[Senate Report 108-409]
[From the U.S. Government Publishing Office]
108th Congress Report
SENATE
2d Session 108-409
_______________________________________________________________________
Calendar No. 800
RESERVISTS PAY SECURITY ACT OF 2004
__________
R E P O R T
of the
COMMITTEE ON GOVERNMENTAL AFFAIRS UNITED STATES SENATE
to accompany
S. 593
TO ENSURE THAT A FEDERAL EMPLOYEE WHO TAKES LEAVE WITHOUT PAY IN ORDER
TO PERFORM SERVICE AS A MEMBER OF THE UNIFORMED SERVICES OR MEMBER OF
THE NATIONAL GUARD SHALL CONTINUE TO RECEIVE PAY IN AN AMOUNT WHICH,
WHEN TAKEN TOGETHER WITH THE PAY AND ALLOWANCES SUCH INDIVIDUAL IS
RECEIVING FOR SUCH SERVICE, WILL BE NO LESS THAN THE BASIC PAY SUCH
INDIVIDUAL WOULD THEN BE RECEIVING IF NO INTERRUPTION IN EMPLOYMENT HAD
OCCURRED
November 16, 2004.--Ordered to be printed
COMMITTEE ON GOVERNMENTAL AFFAIRS
SUSAN M. COLLINS, Maine, Chairman
TED STEVENS, Alaska JOSEPH I. LIEBERMAN, Connecticut
GEORGE V. VOINOVICH, Ohio CARL LEVIN, Michigan
NORM COLEMAN, Minnesota DANIEL K. AKAKA, Hawaii
ARLEN SPECTER, Pennsylvania RICHARD J. DURBIN, Illinois
ROBERT F. BENNETT, Utah THOMAS R. CARPER, Delaware
PETER G. FITZGERALD, Illinois MARK DAYTON, Minnesota
JOHN E. SUNUNU, New Hampshire FRANK LAUTENBERG, New Jersey
RICHARD C. SHELBY, Alabama MARK PRYOR, Arkansas
Michael D. Bopp, Staff Director and Chief Counsel
Jennifer A. Hemingway, Professional Staff Member
Andrew Richardson, Staff Director, Oversight of Government Management,
Restructuring, and the District of Columbia Subcommittee
Theresa M. Prych, Professional Staff Member, Oversight of Government
Management, Restructuring, and the District of Columbia Subcommittee
Joyce A. Rechtschaffen, Minority Staff Director and Counsel
Lawrence B. Novey, Minority Counsel
Marianne Clifford Upton, Minority Staff Director and Chief Counsel,
Oversight of Government Management, Restructuring, and the District of
Columbia Subcommittee
Cathryn J. Kennedy, Legislative Assistant to Senator Durbin
Amy B. Newhouse, Chief Clerk
C O N T E N T S
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Page
I. Purpose and Summary..............................................1
II. Background.......................................................1
III. Legislative History..............................................2
IV. Section-by-Section Analysis......................................3
V. Estimated Cost of Legislation....................................4
VI. Evaluation of Regulatory Impact..................................6
VII. Changes in Existing Law..........................................6
Calendar No. 800
108th Congress Report
SENATE
2d Session 108-409
======================================================================
RESERVISTS PAY SECURITY ACT OF 2004
_______
November 16, 2004.--Ordered to be printed
_______
Ms. Collins, from the Committee on Governmental Affairs, submitted the
following
R E P O R T
[To accompany S. 593]
The Committee on Governmental Affairs, to whom was referred
the bill (S. 593) to ensure that a Federal employee who takes
leave without pay in order to perform service as a member of
the uniformed services or member of the National Guard shall
continue to receive pay in an amount which, when taken together
with the pay and allowances such individual is receiving for
such service, will be no less than the basic pay such
individual would then be receiving if no interruption in
employment had occurred, having considered the same reports
favorably thereon with an amendment and recommends that the
bill do pass.
I. Purpose and Summary
S. 593, the Reservists Pay Security Act of 2004, is a bill
to ensure that a Federal employee who takes leave without pay
in order to perform active duty military service shall continue
to receive pay in an amount which, when taken together with
military pay and allowances, would be no less than the basic
pay the individual would be receiving if no interruption in
Federal employment had occurred.
II. Background
Under current law, a federal employee who is a member of
the National Guard or Reserve is entitled to 15 days of paid
military leave each fiscal year for active duty, active duty
training, or inactive duty training. When an employee is
mobilized under a Presidential Reserve Call Up or a partial to
full mobilization,\1\ he or she is placed in a leave without
pay status from his or her federal job and begins drawing
military pay and allowances. According to a 2000 Department of
Defense survey of approximately 35,000 reserve personnel,
including federal employees, 41% of respondents reported a loss
of income during mobilization and deployment.\2\
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\1\ 10 U.S.C. Sec. 101(a)(13)(B).
\2\ Defense Manpower Data Center. Report No. 2002-005, ``DRAFT
Tabulations of Responses from the 2000 Survey of Reserve Component
Personnel: Vol 1, Military Background.'' iv, 326-327 (August 2002).
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In recognition of the potential significant financial
impact of long term mobilization, many private companies have
chosen to continue to cover the difference in pay and benefits
for their employee reservists called to active duty. Companies
such as Boeing Aerospace, State Farm Insurance, and Safeway
have elected to cover any pay differences.\3\ In addition, a
number of state governments cover either a significant portion
of or all differences in pay for state employee reservists,
including: Alabama, Alaska, California, Connecticut, Delaware,
Florida, Illinois, Maryland, Massachusetts, Minnesota, Nevada,
New Hampshire, New Jersey, New York, North Carolina, Ohio,
Oklahoma, South Dakota, Tennessee, Texas, Vermont, Virginia,
Washington, Wisconsin, and Wyoming.
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\3\ National Committee for Employer Support of the Guard and
Reserve, (www.esgr.org).
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S. 593 would alleviate the financial burdens created when
federal employees are called to active duty and experience a
reduction in pay because their military pay and allowances are
less than their basic federal salary. Approximately 10 percent
of the 1.2 million members of the Guard and Reserve are federal
employees.\4\ Since September 11, 2001, more than 43,000 of
these 120,000 federal employees have been called to active duty
(as of June 2004), with more than 15,000 presently mobilized
for the Global War on Terrorism.\5\
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\4\ Annual Report by the Assistant Secretary of Defense (Reserve
Affairs), ``Ready Reservists in the Federal Government.'' 3 (December
2001).
\5\ Information provided to Senator Durbin by the Defense Manpower
Data Center, ID 4901 (June 14, 2004).
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III. Legislative History
S. 593 was introduced by Senator Durbin on March 11, 2003,
and was referred to the Committee on Governmental Affairs. The
legislation is cosponsored by Senators Mikulski, Leahy,
Sarbanes, Bingaman, Lautenberg, Landrieu, Kerry, Gregg, and
Allen. The bill was referred to the Subcommittee on Oversight
of Government Management, the Federal Workforce, and the
District of Columbia on June 20, 2003. On May 13, 2004, the
Subcommittee favorably polled S. 593 to the full Committee.
On July 21, 2004, the Committee on Governmental Affairs
considered S. 593 and ordered the bill reported by voice vote,
with an amendment in the nature of a substitute, as part of an
en bloc vote. Senators present: Collins, Voinovich, Specter,
Fitzgerald, Lieberman, Akaka, Durbin, Carper, and Lautenberg.
S. 593 as amended makes four changes to the bill as
introduced. Specifically, the amendment: (1) changes the bill
title to ``Reservists Pay Security Act of 2004''; (2) makes the
bill applicable to the level of mobilization under 10 U.S.C.
101(a)(13)(B) and eliminates reference to Title 32; (3)
specifies the effective date as October 11, 2002; and (4)
provides for conditional retroactive application to pay periods
beginning on or after October 11, 2002 through date of
enactment, subject to availability of appropriations.
IV. Section-by-Section Analysis
Section 1. Nonreduction in pay while federal employee is performing
active service in the Uniformed Services or National Guard
Section (a) establishes the title of the legislation as the
``Reservists Pay Security Act of 2004.''
Section (b) amends subpart IV of chapter 55 of title 5,
United States Code, by adding a new provision at the end.
New section 5538 states that an employee who is absent from
a position with the Federal Government in order to perform
active duty in the uniformed services pursuant to a call to
order in accordance with section 101(a)(13)(B) of title 10,
United States Code, shall be entitled to receive an amount of
pay which, when taken together with their military pay and
allowances, is no less than the amount of basic pay which would
otherwise have been payable if the employee's employment with
the government had not been interrupted. New subsection (b)
makes clear that the amounts payable under this section shall
be payable with respect to each period during which the
employee is entitled to reemployment rights under chapter 43 of
title 38, United States Code, and for which the employee does
not otherwise receive basic pay, including by taking any
annual, military, or paid leave. In addition, new subsection
(b) makes clear that the period under which an employee is
entitled to reemployment rights shall be determined without
regard to section 4312(d) of title 38, United States Code; and
shall include the time period within which the employee may
report or apply for employment or reemployment. New subsection
(c) states that the difference in pay shall be paid by the
employing agency from appropriated funds in the same manner as
if the individual's civilian employment had not been
interrupted. New subsection (d) states that the Office of
Personnel Management shall, in consultation with the Secretary
of Defense, prescribe regulations to carry out this section.
New subsection (e) requires the head of each agency, in
consultation with the Office of Personnel Management, to
prescribe procedures to ensure the rights under new section
5538 apply to agency employees. New subsection (f) makes a
number of references to existing definitions in law.
Section (c) makes a clerical amendment to the table of
sections for chapter 55 of title 5, United States Code.
Section (d) states that the provisions within the
legislation will apply with respect to pay period beginning on
or after the date of enactment of S. 593. In addition, this
section states that new section 5538 may apply with respect to
pay periods beginning on or after October 11, 2002, subject to
the availability of appropriated funds, and authorizes
$100,000,000 for the conditional retroactive payments.
V. Estimated Cost of Legislation
S. 593--Reservist Pay Security Act of 2004
Summary: S. 593 would authorize an increase in federal
salaries to pay for the difference between civilian and
military compensation for federal employees called to active
duty in the uniformed services or National Guard. The
legislation also would authorize the appropriation of $100
million for retroactive pay for the difference between civilian
and military compensation for federal employees activated since
October 11, 2002.
CBO estimates that implementing S. 593 would cost $152
million in 2005 and $334 million over the 2005-2009 period.
(Retroactive pay would account for an estimated $128 million of
the five-year cost.) Most of the costs of the bill would be
paid from agencies' appropriations, but S. 593 would also
affect off-budget direct spending of the U.S. Postal Service
(USPS). About $6 million of the 2005 cost (and $4 million in
2006) would be paid by the Postal Service. Over the 2005-2014
period, however, we expect that such costs would be offset by
revenues from higher postal rates.
S. 593 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would impose no costs on state, local or tribal
governments.
Estimated cost to the Federal Government: The estimated
budgetary impact of S. 593 is shown in the following table. The
costs of this legislation fall within all budget functions that
include federal salaries.
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By fiscal year, in millions of dollars--
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2005 2006 2007 2008 2009
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Changes in Spending Subject to Appropriation
Retroactive Federal Employee Reservist Pay:
Estimated Authorization Level.................................. 128 0 0 0 0
Estimated Outlays.............................................. 88 40 0 0 0
Prospective Federal Employee Reservist Pay:
Estimated Authorization Level.................................. 58 44 38 35 31
Estimated Outlays.............................................. 58 44 38 35 31
Total Proposed Changes:
Estimated Authorization Level.................................. 186 44 38 35 31
Estimated Outlays.............................................. 146 84 38 35 31
Changes in Off-Budget Direct Spending
Federal Employee Reservist Pay--Postal:\1\
Estimated Authorization Level.................................. 6 4 -1 -1 -1
Estimated Outlays.............................................. 6 4 -1 -1 -1
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\1\ The direct spending amounts shown for this provision are the off-budget effects associated with the cost of
providing the difference between civilian and military compensation for postal workers called to active-duty
military service. The net expenditures of the U.S. Postal Service are classified as ``off-budget.'' Over the
2005-2014 period, CBO estimates that this provision would have no net cost as the USPS would adjust its rates
to fully recover the cost of higher salaries provided to its employees called to active duty.
Basis of estimate: Based on information from the Department
of Defense (DoD), CBO estimates that federal employees account
for approximately 120,000 positions or almost 15 percent of the
total Ready Reserve. For this estimate, we assume that 15
percent of those reserves called to active service at any time
are federal employees.
In a 2000 DoD survey of 35,000 reserve personnel, 59
percent of surveyed reservists (including federal employees)
reported either no difference in their income while on active-
duty military status or an increase in their income while on
active duty, while 41 percent reported a loss of income during
mobilization and deployment. For this estimate, CBO assumes
that those self-reported survey data are applicable to the
federal employees affected by the current call-up of reservists
and National Guard forces.
Of the 41 percent of survey respondents who reported a loss
of income during military reserve service, most (about 70
percent) said their income was reduced by $3,750 or less while
on active duty. Some reported much larger losses. For example,
approximately 7 percent of those reporting an income loss
indicated a loss of $37,000 to $50,000 annually. Considering
the loss income reported by all survey respondents and the
number who reported no loss or an increase in salary, CBO
estimates that the average annual reduction in salary while
serving in the active-duty military is about $3,000.
Spending subject to appropriation
Retroactive Federal Employee Reservist Pay. S. 593 would
authorize an increase in federal salaries to pay for the
difference between civilian and military compensation for
federal employees called to active duty in the uniformed
services or National Guard. That increase would apply not only
to future service but also to service since October 11, 2002,
subject to the availability of appropriations. The bill also
would authorize the appropriation of $100 million for the cost
of providing the difference between military and civilian pay
since October 11, 2002. Based on information from DoD about the
use of military reserves and National Guard, CBO estimates that
about 42,500 person-years of active-duty military service will
have been performed by federal employees from October 11, 2002,
through September 30, 2004, when we assume the bill would be
signed into law. Using the above assumptions on the average
annual reduction in salary while serving in active duty and
assuming appropriation of the necessary amount, CBO estimates
that the retroactive pay provision would cost $128 million. We
expect that some of those payments would be made in 2006
because of the time required to determine pay differentials and
adjust payroll systems.
Prospective Federal Employee Reservist Pay. The cost of
implementing the legislation for federal employees on active
duty in the future depends on the size of the future reserve
force, which in turn depends on the duration of the military
operations in Iraq and Afghanistan and the forces required for
it, as well as the size and duration of any future military
conflicts, all of which are uncertain. For this estimate, CBO
assumes that the total number of reservists on active duty will
decline from about 160,000 person-years in fiscal year 2005 and
to about 87,500 person-years by 2009. If the number of
reservists called to active duty were to remain at current
levels over the 2005-2009 period, the cost of implementing S.
593 would be significantly greater.
Based on the above assumptions about the future size of the
reserve force, CBO estimates that an average of about 21,000
federal employees will be on active-duty military service in
fiscal year 2005, diminishing to approximately 11,500 by 2009.
On that basis, CBO estimates that the prospective costs of
implementing this provision would total $58 million in 2005 and
$206 million over the 2005-2009 period, assuming the
appropriation of the necessary amounts.
Direct spending
In general, federal salaries are paid from agencies' annual
appropriations, but this bill would also affect the U.S. Postal
Service, whose spending is not governed by appropriation
action. CBO estimates that enacting this legislation would
increase direct spending of the USPS by about $6 million in
2005 and $4 million in 2006. (Spending and receipts of the
Postal Service are classified as off-budget.) Beginning in
fiscal year 2007, additional costs would be covered by
additional revenues because the USPS is required to set rates
to cover its costs; CBO expects that the next rate increase
will occur in 2006. At that time, CBO expects that the USPS
also would seek to recover prior, unanticipated costs.
Consequently, S. 593 would have no net impact on Postal Service
outlays over the 2005-2014 period.
Intergovernmental and private-sector impact: S. 593
contains no intergovernmental or private-sector mandates as
defined in UMRA and would impose no costs on state, local, or
tribal governments.
Previous CBO cost estimates: On July 21, 2004, CBO
transmitted a cost estimate for S. 2400, the Ronald W. Reagan
National Defense Authorization Act for Fiscal Year 2005, as
passed by the Senate on June 23, 2004. The Senate-passed
version of that act and S. 593 contain identical provisions
regarding pay for federal reservists. The estimated cost of
those provisions is the same.
On May 15, 2003, CBO transmitted a cost estimate for H.R.
1836, the Civil Service and National Security Personnel
Improvement Act, as ordered reported by the House Committee on
Government Reform on May 8, 2003. On May 1, 2003, CBO
transmitted a cost estimate for S. 593, as introduced by
Senator Richard J. Durbin on March 11, 2003. H.R. 1836 contains
a reservist pay provision but does not authorize retroactive
pay. S. 593 as introduced did not authorize appropriations for
retroactive pay. Other differences in CBO's cost estimates are
due to updated assumptions about the size of U.S. forces in
Iraq.
Estimate prepared by: Federal Costs: Matthew Pickford;
Impact on State, Local, and Tribal Governments: Melissa
Merrell; and Impact on the Private Sector: Paige Piper/Bach.
Estimate approved by: Robert A. Sunshine, Assistant
Director for Budget Analysis.
VI. Evaluation of Regulatory Impact
Pursuant to the requirements of paragraph 11(b)(1) of rule
XXVI of the Standing Rules of the Senate, the Committee has
considered the regulatory impact of this bill. CBO states that
there are no intergovernmental or private-sector mandates as
defined in the Unfunded Mandates Reform Act and no costs on
state, local, or tribal governments. The legislation contains
no other regulatory impact.
VII. Changes in Existing Law
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, the changes in existing law made
by the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in blank brackets, new
matter is printed in italic and existing law, in which no
change is proposed, is shown in roman):
TITLE 5, UNITED STATES CODE
* * * * * * *
GOVERNMENT ORGANIZATION AND EMPLOYEES
* * * * * * *
PART III--EMPLOYEES
* * * * * * *
Subpart D--Pay and Allowances
* * * * * * *
CHAPTER 55--PAY ADMINISTRATION
* * * * * * *
Subchapter IV--Dual Pay and Dual Employment
SECTION 5538. NONREDUCTION IN PAY WHILE SERVING IN THE UNIFORMED
SERVICES OR NATIONAL GUARD.
(a) An employee who is absent from a position of employment
with the Federal Government in order to perform active duty in
the uniformed services pursuant to a call or order to active
duty under a provision of law referred to in section
101(a)(13)(B) of title 10 shall be entitled, while serving on
active duty, to receive, for each pay period described in
subsection (b), an amount equal to the amount by which--
(1) the amount of basic pay which would otherwise
have been payable to such employee for such pay period
if such employee's civilian employment with the
Government had not been interrupted by that service,
exceeds (if at all)
(2) the amount of pay and allowances which (as
determined under subsection (d))--
(A) is payable to such employee for that
service; and
(B) is allocable to such pay period.
(b)(1) Amounts under this section shall be payable with
respect to each pay period (which would otherwise apply if the
employee's civilian employment had not been interrupted)--
(A) during which such employee is entitled to
reemployment rights under chapter 43 of title 38 with
respect to the position from which such employee is
absent (as referred to in subsection (a)); and
(B) for which such employee does not otherwise
receive basic pay (including by taking any annual,
military, or other paid leave) to which such employee
is entitled by virtue of such employee's civilian
employment with the Government.
(2) For purposes of this section, the period during which
an employee is entitled to reemployment rights under chapter 43
of title 38--
(A) shall be determined disregarding the provisions
of section 4312(d) of title 38; and
(B) shall include any period of time specified in
section 4312(e) of title 38 within which an employee
may report or apply for employment or reemployment
following completion of service on active duty to which
called or ordered as described in subsection (a).
(c) Any amount payable under this section to an employee
shall be paid--
(1) by such employee's employing agency;
(2) from the appropriation or fund which would be
used to pay the employee if such employee were in a pay
status; and
(3) to the extent practicable, at the same time and
in the same manner as would basic pay if such
employee's civilian employment had not been
interrupted.
(d) The Office of Personnel Management shall, in
consultation with Secretary of Defense, prescribe any
regulations necessary to carry out the preceding provisions of
this section.
(e)(1) The head of each agency referred to in section
2302(a)(2)(C)(ii) shall, in consultation with the Office,
prescribe procedures to ensure that the rights under this
section apply to the employees of such agency.
(2) The Administrator of the Federal Aviation
Administration shall, in consultation with the Office,
prescribe procedures to ensure that the rights under this
section apply to the employees of that agency.
(f) For purposes of this section--
(1) the terms ``employee'', ``Federal Government'',
and ``uniformed services'' have the same respective
meanings as given them in section 4303 of title 38;
(2) the term ``employing agency'', as used with
respect to an employee entitled to any payments under
this section, means the agency or other entity of the
Government (including an agency referred to in section
2302(a)(2)(C)(ii)) with respect to which such employee
has reemployment rights under chapter 43 of title 38;
and
(3) the term ``basic pay'' includes any amount
payable under section 5304.
(g) Clerical Amendment.--The table of sections for chapter
55 of title 5, United States Code, is amended by inserting
after the item relating to section 5537 the following:
5538. Nonreduction in pay while serving in the uniformed services or
National Guard.