids (MEO’s)– no agencies required to force contractors

to promise savings (MCD’s)– no agencies required to give affected

employees standing before GAO


Department of Defense Senate: Kennedy-Chambliss

Amendment: MEO, MCD, exclusion of health care costs

House: Dicks-Lewis Provision: MEO and MCD

Conference: MEO and MCD


Department of Army– “Third Wave”: indefinitely suspended


Department of Interior House: Taylor Provision: No new

outsourcing Senate: Reid Amendment: No new

outsourcing, 44-51, Vote 2 Conference: MCD and limitation on

funding new outsourcing


Department of Agriculture AFGE Local 3354: Bond Provision: no

outsourcing of rural development and farm loan programs


What’s AFGE Local 3354’s secret?• Republican lawmaker was their champion• Who was on right committee• Who was up for re-election,• And AFGE Local 3354 WORKED VERY HARD

and had help from allies


Department of Veterans Affairs Senate: Bond-Mikulski: No funding for

VHA outsourcing House: Walsh-Mollohan: No funding for

VHA outsourcing Conference: No funding for VHA

privatization Must do it again in 2004


Department of Commerce: Seafood Inspection Program (SIP) is commercial

Senate: Hollings Letter (20) House: Frank Letter (25) Department of Commerce: SIP is

Inherently Governmental


Department of Homeland Security Immigration Information Officers Senate: Lieberman Letter (34) House: Gutierrez (105) and Baca (20)

Letters Allies in immigration community Laying the groundwork for 2004


Federal Aviation Administration Cartographers Senate: Mikulski (20) Letter Allies in the aviation community Laying the groundwork for 2004

What we can do in 2004

Government-wide effort (Transportation-Treasury Appropriations Bill)

Agency-specific efforts (e.g., IIO’s, Cartographers, VHA)


House TRAC Act (H.R. 3426) / Sponsor: Representative Al Wynn (D-MD) (SEE HANDOUT)

Track costs and Require fair competition for

– fed work, – new work, and– contractor work


• That would– allow feds to always submit best bids

– require contractors to be 10% more efficient to take work from feds

– exclude pay and benefits costs if contractor provided less pay and worse benefits


Senate TRAC Act to be introduced by Senator Richard Durbin (D-IL)


How did your lawmakers vote on our amendments?

If they were right, thank them, particularly if they are Republicans.

If they were wrong, find out why.


Encourage lawmakers to cosponsor TRAC

If they won’t find out why?


Tell your lawmakers to be prepared for privatization amendments later in the year.

Federal Pay General Schedule & Blue Collar


.President Bush’s budget for Fiscal Year 2005 proposes a 1.5% pay raise for civilians.


.President Bush’s Fiscal Year 2005 budget has recommended an average pay raise for military personnel of 3.5%.


.In virtually every year out of the past two decades, Congress has maintained the tradition of parity between civilian and military personnel.

Federal Pay RaiseGeneral Schedule & Blue Collar

Representatives Steny Hoyer (D-MD) and Tom Davis (R-VA) have introduced H. Con. Res. 356 which says that civilians and military should get the same pay raise.

Senators Paul Sarbanes (D-MD) and John Warner (R-VA) introduced companion legislation S. Con. Res. 88


Rep. Jim Moran (D-VA) is expected to offer an amendment to provide for pay parity when the House Budget Committee marks up the FY 2005 Budget Resolution.


Senator Paul Sarbanes (D-MD) is expected to offer a pay parity amendment when the Senate Budget Committee marks up its version of the FY 2005 budget resolution.


Military and civilian personnel work side-by-side for the same government.

We are not asking for identical compensation packages (military get better health and retirement benefits as well as housing allowances).

We just want the annual raise to be the same.


What you can do:

Ask your representative (especially Members of the Budget and Appropriations Committees) to cosponsor H. Con. Res. 356.

Cosponsors of H.Con.Res.356

Republicans:

Davis, T. (VA)

Wolf (VA)


Democrats:

Hoyer (MD) -- lead sponsor

Moran (VA)

Norton (DC)

Cardin (MD)

Cummings (MD)

Ruppersberger (MD)


More Democrats:

Van Hollen (MD)

Wynn (MD)


What you can do:

Ask your Senators (especially Members of the Budget or Appropriations Committees) to be a cosponsor of the S. Con. Res. 88 introduced by Senator Sarbanes.

Original cosponsors of Senate Pay Parity Resolution

Republicans:

Warner (VA)

Allen (VA)

Collins (ME)

Original cosponsors of Senate Pay Parity Resolution

Democrats

Sarbanes (MD) Murray (WA)

Mikulski (MD) Durbin (IL)

Akaka (HI) Johnson (SD)

Dayton (MN)

Levin (MI)

Kennedy (MA)

President Bush Opposes Pay Parity

OMB 2/2/04 Clay Johnson wrote a letter to lawmakers “on the President’s behalf…. Giving the same salary increase to everybody, civilian and military, has never been shown to be an effective incentive for quality people to hire-on, stay and/or perform at a high level. Recognizing performance and using targeted increases to make specific jobs more attractive, on the other hand, have been shown to be effective.”

Bush Pay Agenda “Pay for Performance”

The new laws for the Department of Homeland Security and the Department of Defense allow these agencies to take employees out of the current pay systems and put them under “pay-for-performance” systems.

Bush Pay Agenda“Pay for Performance”

We expect DHS and DoD to design pay systems in which “salary is determined by individual merit and value to the organization, rather than time served…”


In other words, we expect DHS and DoD to design pay systems to put your annual pay raise and your step increases at risk. Only your supervisor will decide whether you get a raise at all, and if so, how much.


And of course, you will have no appeal rights on that issue.

Bush Pay AgendaPay for Performance

Bush’s FY 2005 budget proposes a $300 million fund (government wide) for awarding extra base salary increases to individuals according to “contribution.”

The fund could cover cover both supervisory and non-supervisory, as well as politicals.


Bush Plan would abandon principle of “Equal Pay for Equal Work” that assigns salaries to positions, not individuals.

Equal Pay for Equal Work means that everyone hired for a given position has roughly the same base salary, whether they’re Democrat or Republican, male or female, union or non-union, White, Black, or Hispanic.


Be sure to let your Representative and Senators know your views on replacement of the General Schedule with a so-called Pay for Performance Plan:– “Performance” or output is difficult to

measure objectively, especially by untrained managers.


– The General Schedule has been mischaracterized by the President. Within grade increases aren’t automatic; they reward performance and are a retention tool.

– Politics and bias are inevitable when political appointees and the managers who report to them have discretion to set salaries, and award or withhold raises.


– AFGE will fight for the checks and balances of collective bargaining to keep any new system honest.

– Adequate funding to avoid downward spiral for some and upward spiral for others would be enormously costly, but absolutely necessary.

Dismantling the Civil Service


The Homeland Security Act gave Bush broad “managerial flexibility” to change 5 areas of civil service law, including:

1. Pay

2. Classification

3. Performance appraisal


4. Appeal rights to the MSPB regarding adverse actions.

5. The right to union representation through the process of collective bargaining.


Last year, the Defense Authorization bill included a section establishing a new “National Security Personnel System” which gave DoD similar authorities to DHS.


However, the DoD law also allows the agency to change premium pay, including pay for weekends, holidays, and hazardous duty.


On Friday DoD gave AFGE its first proposal on a new labor-management relations system.

The elements of the proposal show a clear attempt to marginalize the role of unions and to eliminate representation for many employees.

Dismantling the Civil Service: DoD

Collective bargaining is effectively eliminated and replaced with “consultation”.

The scope of consultation, and the issues which unions could be consulted about, could be determined by management on an ad-hoc basis.

Dismantling the Civil Service:DoD

This would replace collective bargaining:

1. Management proposes a change.

2. Parties consult over management proposal.

3. 60 days later, management implements.

4. No third-party resolution of impasses.


DoD would eliminate contracts after they expire, and there would be no new contracts.

DoD would no longer use the FLRA. Instead, they would create an “independent” Defense Labor Relations Board.


With the elimination of collective bargaining, there will be no negotiated grievance procedure.

All employee-management disputes would be decided unilaterally by a management-appointed board.


Bush has made no secret of the fact that he would like to extend these same managerial authorities to the entire Executive Branch.

In one year, civil service reform went from being about how to make the federal government a better employer, to how to make it more like Wal-Mart.


National Security was the rationale used to eliminate the right of employees at NIMA and TSA to union representation through collective bargaining.

And it was the argument used to justify that the personnel system for Department of Defense should be changed.


Secretary Rumsfeld said last year:

“We use contractors rather than civilian employees, again because you can manage a contractor more efficiently.”


The quote shows that privatization and civil service reform as “flexibility” are two sides of the same coin.


What to tell your Representative and Senators:

The idea of giving over to managers and politicals the power to implement new pay, classification, and performance appraisal systems, without Congressional input, is wrong.


It will politicize the federal workforce, and erase hard won battles to establish a civil service free of patronage and corruption.

Taking away the right to appeal adverse actions to the MSPB removes a vital source of the integrity of the civil service system that prevents corruption.


Eliminating the right of federal employees to have meaningful union representation through collective bargaining only means taking away our ability to keep management honest, and protecting one another from being victimized by mismanagement.


And if federal employees can no longer resolve disputes with their agencies through their unions and collective bargaining, then AFEG will bring each individual complaint as well as complaints on behalf of groups of employees to our Representatives and Senators.


One at a time.

Day after day.

Until we get our rights back.

Federal Employees Health Benefits Program

Federal Employees Health Benefits Program

In 2004, average premiums for enrollees increased 12%.

Over the past 5 years, the average increase in enrollee premiums has been 65%.

FEHBP

Premiums for Blue Cross/Blue Shield Standard Option (the most popular plan in FEHBP) have risen over 70% over the past six years.

Mail handlers High Option total premium went up by 25%, but the enrollee share went up by 49% for singles and 55% for families.

FEHBP

Affordability is a big problem.

At last count, 250,000 full-time federal employees do not participate in FEHBP and are not covered by another plan. They are uninsured.

FEHBP: What agencies pay now

The average premium split between the government and enrollees has now fallen to:

70% government

30% enrollees

FEHBP

Uncle Sam pays 85% of FEHBP premiums in the Postal Service and the Federal Deposit Insurance Corporation (FDIC).

Why? Their unions can collectively bargain over the premium split.

FEHBP: Legislative Relief

Representative Steny Hoyer (D-MD) has introduced legislation (H.R. 577) to change the FEHBP premium split from 70-30 to

80% government

20% enrollees

FEHBP: Legislative Relief

Senator Barbara Mikulski (D-MD) has introduced legislation (S. 319) to change the FEHBP premium split from 70-30 to

80% government

20% enrollees

FEHBP: What you can do

Ask your Representative to cosponsor H.R. 577 (Hoyer’s FEHBP bill).

Ask your Senators to cosponsor S. 319 (Mikulski’s FEHBP bill).

FEHBP: What you can do

Keep track of premium increases for plans at your local installation (particularly HMOs) and let us know the impact these costs are having on your bargaining unit members.

FEHBP: Other bad ideas

OPM is also promoting Health Savings Accounts (HSAs) which combine very high deductible plans ($1000 for singles and $2500 for families) with pre-tax money deposited in a special account.

FEHBP: HSAs

The money rolls over each year and remains tax free. These plans are tax shelters for the wealthy and healthy, and drive up the cost of health care for everyone else, since they are no longer participating in the kind of group insurance that allows everyone in the plan to subsidize one another.

Overtime Regulations


WHAT IS THE ISSUE? In March 2004, the Department of

Labor(DOL) will issue a drastic revision of the federal overtime pay regulations.

Under these new regulations, many American workers - in both the private and public sectors - could work longer hours for less pay.


For years, American workers have been entitled to overtime pay.

But last year, the DOL proposed new regulations that would make it easier for employers to reclassify workers making between $22,100 and $65,000 as executive, administrative, or professional employees - and thereby strip them of their overtime pay rights.


For example, workers could be reclassified as “executives” if they managed a department, directed the work of 2 or more other workers, and have their recommendations about hiring & firing “given particular weight.”

Thus, a $23,000-a-year supermarket produce manager could be refused overtime pay.


The impact of such a change on American workers will be harsh. Tens of thousands of federal workers and at least 8 million workers nationwide will lose their overtime pay rights.

Workers likely to lose their overtime pay rights: mid-level office workers, nurses, corrections officers, and others.


II. WILL THESE NEW REGULATIONS AFFECT FEDERAL WORKERS?

YES! -- Just not directly. It’s true that these new DOL overtime pay

regulations will directly cover private sector workers.

It’s also true federal workers are directly covered by FLSA, which is administered by OPM.


But OPM administers the FLSA in conformity with DOL regulations.

Thus, OPM will almost certainly issue its own overtime pay regulations to conform to the new DOL overtime pay regulations.


III. WHAT DID AFGE DO TO OPPOSE THE NEW REGULATIONS?

In the House, AFGE supported the Obey amendment to the FY 2004 Labor Appropriations bill to prevent the DOL from issuing the new overtime pay regulations.


However, the House defeated the Obey amendment, 210-213 on July 10.

In the Senate, AFGE supported the Harkin amendment to the FY 2004 Labor Appropriations bill to prevent the DOL from issuing its overtime rules.

The Senate approved the Harkin amendment, 55-45, on September 10.


But the Harkin amendment never made it into the final FY 2004 Labor Appropriations bill.

President Bush threatened a veto if the Harkin amendment was included.

On November 21, Sen. Arlen Specter bowed to White House pressure and agreed to remove the Harkin amendment from the final bill.


IV. WHAT CAN AFGE ACTIVISTS DO? AFGE activists are urged to contact both

President Bush and Members of Congress to oppose the new overtime pay regulations.

The new DOL rules tilt too far in the direction of employers. They should be withdrawn and redrawn in a more balanced way.

AFGE Legislative Grassroots Agenda for 2004 Legislative Issues Briefing.

Documents

Transcript of AFGE Legislative Grassroots Agenda for 2004 Legislative Issues Briefing.