Federal Daily - July 1, 2008

OPM Backs Seven-Year Locality Pay Phase-In

The Office of Personnel Management (OPM) endorsed a proposal to phase out over seven years existing cost-of-living adjustment (COLA) payments and extend locality pay to federal employees in “non-foreign” areas not part of the continental United States. Charles Grimes, deputy associate director for OPM Performance and Pay Systems, testified June 26 before the House Federal Workforce Subcommittee on behalf of the plan proposed by President Bush. Federal employees in Hawaii, Alaska, Guam, Puerto Rico, the U.S. Virgin Islands and other U.S. territories now receive COLA payments rather than the locality pay federal workers receive in the continental United States. Although employees benefit in the short term because COLA payments are not subject to federal income tax, the payments affect retirement in the long term because they are not considered base pay for retirement purposes, and in effect reduce COLA recipients’ annuities, Grimes said. During the phase-in period, decreases to COLA payments would be limited to 85 percent of the increase in locality pay in order to reduce the impact that tax liability and retirement contributions may have on take-home pay. To see more, go to: www.opm.gov/news/opm-testifies-in-support-of-administration-proposal-on-locality-pay,1422.aspx.

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GAO: VA Needs to Prepare for Increased Demand for Minority Services

The Department of Veterans Affairs (VA) needs to expand its capacity to deliver language access and culturally competent services to veterans to meet expected growth in demand for such services, said Rep. Hilda L. Solis, D-Calif. Although VA currently is meeting minimum standards for minority services, demand for those services likely will rise as servicemembers go from active duty to veteran status, Solis said in a June 27 statement. A new Government Accountability Office (GAO) report shows that VA has made advances in minority services since 2005, when the department acknowledged it was failing to comply with rules for providing access to limited English proficient persons, Solis said, but continued progress is needed. “I strongly urge the VA to improve outreach to beneficiaries and to ensure that the special needs of our young veterans are being met,” said Solis. To see more, go to: http://solis.house.gov/list/speech/ca32_solis/wida6/gaoreportasas.shtml.

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Dingell Probes $35 Million in FDA Bonuses

Rep. John D. Dingell, D-Mich., questioned the wisdom of paying large annual bonuses primarily to top Food and Drug Administration (FDA) deputies rather than to the agency’s field inspectors. Dingell, chairman of the House Committee on Energy and Commerce, released documents June 26 showing that while total FDA bonuses in excess of $4,000 rose from $27 million in 2006 to $35 million in 2007—a jump of 30 percent—many of the so-called “retention” bonuses went to the agency’s highest-paid officials, rather than to FDA field staff. For example, in 2007, FDA’s chief of regulatory affairs received $48,663 in cash bonuses, while the highest bonus paid to a field inspector was $2,500. “These back-scratching bonuses could be used to hire inspectors that might have gone to China and uncovered the unsafe manufacturing practices that led to the heparin deaths,” Dingell said. “Millions of taxpayer dollars are being paid to people that perform no scientific function at all.” As a result of FDA’s bonuses, many FDA managers and senior staff earn upwards of $200,000—more than members of Congress or the president’s cabinet, Dingell said. To see more, go to: http://energycommerce.house.gov/Press_110/110nr304.shtml.

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