TRAVEL EXPENSE AMENDMENTS ACT OF 1974 HEARING BEFORE THE SUBCOMMITTEE ON BUDGETING, MANAGEMENT, AND EXPENDITURES OF THE COMMITTEE ON GOVERNMENT OPERATIONS UNITED STATES SENATE NINETY-THIRD CONGRESS SECOND SESSION ON S. 3341

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP76M00527R000700030005-6
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 81
• Document Creation Date: December 9, 2016
• Document Release Date: September 2, 2001
• Sequence Number: 5
• Publication Date: June 6, 1974
• Content Type: REPORT

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TRAVEL EXPENSE AMENDMENTS ACT OF 1974
HEARING
SUBCOMMITTEE ON
BUDGETING, MANAGEMENT, AND EXPENDITURES
COMMITTEE ON
GOVERNMENT OPERATIONS
UNITED STATES SENATE
NINETY-THIRD CONGRESS
SECOND SESSION
ON
S. 3341
TO REVISE CERTAIN PROVISIONS OF TITLE 5, UNITED
STATES CODE, RELATING TO PER DIEM AND MILEAGE
EXPENSES OF EMPLOYEES AND OTHER INDIVIDUALS
TRAVELING ON OFFICIAL BUSINESS, AND FOR OTHER
PURPOSES
U.S. GOVERNMENT PRINTING OFFICE
35-6760 WASHINGTON : 1974
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COMMITTEE ON GOVERNMENT OPERATIONS
SAM J. ERVIN, JR., North Carolina, Chairman
JOHN L. McCLELLAN, Arkansas CHARLES H. PERCY, Illinois
HENRY M. JACKSON, Washington JACOB K. JAVITS, New York
EDMUND S. MUSKIE, Maine EDWARD J. GURNEY, Florida
ABRAHAM RIBICOFF, Connecticut WILLIAM V. ROTH, JR., Delaware
LEE METCALF, Montana BILL BROCK, Tennessee
JAMES B. ALLEN, Alabama
LAWTON CHILES, Florida
SAM NUNN, Georgia
WALTER D. HUDDLESTON, Kentucky
ROBERT BLAND SMITH, Jr., Chief Counsel and Staff Director
JANET GAY HOLLIDAY, Chief Clerk
ELI E.NOBLEMAN, Coun8el
W. P. GOODWIN, Jr., Coun8el
J. ROBERT VASTINE, Jr., Minority Coun8el
BRIAN CONBOY, Special Coun8el for the Minority
W. THOMAS FoxWELL, Staff Editor
SUBCOMMITTEE ON BUDGETING, MANAGEMENT, AND EXPENDITURES
LEE METCALF, Montana, Chairman
JOHN L. McCLELLAN, Arkansas BILL BROCK, Tennessee
EDMUND S. MUSKIE, Maine CHARLES H. PERCY, Illinois
SAM NUNN, Georgia WILLIAM V. ROTH, JR., Delaware
WALTER D. HUDDLESTON, Kentucky
Vic REINEMER, Staff Director
E. WINSLOW TURNER, Chief Coun8el
ALAN CHVOTKIN, Professional Staff Member
LYLE RYTER, Minority Coun8el
JEANNE A. MCNAUGHTON, Chief Clerk
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CONTENTS
Page
Opening statement of Senator Huddleston------------------------------ 1
WITNESSES
THURSDAY, JUNE 6, 1974
Campbell, James M. Associate General Counsel, General Accounting Office ;
accompanied by Edwin J. Monsma, Deputy Assistant General Counsel ;
and John Miller, Attorney with the General Counsel's Office staff ------ 2
Zechman, Ronald E., Associate Administrator for Federal Management
Policy, General Services Administraton ; accompanied by Robert Chan-
dler, Chief of Passenger Transportation Services Branch, Federal Supply
Service ; Gordon Yamada, Director of Management Systems and Special
Projects, Office of Federal Management Policy ; Ed Duignan, Chief
Counsel, Federal Management Policy, General Services Administration__ 7
Connery, Vincent L., President, National Treasury Employees Union ;
accompanied by Mary Condon Gereau, Director of Legislation ; Jerry
Klepner, Director of Communications________________________________ 15
Webber, Clyde M., National President, American Federation of Govern-
ment Employees ; accompanied by Carl K. Sadler, Legislative Represent-
ative ------------------------------------------------------------- Zs;
McCart, John Operations Director, Government Employes Council,
AFL-CIO --------------------------------------------------------- 27
Geller, Irving I., General Counsel for the National Federation of Federal
Employees -------------------------------------------------------- 31,
ADDITIONAL MATERIAL
Letter to Senator Huddleston from Hon. Robert T. Stafford, a U.S. Sen-
ator from the State of Vermont, dated June 5, 1974, concerning S. 3341,
expressing the fact that it costs more than 12 cents a mile to fly an
airplane ----------------------------------------------------------- 2
Zechman, Ronald E.:
Draft of bill submitted by GSA____________________________________ 7
McCart, John :
Prepared statement----------------------------------------------- 29
Letter to Senator Metcalf, Chairman, Subcommittee on Budgeting, Man-
agement, and Expenditures, from John J. Murphy, President, National
Customs Service Associaton, Washington, D.C., dated June 20, 1974,
strongly urging the passage of S. 3341_______________________________ 34
APPENDIX
Introductory remarks of Senator Metcalf on S. 3341 (from the Congres-
sional Record-Senate, April 10, 1974)______________________________ 35
Copy of S. 3341 (as introduced) ---------------------------------- 313
Agency Comments :
Administrative Office of the U.S. Courts, Roland F. Kirks, Director,
dated June 19,1974--------------------------------------------- 40
Comptroller General of the United States, Hon. Elmer B. Staats, dated
June 4, 1974--------------------------------------------------- 40
Department of Defense___________________________________________ 42
"Present Cost of Operating Privately Owned Automobiles," by General
Services Administration, Federal Supply Service, Passenger and Trans-
portation Systems-------------------------------------------------- 42
(III)
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Annex 1: Page
Table-Annual automobile operation costs (standard size 1974
model) ----------------------------------- ---- 45
Table-Estimated cost of operating a compact size 1974 model
automobile -------------------- ------------- 46-47
Table-Annual automobile operating costs (compact size 1974
model) ------------------------------- ---- 48
Table-Estimated cost of operating a compact size 1974 model
automobile ------------------------------------------------ 49-50
Annex 2:
Table-Automobile operating cost (standard size 1972 model) ____ 51
Annex 3:
Table-Consumer Price Index______________ 51
Cost of Operating-a Privately Owned Automobile (POV)_____-__-_ - 51
Attachment 1-Table: Automobile operating costs______________ 52
"Study of Operating Costs for Privately Owned Aircraft," by General
Services Administration, Federal Supply Service, Passenger and Trans-
portation Systems-------------------------------------------------- 52
Annex 1:
Table-Operating Costs of Average General Aviation Aircraft,
by aircraft type-------------------------------------------- 56
Annex 2:
Table-Adjusted Operating Costs, 1969 (single-engine, piston
aircraft) -------------------------------------------------- 56
Annex 3:
Table-Operating costs, 1973 (single engine, piston aircraft)____ 57
Chart-Cost of Operating an Automobile, by U.S. Department of Trans-
portation, April 1974----------------------------------------------- 58
"Cost of Operating an Automobile", by L. L. Liston, Chief of the Vehicles,
Drivers, and Fuels Branch, Highway Statistics Division of the Federal
Highway Administration, and R. W. Sherrer, Economist in the Vehicles,
Drivers, and Fuels Branch_________________________________________ 59
Chart-Automobile Operating Costs-Bases for estimates ----------- 66
Table-Estimated cost of operating a standard size 1974 model auto-
mobile -------------------------------------------------------- 67-68
Table-Estimated cost of operating a compact size 1974 model auto-
mobile -------------------------------------------------------- 69-70
Table-Estimated cost of operating a subcompact size 1974 model auto-
mobile -------------------------------------------------------- 71-72
Table-Single room rates in selected cities (downtown areas) _. -------
73
Table-Hotel rates in Washington, D.C., May 1974__________________
74
Cost impact statement and agency comments on proposed increases
in privately owned vehicle and aircraft mileage allowances-__-__-_
75
Table 2-Estimated cost of operating a compact size 1974 model
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TRAVEL EXPENSE AMENDMENTS ACT OF 1974
THURSDAY, JUNE 6, 1974
U.S. SENATE,
SUBCOMMITTEE ON BUDGETING, MANAGEMENT,
AND EXPENDITURES OF THE COMMITTEE ON
GOVERNMENT OPERATIONS,
Washington, D.C.
The subcommittee met at 10 a.m., pursuant to call in room 3302,
Dirksen Senate Office Building, Hon. Walter D. Huddleston
presiding.
Present : Senator Huddleston.
Also present: Vic Reinemer, staff director; E. Winslow Turner,
chief counsel; Alan Chvotkin, professional staff member, and Jeanne
McNaughton, chief clerk.
Senator Huddleston. The subcommittee will come to order.
OPENING STATEMENT OF SENATOR HUDDLESTON
Today the Subcommittee on Budgeting, Management, and Expendi-
tures is conducting a hearing on the bill S. 3341, introduced by Senator
Metcalf and, at his request, I am presiding at this hearing.
S. 3341 would increase from $25 to $35 the per diem expenses paid
to Federal employees traveling on official business. It would increase
from 12 cents to 14.5 cents the mileage rate for the use of a privately-
owned vehicle used on official business. Additionally, the bill calls .For
a continuous study and quarterly reports with the appropriate adjust-
ments of employee travel costs by the Comptroller General.
There is apparent unanimity among Members and organizations
that the current per diem and mileage structure is in need of revision.
S. 3341 seeks to provide that revision. However, the unanimous agree-
ment does not extend to all of the particulars of the bill.
The hearings today will provide an opportunity for those groups
and Government agencies most intimately involved with the question
of reimbursement for official travel to present their views on the poli-
cies, procedures and prices that should be included in this legislation.
I believe that all concerned Federal employees are represented today.
Additionally, the General Services Administration with responsi-
bility for executive branch supervision and control is represented as
is the General Accounting Office.
Chairman Metcalf has indicated a desire to see this bill move rapidly
through the legislative process. I agree. Each day that Federal
employees are required to travel under the present rate structure pre-
sents a new obligation for them to lose money.
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Without objection, I will include in the record at this point a letter
to me from Senator Stafford on the bill.
[The information referred to follows:]
U.S. SENATE,
Washington, D.C., June 5, 1974.
Hon. WALTER D. HUDDLESTON,
Subcommittee on Budgeting, Management and Expenditures, Government Opera-
tions Committee, U.S. Senate, Washington, D.C.
DEAR WALTER: It would be appreciated if this letter might be made a part of
the hearing record of the Subcommittee on Budgeting, Management and Expendi-
tures of the Government Operations Committee in connection with S. 3341, a bill
introduced by the distinguished Senator from Montana, Mr. Metcalf.
The writer quite frankly is an active pilot and from time to time travels by
private aircraft (single engine) from Washington to Vermont and back on of-
ficial business.
Since in my experience it costs considerably more than 12 cents a mile to fly
an airplane suitable for cross country-travel, I would respectfully ask that the
Subcommittee consider making the allowance for aircraft travel at least equal
to that which the Subcommittee might propose for travel by private automobile.
ROBERT T. STAFFORD,
U.S. Senator.
Senator HUDDLESTON. Our first witness will be Mr. James Campbell,
Associate General Counsel of the General Accounting Office. Mr.
Campbell, you might want to identify the gentlemen who are with you
and proceed with your statement.
STATEMENT OF JAMES M. CAMPBELL, ASSOCIATE GENERAL
COUNSEL, GENERAL ACCOUNTING OFFICE; ACCOMPANIED BY
EDWIN J. MONSMA, DEPUTY ASSISTANT GENERAL COUNSEL;
JOHN MILLER, ATTORNEY WITH GENERAL COUNSEL'S OFFICE
STAFF
Mr. CAMPBELL. Thank you, Mr. Chairman. On my right is Mr. Ed
Monsma, Deputy Assistant General Counsel. On my left is Mr. John
Miller, attorney with the General Counsel's Office staff.
Mr. Chairman, we are pleased to be afforded this opportunity of
appearing before your committee to testify on S. 3341, which would
revise upward the mileage and per diem rates, as well as the limitation
on reimbursement for actual expenses of subsistence payable to civilian
employees traveling on official business within the continental United
States.
A major feature of the bill is the provision for automatic adjust-
ments in mileage rates.
By letter dated June 4, 1974, B-5019, the Comptroller General set
forth the views and recommendations of the General Accounting Of-
fice upon S. 3341. It is requested that a copy of that letter be incor-
porated in the hearings of this committee.
Senator HUDDLESTON. Without objection, it is so ordered.'
Mr. CAMPBELL. The General Accounting Office fully endorses the im-
mediate increases in per diem rates and in the actual expense reim-
bursement ceiling that would become immediately effective if the bill
is enacted into law.
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While we haven't conducted a specific study of the mileage rate or
per diem rates, we have noted that the last change in per diem rates
occurred back in 1969 and since that time the cost of living index has
increased approximately 28 percent.
We also have noted numerous instances wherein our own employees
traveling on official business have objected by reason of the fact that
their reimbursement for their expenses has not been sufficient to cover
the expenses of the official travel.
The General Services Administration has conducted a survey which
would apparently justify the increase in the mileage rate, and I under-
stand sometime ago they conducted a survey in connection with per
diem rates also.
I assume that they are in a position to give you full particulars of
the results of those surveys.
We do know that with respect to statutory mileage rates, there has
been no change in them since 1961. In the meantime, as you know,
cost of vehicles have risen, cost of maintenance has risen, costs of op-
eration have risen. So we feel that the rates provided in the bill cer-
tainly are needed.
We also favor the objective of providing an administrative mecha-
nism for adjusting mileage rates based upon a continuing study of the
cost of operating vehicles without the necessity for enactment of spe-
cific legislation authorizing each such adjustment.
We also think that your committee should give serious consideration
to providing similar authority under which per diem rates, as well as
the limitation on actual expense reimbursement, could be adjusted
from time to time based upon changes in subsistence costs without
further action by Congress or subject to the legislative veto procedure.
. Our Office is strongly opposed, however, to those provisions of
S. 3341 which vest in the Comptroller General the function of con-
ducting a continuous study on vehicle operating costs and submitting
to the President periodic adjustments in mileage rates based upon
such study.
The compiling of mileage statistics upon the basis of which the au-
thorized mileage rates would be determined is primarily a function
of the executive branch and the great majority of the employees who
would be affected thereby are employed by the executive branch.
Further, the resources of the General Accounting Office can more
effectively serve the Congress and the American taxpayer through the
review of executive branch actions rather than through the perform-
ance of administrative functions.
Our firm opinion is that this function should be vested in the
President or such officer in the executive branch as the President may
designate.
The General Services Administration presently is vested with the
function of promulgating travel regulations which govern the travel
benefits of the majority of civilian employees of the Government and
in our opinion the function of conducting the continuing study con-
templated by S. 3341 appropriately could be vested in that agency.
In our judgment the General Accounting Office should exercise an
oversight function to insure that the agency charged with the respon-
sibility for conducting the continuing study uses an appropriate base
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for determining costs of travel and follows appropriate procedures
to accomplish the result: contemplated by the bill.
This concludes my statement Mr. Chairman. We shall be happy to
attempt to answer any questions you or the members of the committee
may have.
Senator HUDDLESTON. Thank you very much, Mr. Campbell. Do
the other gentlemen have statements?
Mr. CAMPBELL. Do you have anything to add, either one of you
gentlemen?
Senator HUDDLESTON. You indicate, Mr. Campbell, that you do not
believe the General Accounting Office is the agency to conduct the
survey report on mandatory increases. Which agency within the ex-
ecutive branch do you believe would be best suited?
Mr. CAMPBELL. In my judgment, I would think the General Serv-
ices Administration has had more experience in that. They have con-
ducted recent studies both as to mileage and as to per diem rates.
While we have not conducted any review of those studies, we have
no reason to believe that they have been based on any invalid
assumptions.
Senator HTDDLESTOn. Your agency, then, has not evaluated the re-
cent studies you refer to?
Mr. CAMPBELL. No, we have not. I think this : I think by the over-
sight function that may be vested in our agency if our recommenda-
tion is accepted, that what you really have is a double-barrel
assurance.
First, you have one agency charged with the responsibility of con-
ducting these studies and making the recommendations, and you have
the General Accounting Office which would, in effect, act as a watch-
dog over the studies that are presented to see that they are in sufficient
form and content and reasonably reflect the actual cost of official
travel in the United States today.
Senator HUDDLESTON. The bill suggests that continuing studies be
made, with the possibility of these adjustments every 3 months. Do you
view this as feasible-having an automatic mechanism that would put
increases into effect on the basis of increased costs that might be de-
termined by a study?
Mr. CAMPBELL. It could operate that way. I personally feel-and the
Office has taken no official position on this, we really haven't con-
sidered it too much-that perhaps 3 months is a little too frequent to
conduct the studies. Perhaps once every 6 months should be adequate.
Senator HUDDLESTON. Do you foresee the possibility that this might
also result in a downward reduction?
Mr. CAMPBELL. Conceivably it could. I think it should.
Senator HuDDLESTON. If it reflects actual costs?
Mr. CAMPBELL. If it reflects actual cost reductions. I don't foresee
it happening in the near future.
Senator HUDDLESTON. If the executive branch is given this responsi-
bility in the bill, reviewing and reporting, what type of oversight
responsibility would you see for the GAO?
Mr. CAMPBELL. I would think that the General Accounting Office
ought to. If they don't examine the results of each and every survey
that they make, I think they should periodically take a look at the
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5.
practices and the methods by which the GSA is conducting these
surveys and developing these costs, to see that they are based upon
sound principles.
Senator HUDDLESTON. Primarily to determine if the procedure is
correct?
Mr. CAMPBELL. Yes. I think it would be a great duplication of effort
for the General Accounting Office to go out and verify each fact and
figure that GSA comes up with, but at least we could examine very
carefully the base that they use for developing this information.
Senator HUDDLESTON. You didn't mention to GAO position on the
various rates that would be paid for use of privately owned auto-
mobiles, vehicles. Does the GAO have a position on this?
Mr. CAMPBELL. Do you mean the 14.5 cents provided in the bill, sir?
Senator HUDDLESTON. Yes, that is correct.
Mr. CAMPBELL. We don't have a position. We don't know exactly
what it should be because we have conducted no study. It seems to me
that based upon substantial increases in costs of living since these
mileage rates were last developed back in 1961-the cost of living
has risen approximately 60 percent since that date-and since you are
only advancing the mileage rate 2.5 cents, that this is not an unreason-
able figure.
Senator HUDDLESTON. Do you have any suggestions on how the
language requiring written authorization for use of a privately-owned
vehicle might be written so as to reflect both the committees intent
and not present an unnecessary hardship on Federal employees?
Mr. CAMPBELL. It is difficult to really say whether or not it does. I
would think in most instances if the bill is properly administered and
there is no abritrary action on the part of the official in refusing to
grant the use of a privately owned automobile in appropriate cases,
there shouldn't be hardship.
In the event you do have some arbitrary action on the part of the
authorizing official, then you would have hardship. I don't know how
you could prevent that in legislation.
Senator HUDDLESTON. It seems to be a problem.
You pointed out correctly that S. 3341 doesn't provide correspond-
ing increases for the legislative branch of Government. Do you think
the GAO ought to conduct a study and report on increases for the
legislative branch, too?
Mr. CAMPBELL. No. I think that is primarily a matter for Congress
to decide. Actually, I guess the House does it by House rule and the
Senate does it by legislation.
Senator HUDDLESTON. It seems like Congress ought to be able to take
care of itself, then.
Mr. CAMPBELL. Right.
Senator HUDDLESTON. The bill doesn't address itself to the question
of the use of private aircraft by public employees.
Do you have any position on that-should the bill be extended to
include costs incidental to the use of private aircraft as well as the
mileage that is available to them?
Mr. CAMPBELL. I don't know how much travel employees do by kri-
vately owned aircraft. I don't know that there is a real problem on that
today. Do you have any information on that, Ed?
35-576 0 - 74 - 2
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Mr. MONSMA. I think a couple of years ago there was a move on to
get a special mileage rate for use of privately owned aircraft, and
OMB and the Interior Department and the Agriculture Department
do have some use of privately owned aircraft which is really advan-
tageous to the Government in some specific circumstances.
The executive branch did make a study, and as I recall, they came
up with a figure of about 22 cents a mile.
I think that there has been information developed in the executive
branch which would provide a basis for incorporating a specific mile-
age rate for airplanes, and hopefully, the General Services Adminis-
tration will be prepared to furnish that to you.
Mr. TURNER. Mr. Campbell, I wonder if you might comment on the
suggestion that there are areas in the country that are much more ex-
pensive than other areas. Those who are going to testify, I believe,
will comment on this disparity of costs between different areas.
Do you think it is a good idea to try to get some kind of flexibility
in the payment of per diem to reflect that?
Mr. CAMPBELL. We really haven't given too much consideration to
that particular problem. We do know that certainly there are high-
cost areas in the country in comparison to other areas.
There might be some problems in determining exactly what the con-
fines of these high-cost areas are. For instance, New York City is cer-
tainly a high-cost area, San Francisco a high-cost area, but how far
out into the metropolitan area of those cities does that high cost
prevail?
I don't know that we are in a position to say yes or no to a question
like that. I certainly think it warrant-, thorough consideration.
Mr. TURNER. You say in your statement : 'We propose that the
Comptroller General be directed to conduct a study of the actual
costs of employee living expenses while in travel status for the
Government."
So I guess the best we can say is that if in fact you are so ordered to
conduct a study, that you will take into consideration this diversity of
costs.
Mr. CAMPBELL. I would think we would, yes, if we are ordered to
do so.
Mr. TURNER. Also, would it not be helpful to make a study of what
the private sector pays for reimbursement of its employees when they
are in a status similar to Government employees, to see what relation-
ship the private sector has to the Federal sector, as we have looked at
private salaries vis-a-vis Federal salaries?
Mr. CAMPBELL. I think it certainly would be appropriate to look
at the private sector. The problem is in the private sector whether they
grant the same type benefits to all employees depending upon their
status and salary in a private organization.
It may be that the top level employees get very great benefits in
comparison to what the lower salaried employees would receive.
So I don't know what base you would use in the private sector to
apply to Government employees, all of whom receive the same.
Mr. TURNER. You could have some kind of cost comparability by
salary or position status, and that sort of thing.
Mr. CAMPBELL. I think it should be looked at.
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7 .
Senator HUDDLESTON. Thank you, Mr. Campbell and gentlemen.
Mr. Ronald Zechman, Associate Administrator for Federal Man-
agement Policy of the General Services Administration. .
STATEMENT OF RONALD E. ZECHMAN, ASSOCIATE ADMINISTRA-
TOR FOR FEDERAL MANAGEMENT POLICY, GENERAL SERVICES
ADMINISTRATION; ACCOMPANIED BY ROBERT CHANDLER,
CHIEF OF PASSENGER TRANSPORTATION SERVICES BRANCH,
FEDERAL SUPPLY SERVICE; GORDON YAMADA, DIRECTOR OF
MANAGEMENT SYSTEMS AND SPECIAL PROJECTS, OFFICE OF
FEDERAL MANAGEMENT POLICY; ED DUIGNAN, CHIEF COUNSEL,
FEDERAL MANAGEMENT POLICY, GENERAL SERVICES ADMIN-
ISTRATION
Mr. ZECHMMAN. Good morning, sir. My name is Ronald E. Zechman,
Acting Associate Administrator for the General Services Administra-
tion. I would like to introduce the members of the staff who are sup-
porting me.
To my far left is Mr. Robert Chandler, Chief of Passenger Trans-
portation Services Branch, Federal Supply Service; to my immediate
left is Mr. Gordon Yamada, Director of Management Systems and
Special Projects, Office of Federal Management Policy; and to ray
right is Ed Duignan, Chief Counsel, Federal Management Policy,
GSA.
Mr. Chairman, I appreciate the opportunity to appear before this
committee today on behalf of Arthur F. Sampson, Administrator,
GSA, to present our comments on S. 3341, relating to per diem and
mileage expenses.
We strongly support the overall objective of the proposed legisla-
tion to increase per diem and mileage allowances. We do, however,
have some differences in the manner in which these increases are im-
plemented and, therefore, have submitted a draft bill to Congress., a
copy of which is attached, for the record.
[The information referred to follows:]
A BILL To revise certain provisions of title 5, United States Code, relating to per diem
and mileage expenses of employees and other individuals traveling on official business,
and for other purposes
Be it enacted by the Senate and House of Representatives of the United States
of America in Congress assembled, That subchapter I of chapter 57 of title 5
United States Code, is amended as follows :
(1) In Section 5701, by striking out "and" at the end of paragraph (5),
by striking out the period at the end of paragraph (6) and inserting in
lieu thereof " ; and", and by adding the following :
"(7) 'major city locality' means a city or metropolitan area designated
as such by regulation prescribed under section 5707 of this title."
(2) In section 5702(a), by striking out "$25" and inserting in lieu there-
of "$30" ;
(3) By changing the language of section 5702(c) to read as follows:
"(c) Under regulations prescribed under section 6707 of this title, the
head of the agency concerned may prescribe conditions under which an em-
ployer may be reimbursed for the actual and necessary expenses of the trip,
not to exceed an amount named in the travel authorization, when the maxi-
mum per diem allowance would be much less than these expenses, due to-
(1) the unusual circumstances of the travel assignment, in which case
the amount named in this travel authorization may not exceed-
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(a) $50 for each day in a travel status inside the continental
United States ; or
(b) the maximum per diem allowance plus $23 for each day in a
travel status outside the continental United States ; or
(2) a travel assignment to a city or metropolitan area designated by
regulations prescribed under section NOT of this title as a 'major city lo-
cality', in which case the amount named in the travel authorization may
not exceed the amount stated in the regulation so designating the
locality."
(4) In section 5703(c), by striking out "$25" and inserting in lieu thereof
"$30".
(5) In section 5703(d), by striking out "$40" and "$18" and inserting in
lieu thereof "$50" and "$23", respectively.
(6) In section 5704(a) by:
(a) striking out "12 cents" and inserting in lieu thereof "18 cents" at
the beginning of paragraph (2) ;
(b) striking out the words "or airplane" at the end of paragraph (2)
and inserting after the semicolon the word "or"; and
(c) adding at the end thereof a new paragraph as follows:
"(3) 24 cents a mile for the use of a privately owned airplane;"
(7) In Section 5704 (b) by :
(a) striking out the word "and" after semicolon at the end of para-
graph (2) ;
(b) striking out the period at the end of paragraph (3) and inserting
in lieu thereof "; and" ; and
(c) adding at the end thereof a new paragraph as follows :
" (4) landing and tiedown fees."
SEc. 2. The seventh paragraph under the heading "Administrative Provisions :
in the Senate section of the Legislative Branch Appropriation Act, 1957 (70
Stat. 360, as amended, 2 U.S.C. 68(b) ), is amended by striking out "$25" and
"$40" and inserting in lieu thereof "$30" and $50", respectively.
Mr. ZECHMAN. Specifically, our draft bill proposes the following :
Raise per diem maximum from $25 to $30 (rather than $35 as in
S.3341).
Raise actual subsistence maximum from $40 to $50 (same as
S. 3341).
Raise per diem maximum for travel outside of the continental
United States from $18 to $23 (not contained in S. 3341).
Set special locality rates for major cities where the maximum per
diem rate would be inadequate to meet the average cost of lodgings
and meals (not contained in S. 3341).
Set statutory maximums of $0.18 per mile for automobiles and $0.24
per mile for airplanes-compared with $0.145 and $0.12, respectively,
to be adjusted on an actual cost basis quarterly in S. 3341. Landing
and tiedown fees not included in S. 3341 are also provided in our draft
proposal.
Executive Order 11609 of July 22, 1971, vested in the Administrator
of General Services the authority of the President to prescribe regula-
tions under 5 U.S.C. 5707. The current Federal Travel Regulations,
promulgated by the General Services Administration, are those which
became effective on May 1,1973 (41 CFR 101-7).
In view of rising costs associated with travel, especially in major
metropolitan areas, the General Services Administration initiated a
study to determine the adequacy of present travel allowances for
Federal employees.
The study involved approximately 13,000 actual employee travel
experiences representing 63,000 man-days of travel taken over a period
of 3 months in 1973, and included 22 agencies of the executive branch.
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This reflects seven-tenths of 1 percent of the total number of man-
days of travel. Results show that the present $25 per diem rate was
inadequate for over 50 percent of the reported travel.
This was due, primarily, to the increased average costs of approxi-
mately 24 percent in food and lodging expenses since 1969, the year of
the last per diem increase.
The Consumer Price Index level reflects this fact. The study also
disclosed that actual subsistence expense allowances of up to $40 per
day were authorized in only 3 percent of the travel reported.
We, therefore, propose in our draft bill that the maximum statutory
per diem allowance be increased from $25 to $30; the maximum statu-
tory actual subsistence expenses in the continental United States be
increased from $40 to $50 per day; and the permissible amount in addi-
tion to the maximum per diem allowance established for the locality
for travel outside the continental United States be increased from $18
to $23 per day.
Section 2 of our, draft bill would provide the same changes in the
$25 and $40.1imitations imposed upon the Senate by the Legislative
Branch Appropriation Act, 1957, as amended.
In spite of these increases, the allowances will not be sufficient to
take care of those employees traveling to major cities such as New
York and San Francisco. Based on published commercial lodging and
meal expenses, it would require an average of $45 per day for adequate
lodgings with three average meals, including tips and taxes.
For that reason, it is proposed in our draft bill to permit the reim-
bursement of actual and necessary expenses of a trip when they are
much more than the maximum per diem allowance, due to a travel
assignment to such major cities and metropolitan areas. Under present
law this reimbursement is permitted only when the higher expenses are
due to "unusual circumstances."
Based on a $30 statutory per diem rate, it is anticipated that there
would be approximately 10 major city areas at the present time where
travel expenses would exceed the maximum per diem rate by 10 per-
cent or more and would therefore be designated as a "major city
locality."
A maximum rate would be stated in the governing regulations for
each major city area so designated, but in no case will the rate estab-
lished exceed the $50 statutory maximum actual expenses allowance.
It is further anticipated that the maximum locality rates would be
reviewed at least annually and adjusted, as appropriate, within the
proposed ceiling of $50 per day. These major city locality rates would
be prescribed as maximums only, and when actual subsistence expenses
incurred in any one day are less than the maximum authorized, the
traveler will, of course, be reimbursed only for the lesser amount.
I wish to call to the attention of the chairman that due to an over-
sight the sentence applying to the $50 per day maximum to the major
city locality rate was omitted from our draft substitute bill. The
sentence, "In no case may the amount stated in the regulations exceed
$50 per day," should be added to the last sentence of paragraph 5702
(c) (2) of the proposed draft bill.
We believe this major city locality rate method to be a means of
meeting the demonstrated needs of Federal employees who must travel
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on official business, which is preferable to increasing the maximum per
diem rate to a level sufficient to meet these particular circumstances of
travel.
It will relieve the situations which are now causing most of the
hardships experienced by Federal employee travelers, while the pro-
posed increase in the maximum per diem rate will adequately cover
the remainder.
We feel that the $35 per diem proposed in S. 3341 would not be
sufficient to cover the cost of travel to some major cities, but be too
high for the majority of travel.
Under our proposed draft bill, the maximum yearly cost impact
based on a per diem increase to $30 would be approximately $24 million
over the present rate ($25), plus an additional increase of approxi-
mately $10 million based on the establishment of the major city
locality rate method.
We estimate an across-the-board increase to $35 as proposed in
S. 3341 would in comparison have a maximum cost impact of approxi-
mately $47 million over the present $25 rate. Thus, calculations based
on our sample indicate that our proposed draft bill would result in a
lower cost of up to $13 million for travel of some 9.4 million man-days
per year.
While these figures are based on payment of maximum per diem
for all travel, which would not be the actual case, it does serve to
support our opinion that the proposed draft bill would satisfy the
traveler's needs, yet result in lower costs to the Government than
S. 3341.
A recent study by GSA of automobile operating costs indicates that
the cost of operating a privately owned automobile as of April 1974
was 14.4 cents a mile.
Another study which we recently completed relates to costs associ-
ated with operating a privately owned airplane. As determined in this
study, the cost of operating a privately owned, single-engine, piston
airplane, as of December 1973, was approximately 20.6 cents per mile,
exclusive of landing and tiedown fees.
Although our studies indicated operating costs of 14.4 cents per
mile for privately owned automobiles and 20.6 cents per mile for
privately owned airplanes, we recommend that the statutory rates be
set at 18 and 24 cents per mile, respectively. This would allow us
latitude in prescribing reimbursement rates within the statutory max-
imums that will equate to the current costs of operating these
conveyances.
Additionally, we recommend that 5 U.S.C. 5704(b) be amended to
permit reimbursement for landing and tiedown fees in addition to
the mileage allowance prescribed for privately owned airplanes.
This proposal is not in S. 3341. Although similar costs such as
"parking fees," "ferry fares," and "highway tolls" may be separately
allowed under 5 U.S.C. 5704(b) there is no clear or specific statutory
language for separately allowing the expenses of "landing" or "tie-
down services" when a privately owned aircraft is authorized for use
on official business.
A revision in the law to specifically allow separate reimbursement
for these costs will insure a closer relationship between expenses in-
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curred and the amount of reimbursement and will standardize the
allowances as they relate to both automobiles and airplanes.
The estimated annual costs impact for each '1 cent per mile increase
for privately owned vehicles is $3.8 million and for privately owned
airplanes is $11,000.
If the rates for reimbursement are set at 15 and 21 cents, the esti-
mated annual total cost impact would be $11.5 million more than
today's inadequate allowance. Since both S. 3341 and our proposal
are designed to provide reimbursement based on current costs, there is
no advantage in terms of lower mileage costs for either bill.
The Office of Management and Budget advises us that these in-
creases in travel costs will be largely absorbed by the individual agen-
cies within their available appropriations.
This concludes my prepared statement, Mr. Chairman. I will be
happy to respond to any questions you may have.
Senator HUDDLESTON. Thank you very much.
In arriving at your figure of $30 per diem'rather than the $35 as the
bill proposed, were you dictated more by the costs to the Government
of meeting this increase or by the actual costs of living for the em-
ployees?
Mr. ZECHMAN. It is based on increased cost of travel to the employee
as revealed by our recent studies and the Consumer Price Index
changes since the last per diem increase in 1969.
Senator HunDLESTON. You mentioned that your figure of $30 a day
would cost considerably less, of course, than a figure of $35.
I was wondering whether you were principally concerned with the
cost to the government or the adequacy of reimbursement for the em-
ployee.
Mr. ZECHMAN. Yes, sir. In most parts of the country, Mr. Chairman,
the $30, we feel, would be adequate. It is in the major metropolitan
areas where a higher rate is required.
Senator HuDDLESTON. You mentioned some 10 areas, which are
major, special areas.
Mr. ZECHMAN. Yes.
Senator HuDDLESTON. What kind of bookkeeping and administrative
problem would be involved in having a differential in major areas?
Mr. ZECHMAN. Very little. It would basically entail similar admin-
istrative costs as are now being encountered under the present allow-
ances. The traveler would be paid the locality rate for the metro-
politan city area listed on the travel orders. The metropolitan area
will be established in a manner such as defined by the Bureau of the
Census.
Senator HUDDLESTON. Do you have any estimate on the number of
Federal employees who use their own cars for Federal business?
Mr. ZECHMAN. We do not have this specific total, sir. We have con-
ducted studies from which some estimates can be made. I have data on
eight agencies and it is related in miles. I do not have the number of
vehicles, but for eight of the Cabinet agencies, it comes to 231 million
miles paid at the 11-cent rate which is based on use of the POV
when it is advantageous to the Government. However, there are two
additional rates of reimbursement when use of POV is for the con-
venience of the employee. We have no mileage data for this travel.
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Senator HUDDLESTON. Is it fairly well distributed among the various
departments?
Mr. ZECHMAN. No. I think primarily in the Treasury Department
because the Internal Revenue Service has 90 million miles; HEW has
42.4; HUD approximately 42 million, Commerce 23, and Agriculture
15.
Senator HuDDLESTON. Do you have the figures for the expenditure
necessary to cover that mileage?
Mr. ZECHMAN. You would have to project that at 11 cents per mile
times 231 million miles. This results in a total of $25.4 million.
Senator HuDDLESTON. Have you analyzed S. 3341 as it was written?
Mr. ZECIIMAN. Yes, sir.
Senator HuDDLESTON. With the idea of arriving at any figure of
cost, the total cost of it if it were in effect based on the present travel
volume?
Mr. ZECHMAN. Yes, sir. In our statement, we made a comparison.
This comparison assumed all travelers receive the maximum rate-our
calculations show that S. 3341 would cost $47 million compared to
$34 million for our proposal.
Senator HuDDLESTON. In your proposed language in section 5707,
you allow flexibility for each agency to determine the conditions under
which an employee might be reimbursed for the actual and necessary
expense of travel.
Does that cause problems? Why not centralize this determination
rather than have a multiplicity of reimbursement schedules?
Mr. ZECHMAN. The law provides that the head of an agency may
prescribe conditions under which an employee may be reimbursed for
the actual and necessary expenses of travel. Our travel regulations
provide guidelines to the agencies for determining each agency a cer-
tain amount of conditions justifying reimbursement of actual and
necessary expenses.
As between Agriculture and DOD, there are a number of
variances.
Senator HUDDLESTON. It does result at least in the possibility that
some employees would be favored in reimbursement over others, and
some inequity may develop.
Mr. ZECUMAN. Yes, for example, the Department of Agriculture,
travels primarily to the rural areas of the country where the cost of
lodging may not be as burdensome as to an agency which travels to
metropolitan areas.
Sentor HUDDLESTON. Did your study develop any comparisons be-
tween what private enterprise pays in the mileage allowances and per
diem as compared to the Government?
Mr. ZECHMAN, Yes. One of the two sources available to us in making
the study is a document prepared by Runzheimer & Co., Inc., Roches-
ter, Wis. The other is the Bureau of Labor Statistics. We found that
the private sector relies very heavily on the Runzheimer Meals/Lodg-
ing Cost Index, which provides lodging and meals for 100 major cit-
ies. They update 25 cities each quarter. So once a year every city is up-
dated. They give three ranges : a low, medium, and high. The figures
that we used are the medium range for all metropolitan areas.
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Senator HuDDLESTON. Under mileage, your study developed cost of
something just under 14.5 cents. You are proposing 18 cents per mile?
Mr. ZECHMAN. Yes, sir. As a statutory maximum.
Senator HuDDLESTON. What is the reason?
Mr. ZECHMAN. The reason for that, sir, is that with the fluctuation in
the price of gasoline and other operating costs of the automobile, we
would not have to come back to the Congress next year again. This
legislation would set the statutory maximum and GSA would by reg-
ulation prescribe the rate based on studies of the cost of operating an
automobile.
Senator HuDDLESTON. When was the date of your study?
Mr. ZECHMAN. It was in the latter part of 1973. The 14.4 cents was
updated as of April 1974.
Senator Hr1DDLESTON. But even since then there has been some in-
crease in gasoline at least.
Mr. ZECHMAN. Yes, sir. I would assume so.
Senator HUDDLESTON. I might point out that the Department of
Transportation's estimate for April 1974 was 15 cents.
Mr. ZECHMAN. Yes, sir. In fact it is 15.9 cents based on February
1974 prices published in the April DOT report. The difference is
caused by our adjustment of cost factors relating to depreciation
wherein we use a 5-year depreciation rate instead of the DOT 10-year
rate. Also our rate does not include parking, garaging, and tolls in-
cluded in the DOT mileage rate.
By the way, Mr. Chairman, the General Services Administration
would have no objection to the proposal that was submitted to this
committee by the General Accounting Office. We would strongly favor
that approach.
Senator HUDDLESTON. You have no objection to that.
Under your approach, though, on this flexible mileage allowance, a
maximum of 18 cents, a given agency or a given department could
maintain the present low figure.
Mr. ZECHMAN. The authority to prescribe reimbursement rates lies
with GSA. The agency would be required to adhere to whatever rates
we establish in the Federal Travel Regulations. We recently raised the
11-cent rate to .12 cents.
If we prescribe 14.4 cents, the agency would then be required to re-
imburse the traveler that amount.
Senator HUDDLESTON. It couldn't go any lower than that?
Mr. ZECHMAN. No, sir, not under the prescribed circumstances of
travel for that rate of reimbursement.
Senator HuDDLESTON. The suggestion is that the update be on the
basis of a quarterly one. Is this a reasonable length of time?
Mr. ZECHMAN. We would prefer to do it annually. However, I
think we should retain the flexibility. A good example would be what
occurred in the cost of operating a vehicle during the last 6 months,
during the energy crisis. I think it would only be prudent management
to review it on a more current basis.
However, in general, I think an annual basis would be satisfactory.
We have to take the factors at that time into consideration, sir.
Mr. TURNER. Mr. Zechman, we lust heard testimony from Mr.
Campbell of the GAO that indicated that there hadn't been a change
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in the motor vehicle reimbursement since 1961, where I believe it was
12 cents a mile.
Mr. ZECHMAN. That is the statutory maximum rate. It was only
recently that we authorized the use of the 12-cent rate which is the
statutory maximum that we can administratively authorize under the
present law.
Mr. TURNER. But that was the maximum?
Mr. ZECHMAN. Yes, sir.
Mr. TURNER. In that period of time, from 1961 to 1974, Mr. Camp-
bell suggested there was a 60 percent increase in the cost of living.
So I am a little bit concerned as to your recent study which says that
the cost of operating a privately owned automobile should be 14.4
cents and your recommendation as a maximum to be 18 cents.
Since 1961 there has been such a substantial increase in the cost of
living, I see your 18 cents as a maximum and perhaps the bulk of the
auto mileage reimbursement will be down around 14.4 cents. Isn't
that what you contemplate?
Mr. ZECHMAN. First of all, I don't know what the actual reim-
bursement was in 1961. It was something significantly less than 12
cents. There have been numerous changes over the years leading up
to eventually getting to 12 cents per mile in February of this year.
I think I am missing your point, though.
Mr. TURNER. No, I am just trying to find out in your recommenda-
tion for 18 cents whether or not that is going to be a maximum and
whether there is some floor that we can identify here.
Mr. ZECHMAN. That would be the maximum, sir. Right now, if
we enacted as of today, the cost would approximate 15 cents per
mile. That is the rate we would implement administratively in our
regulations.
Mr. TURNER. I guess my problem is that where the period of time
from 1961 to the present the maximum was 12 and perhaps the cost
was something less, that this 14.4 for the future is not sufficient to
be the floor. It should be something greater, because the cost of living
has jumped.
Mr. ZECHMAN. The 18 is statutory, but we would base the actual,
the reimbursable amount, whether it is 15 or 16, on the actual cost
that would be reported from our study.
At this point it could vary. As of today, we say we would imple-
ment 15 cents a mile as an adequate reimbursable figure.
Senator HUDDLESTON. You mentioned you thought the adjustments
ought to be made annually, but would the study be continuous?
Mr. ZECHMAN. Yes sir. It would be a continual update on the
information to point out to us whether there are major variances
which could occur on a short term basis. If our figures did not indi-
cate any major variances, we would issue an update on an annual basis.
However, if, as I cited earlier, sir, with the energy crisis or if gas
prices went up drastically, we would then come out with an interim
update to the regulations so that the Federal employees would be
adequately compensated for the costs for operating their vehicle.
Senator HUDDLESTON. Thank you.
Mr. ZECHMAN. Thank you, Mr. Chairman.
Senator HUDDLESTON. We will next hear from Vincent L. Connery,
president of the National Treasury Employees Union.
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STATEMENT OF VINCENT L. CONNERY, PRESIDENT, NATIONAL
TREASURY EMPLOYEES UNION; ACCOMPANIED BY MARY
CONDON GEREAU, DIRECTOR OF LEGISLATION; JERRY KLEPNER,
DIRECTOR OF COMMUNICATIONS
Mr. CONNERY. Mr. Chairman, I am accompanied here this morning
on my left by Mrs. Mary Condon Gereau, director of legislation; and
on my right, by Mr. Jerry Klepper, our director of communications.
My name is Vincent L. Connery. I am president of the National
Treasury Employees Union, formerly the National Association of In-
ternal Revenue Employees.
Our union has been elected the exclusive representative of more than
60,000 Treasury Department employees, including over 90 percent of
the employees of the Internal Revenue Service who are eligible to be
represented by a union.
We welcome this opportunity to comment on S. 3341, a bill which is
designed to remedy one of the most pressing problems faced today by
countless Federal employees who must travel or use their own auto-
mobiles as a regular part of their jobs.
Because of grossly inadequate mileage and per diem allowances, tens
of thousands of Federal employees are being forced to subsidize the
Government. They must, in effect, use their personal funds to supple-
inent cost which should be completely borne by the Federal Govern-
ment.
Employees of the Treasury Department, like those in other Federal
agencies, are required by the nature of their work to travel. Thousands
of these men and women who are employed by the Internal Revenue
Service, Bureau of Alcohol, Tobacco, and Firearms, and the U.S.
Customs Service are assigned away from their home office for periods
of several days, weeks, or even months to conduct audits, investiga-
tions, and other necessary duties.
Others, from time to time, are called in to regional and national
office meetings held in cities far from their work sites. In each instance,
these employees must stay in hotels or motels and, of course, incur
lodging and food expenses which are far greater than the present re-
imbursement rates.
Even when overnight travel is not required of them, these same em-
ployees, and scores of others, must use their own automobiles to con-
duct vital government business because of poor public transportation
and the failure of the General Service Administration to provide suffi-
cient Government vehicles.
In the Collection and Audit Divisions of the Internal Revenue Serv-
ice alone, ther are more than 20,000 employees who regularly use their
own cars for the convenience of the Government.
Most of these employees travel extensively, many more than 13,000
miles per year on Government business. When the present mileage al-
lowance of 12 cents is compared to the actual cost of operating an
automobile, which a recent Department of Transportation study 1 con-
cluded was 15.9 cents per mile, one can readily see that these employees
are losing 4 cents for each and every mile they drive on behalf of the
Government. For those employees who drive their own cars on Gov-
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ernment business more than 13,000 miles per year, the annual cost to
the employee is at least $250.
The employees of the Federal Government should not be forced to
bear a significant amount of the expense necessitated by their travel.
Strictly speaking, they are not. obligated to use their own cars on Gov-
ernment business ; however, if they did not, the entire enforcement
effort would collapse for lack of transportation.
To further penalize these officers by requiring them to operate their
own vehicles at a substandard rate of reimbursement is grossly unfair.
Therefore, we strongly urge the Congress to increase the mileage
allowance to the going rate according to Government studies at the
time of enactment.
As presently drafted, S. 3341 would boost the allowance to 14.5
cents per mile, which was the actual cost of operating a standard size
automobile at the time the legislation was introduced.
However, as I mentioned earlier in this testimony, the most recent
study by the Department of Transportation, which is attached to this
statement, shows that the cost has risen to 15.9 cents per mile.
In view of the rapidly escalating costs of operating a vehicle, the
legislation should be amended to provide for a reimbursement rate
that is commensurate with operating costs at the time the bill is signed
into law.
One of the most realistic features of S. 3341 is the provision that
the General Accounting Office conduct a continuing study of mileage
rates and that the rates should be adjusted quarterly based upon the
GAO cost reports.
This, then, would enable Federal employees to be reimbursed on a
continuing basis, under a cost operation rate that has been fairly
determined, thereby eliminating the necessity of legislating in this
area every few months.
We are convinced that the GAO, rather than the General Services
Administration which is administering the present program, should
conduct the cost studies and establish the rates. We have more confi-
dence in the congressional agency than we do in the executive branch
of the Federal Government, which has demonstrated little concern
for Federal employees in all matters that involve increased expendi-
tures.
For months, while the costs of operating an automobile were esca-
lating rapidly, the GSA clung to the provenly outdated 11-cent rate
even though the statute authorized a 12-cent allowance. Only after
tremendous pressure from our union, and many others, was brought
to bear on this agency did it finally relent on February 8 of this year,
and increase the allowance to the 12-cent statutory maximum.
In the meantime, tens of thousands of Federal employees continued
to lose a considerable amount of money which they should never have
been forced to pay out of their own pockets.
Even though the GSA did increase the allowance in February, the
fact is that its own studies showed that the cost of operating an auto-
mobile was actually 14.5 cents per mile as of the end of 1973.
It would seem reasonable to expect that GSA would have proposed
legislation to increase the mileage rate at least 6 months ago, but such
has not been the case. To our knowledge, GSA has done absolutely
nothing to relieve Federal employees from the burden of inadequate
mileage reimbursement rates.
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For these and many other reasons, the responsibility for determining
the mileage rates under S. 3341 should be placed in the General Ac-
counting Office.
Turning now to the matter of per diem, everyone knows that a $25
allowance is grossy inadequate. For example, such rates of reimburse-
ment in the local area are absurd if fairness and equity are the
criteria.
Commercial hotels in the area such as the Roger Smith charge $20
to $31 per day; the Statler Hilton charges $26 to $38 per day; the
Ramada Downtown charges $24 to $28 per day ; and the Holiday Inn
Downtown charges $22 to $26 per day.
Other major cities are the same or even hi her. To mention but a
few : In Atlanta-the Marriott charges $27 to 36 per day; the Hilton
charges $19 to $24 per day; the Sheraton charges $30 and up.
In St. Louis: the Marriott $25 to $32 per day; the Hilton $20 to $24
per day ; the Sheraton $20 to $24 per day.
In Boston : the Marriott $28 to $32 per day; the Hilton, $20 to $24
per day; the Sheraton, $23 to $33 per day.
In Los Angeles: the Hilton, $24 to $35 per day; the Sheraton, $28 to
$30 per day.
We are not advocating that employees should stay in top luxury
hotels, we are merely quoting standard commercial hotel rates. The
fact of the matter is that medium priced hotels and motels now charge
rates ranging from $20 to $40 per day.
It must be kept in mind that employees must also pay for their
meals out of the per diem allowance. As we all know, meal prices are
also escalating daily. The result is that Federal employees who are
required to travel are considerably out-of-pocket because of the re-
strictive $25 per diem allowance. And while the employee travels, his
family expenses continue at the same rate as if he were at home.
A summary of single room costs for medium-priced hotels in se-
lected cities is attached to this statement.' In smaller cities, rates are
likely to be lower, but it is to the metropolitan areas that most travel is
scheduled.
The vast majority of the Federal work force is located in and around
metropolitan cities, and it is to these areas, where the hotel rates are
the highest, that most Federal employees must travel on Government
business.
Therefore, we strongly urge the Congress to raise the per diem
allowance to at least $35 within the continental United States, as well
as to increase the per diem rate from $40 to $50 for expenses under
unusual circumstances.
In fact, we believe that in certain high cost cities such as New York,
San Francisco, Chicago, Dallas, Honolulu, Anchorage, and others, the
rate should be established by the Comptroller General based on studies
conducted by the GAO.
The same procedure as provided in S. 3341 for determining mileage
rates could be established for determining per diem allowances and in
turn, certain high cost areas should be identified and per diem rates in
those cities adjusted accordingly.
On behalf of the National Treasury Employees Union, I appreciate
this opportunity to share our views with the Congress. If there are any
questions, I will be happy to answer them at this time.
1 See p. 73.
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Senator HUDDLESTON. Thank you, Mr. Connery. You went into some
detail on the need for the special allowances in high cost areas that the
other two witnesses this morning have already testified on.
Did testimony that you heard from these two witnesses comply
pretty much with your thinking about that need?
Mr. CONNERY. They don't jibe with my experience, Mr. Chairman.
I was a Revenue Agent for 18 years before assuming this job. The
gentleman from GSA was unable to state what he was paying in 1961.
But I can tell you what he was paying while the maximum was 12
cents per mile, as he stated.
The Internal Revenue Service was paying 8. They had recently
moved up from 6. The Internal Revenue Service, as he indicated, was
probably the highest mileage user in the Federal Government and over
the years they have been absolutely the cheapest paying.
Senator HUDDLESTON. Are you suggesting the departments are pay-
ing different rates?
Mr. CONNERY. Yes, sir. As a matter of fact, in 1961, I had the ex-
perience of being in attendance at a grand jury. At that grand jury
there were various witnesses, many from the FBI and other investi-
gative agencies. In the course of waiting for my turn. I had occasion
to be chatting with these people and I learned that the FBI agent sit-
ting next to me was getting 10 cents.
My family, for example, farms in Kansas and at the time that I was
getting 8 cents, little old ladies that would call at the farm about
various Department of Agriculture studies and the like, were getting
10 and 11 cents then.
Senator HUDDLESTON. Is it your suggestion then that the rates ought
to be uniform throughout the Government?
Mr. CONNERY. I think that the rates that are being paid should be
the same in the particular local area, certainly. I don't know that I
would extend the same rate nationwide.
I doubt that I would because there are cost differences. There is a
great deal of cost difference in operating a car
Senator HUDDLESTON. I understand that. But should each depart-
ment have the same rate for the same service in the same area?
Mr. CONNERY. Yes, absolutely.
Senator HUDDLESTON. Back to my original question, both GAO and
the General Services Administration witnesses indicated a need for
areas to be designated as high cost areas, which you also support.
Does the bill itself and the suggestion in the bill submitted by GSA
comply with your thinking on that basis?
Mr. CONNERY. In large measure, Senator, but I would observe as I
started to a moment ago that I am not certain that an adjustment
based on the consumer price index would adequately get to the prob-
lem of operating an automobile.
Senator HUDDLESTON.Per diem would be the factor involved mostly.
Mr. CONNERY. Yes, but if the question went to hotel rates and per
diem, I think the Government should pay the same rate to everyone.
Senator HUDDLESTON. With variations in areas where the cost ob-
viously is higher than other areas?
Mr. CONNERY. Right.
Senator HUDDLESTON. You indicated you had more confidence in
surveys made by the legislative branch rather than the administra-
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tive branch. But you quoted from an administration study in the
Department of Transportation which had a somewhat higher figure,
15.9 cents per mile for automobiles.
Do you think there is any serious problem as to which agency or
which department or branch of Government conducts a survey as
long as the components of that survey and the procedures are accept-
able and the input in the study is essentially the same?
Is it a big question with you whether or not GAO or GSA should
have the responsibility?
Mr. CONNERY. Yes, sir. There very definitely is. Perhaps with some
of the caveats which you mention, I might be less concerned. The fact
of the matter is, as far as I know, no one understands how GSA ar-
rives at their costs today. _
I can recall being over at GSA a few years ago seeking their con-
sideration for an increase in the mileage allowances. While over there,
I, of course, challenged their statements.
You see, they based their position on 8 cents and 9 cents at that
time, which is just 2 or 3 years ago. They wouldn't go above 8 cents
or 9 cents. My understanding of their position was that, well, they
claimed to be able to operate their Government car fleet for 6.2 cents
a mile.
If the car was employed at the rate of 2,500 miles per quarter or
more
Senator HUDDLESTON. I think you ought to identify the time when
they were making that estimate.
Mr. CONNERY. That would be in 1970, that they claimed to be able
to operate the fleet for 6.2 cents a mile if the car was being driven
10,000 miles a year or more.
Actually, and based on that, they were claiming they couldn't afford
to authorize reimbursement for privately owned automobiles at more
than 8 cents or 9 cents because they could operate a GSA car for 6.
We discussed how the 6.6 figure was arrived at. I didn't see their
books and they didn't offer to show them.
From the discussion, it was quite apparent to me or quite question-
able in my mind as to the method of bookkeeping. As everyone knows,
based on the approach that the accountant or bookkeeper takes, you
can come up with all kinds of figures.
For example, as I understood the previous witness here he is talking
about a figure of the Department of Transportation, figures that were
bouncing up and down slightly and he said that they had charged the
depreciation rate from 7 percent down to 5 percent.
As I understand depreciation, and I think I do understand deprecia-
tion, a 5-percent rate of depreciation would simply be a 20-year life
any way you slice it.
If they are going on a 20-year life of a car, this is probably why
they claim to be able to operate it for 6 cents a mile.
Another thing, I asked them at that time. I said, of course, I can't
go into all of these things with you orally, but how can you claim to be
operating a car fleet when you concede that you don't have in the costs
the salaries of the people that are necessary for that fleet operation.
They just gave that a wave. Another thing, they were using-that
goes to the fairness of their thinking. They were claiming to have this
self-righteous approach of 6.2 cents per mile based on the fact that
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they were buying cars for $1,499.99. That is because under the law
they couldn't pay more than $1,500 for an automobile.
What they were getting out of Detroit were these underpowered,
stripped-down models that were dangerous to operate. At one point
in time, going back to 1961 or 1962, when Studebaker couldn't sell
Larks, that is what they were selling to GSA.
Senator HUDDLESTON. Do you see any logic in varying the rate based
on the kind of car that the employee uses?
Mr. CONNERY. He quoted from Mr. Runzheimer.
Mr. Runzheimer, who is located in Wisconsin, is nationally known.
Runzheimer reports are subscribed to and followed by all the leading
corporations in the United States and have been for many years.
I invited Dr. Runzheimer to accompany me to the Internal Revenue
Service in 1970. My proposal to the Revenue Service was that they
pay Dr. Runzheimer to do a study of their mileage practices and their
reimbursement practices, and based on his recommendations to con-
sider adjusting their reimbursement policies.
Dr. Runzheimer advised Mr. Preston, the Assistant Commissioner
for Administration of IRS at that time, that he could do such a study
for approximately $10,000 and that was refused by IRS. He also ad-
vised Mr. Preston at that time, and in my presence, that there were
essentially five general approaches to car reimbursement and that the
Government was using the fourth least desirable.
Senator HUDDLESTON. From what standpoint?
Mr. CONNERY. From his experience and studies and his reputation
as a national consultant in these matters, as I say, he told Mr. Preston
that there were five approaches to this question of reimbursing people
for travel expense..
Of the five, the fourth least desirable was the one that the Govern-
ment was using.
Senator HUDDLESTON. Back to the original question, do you think
there is any occasion in having a different rate for an employee who
drives a Volkswagen and one who drives a full-sized car? This 15.9
figure is based on a standard-sized automobile, as I understand it.
Many people drive cars that may get twice as much mileage to the
gallon.
Mr. CONNERY. I would agree on the equity of the matter. It would
seem to me to be obvious that someone shouldn't get as much for driv-
ing a Volkswagen as driving a standard sedan. It might be difficult to
administer as my colleague observed. I can tell you another thin, that
we operate group insurance plans and the group insurance claims on
accidents that come into us show that it is very dangerous to be driving
Volkswagens.
Senator HTDULESTON. I don't want to get into the question of which
cars ought to be driven. I am more concerned about the cost of
operation.
Mr. CONNERY. The reason I mentioned this is I was almost killed
one time in one of those Government cars because I am used to driving
a larger car myself, an 8-cylinder. Driving a 6-cylinder car that I was
not used to and coming up a ramli on one of these high-speed inter-
state highways, I was a] most run over by a truck.
Senator HUDDLESTON. Would you say most of your members prefer
to drive their own car, then, rather than' a Government car?
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Mr. CONNERY. Yes. Most of them do. There are some who don't, but
most of them do.
Mr. TURNER. Back on the Runzheimer report, you recall the gentle-
man from GSA showed us the book and indicated that he had looked
at it and taken the medium figure from the book as well as his own
study and came up with the $30 per diem.
You testified that when you were dealing with the Runzheimer re-
port your agency took the fourth lowest or something. Can you give us
any insight into the Runzheimer report with respect to an appropriate
per diem, and whether you think that $30 is the medium of the Runz-
heimer report?
Mr. CONNERY. I believe there is some misunderstanding, sir, because
the Runzheimer reports apply only to car use; their reports; their
studies ; their counseling goes only to car use and fleet operation.
They do not go into other aspects of travel such as per diem and so
forth, to my knowledge. The previous witness was talking about
Runzheimer or quoting him or referring to him; he was doing that in
connection with the car mileage, I believe, and various aspects of it.
I don't think., that he was or didn't understand him to be quoting
from, Runzheimer on, for instance, hotel rates, because I don't believe
to my knowledge, Runzheimer goes into that.
Mr. TURNER. On what basis do you think the increase or correspond-
ing decease for that matter should be made? You already testified that
GAO should undertake a continuous study and others have suggested
that this increase might be tied to cost of living indicator. What do
you think about that?
Mr. CONNERY. I think that there are better ways to go about it.
The cost-of-living indicators may or may not be accurate reflections of
the cost of operating a car. As a matter of fact, our most recent ex-
perience in this country would indicate that they are not.
I think that it is very simple these days to find out what the cost of
operating a car is. For example, the Runzheimer group have been
nationally known in this field for many years. They have this down to
a science.
They can find out these things if they really want to. It has been
our experience that the GSA has been totally dominated by the Office
of Management and Budget and when Mr. Ash or his predecessors
said what they were going to put into the budget GSA just fell im-
mediately in line. There was no consideration given to the equities of
the matter.
Mr. TURNER. Thank you.
Senator HUDDLESTON. What is your feeling on the frequency of any
future adjustments on a regular basis? The bill calls for quarterly,.
Mr. CONNERY. I certainly feel that there could be some justification
for a semiannual adjustment. I wouldn't stay we are wedded to every
3 months. I think that I would be somewhat leery, this day and aage,
of waiting for an entire year to pass. I think a 6-month period would
be reasonable.
Senator RUDDLESTON. That is all of the questions we have.
Thank you very much.
We will next hear from Clyde M. Webber, national president of
the American Federation of Government Employees. ..
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STATEMENT OF CLYDE M. WEBBER, NATIONAL PRESIDENT,
AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES; ACCOM-
PANIED BY CARL K. SADLER, LEGISLATIVE REPRESENTATIVE
Mr. WEBBER. I am Clyde Webber, president of the American Federa-
tion of Government Employees. Accompanying me is Carl K. Sadler,
our director of legislation.
On behalf of the American Federation of Government Employees
representing over 650,000 Federal employees in exclusive recognition
units, I wish to express appreciation to the subcommittee and its dis-
tinguished chairman, Senator Metcalf, for scheduling hearings on the
subject of per diem and mileage expenses of Federal employees.
The obvious reason for these hearings is the inadequacy of rates of
Federal per diem and travel allowances in the light of rampant infla-
tion. Because of this, the work of the Federal Government is handi-
capped by the increasing reluctance of many Federal employees to
undertake official travel requiring their personal presence outside their
official stations of duty.
As you know, one of the burdens in the conduct of official business
is the frequent requirement to attend meetings away from one's home
installation. For many, attendance at these meetings is onerous in any
case, even if the costs of hotels, meals, and mileage are properly
reimbursed.
In most instances today the per diem and travel allowances do not
cover expenses to Federal employees. For a long time now they have
sought to meet this problem by paying the extra costs from their own
salaries.
The continuing inflation of prices, both in the United States and
abroad, has aggravated an already difficult situation. Furthermore,
the depreciation and fluctuation of the American dollar on world
markets has placed another financial strain on American officials trav-
eling abroad on the Government's business.
We believe it is unwise fiscal policy for the Federal Government to
create a situation where Federal officials and employees shun the expe-
ditious discharge of those duties requiring travel solely because they
are penalized by inadequate per diem and mileage allowances.
For this reason, we welcome the introduction of S. 3341 and the
holding; of this hearing by your subcommittee.
We should like to observe, however, that in the 2-month interval
since the introduction on April 10, 1974, of S. 3341, the inflation rate
has already indicated that the increases proposed in this bill are not
likely to be adequate.
For this reason, we believe that for travel inside the continental
1?nited States, the normal maximum per diem allowance should be set
at $40 rather than the $35 stipulated in S. 3341.
Similarly, for exceptional situations, such as those for which provi-
sion is made in section 5702(c), we recommend that the rate be $60
instead of the $50 provided in S. 3341.
Further, we urge that the supplemental authorization for maximum
per diem allowance for each day of travel outside the continental
United States be set at $35 instead of the present $18.
If your subcommittee were to accept our proposals, we would hope
that you would provide conforming modifications in other sections of
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23
your bill, especially those relating to United States Code, title V, sec-
tions 5702(e), 5703(c), and 5703(d).
The present difficult situation in the matter of per diem has arisen
from the circumstance that the current statute makes no provision for
an automatic escalator in per diem maximum rates.
We believe it would be most useful if such an automatic escalator
could be provided. We suggest that this might be obtained by adding
a new subparagraph as section 5703(e) which could read as follows :
The per diem rates established in subsections (c) and (d) of this section shall
be automatically adjusted upward by increments of $1 whenever the Civil Serv-
ice Commission, pursuant to section 8340 of this title, orders the cost-of-living
adjustment of annuities.
We believe the simplest way of achieving this escalator is to tie it to
the cost-of-living adjustments for Federal annuitants based on Bureau
of Labor Statistics data, and to set it at the rate of $1 increments.
As you know, the cost-of-living adjustments for annuities now re-
quires an increase in the Bureau of Labor Statistics data of at least 3
percent maintained at that level for at least 3 additional months.
To overcome the timelag created by the 3-month waiting period, the
formula then provides an additional 1 percent on top of the highest
rate established in the 3-month base period.
Consequently, the Federal annuities are always adjusted a minimum
of 4 percent. However, the $1 increment we are proposing is slightly
less than 3 percent of $40 (or almost exactly 3 percent of the $35
proposed in S. 3341) and would remain only fractionally below 3
percent for the next several automatic escalator adjustments.
Consequently, we believe that our escalator proposal is fiscally con-
servative and also would remain practical for many years.
The increased cost in gasoline, diesel fuel, and in automobile repairs
and in automobile maintenance costs have been phenomenal as a result
both of the energy crisis and efforts to control exhaust pollution.
The Federal rate of mileage allowances are now totally unrealistic.
For this reason, we should like to propose that instead of 8 cents a
mile for the use of privately owned motorcycles, the Congress auth-
orize 12 cents; and instead of 12 cents for the use of privately owned
automobiles or airplanes, we ask Congress to authorize 20 cents.
We look with favor upon section 5704(b) in S. 3341 (beginning; at
line 10 of page 3 of the April 10, 1974, print of that bill) which pro-
vides for an escalator procedure to increase mileage allowances based
upon a quarterly survey by the Comptroller General of the United
States.
We welcome this provision for the adjustment of mileage and re-
lated allowances precisely because it would establish an automatic
mechanism permitting proper changes in allowances without the
need for frequent review by Congress.
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We see in this provision the reflection of the same kind of philoso-
phy which we were proposing for the automatic escalator in per diem
allowances timed to take place concurrently with the cost-of-living
adjustments in Federal annuities.
In summary, we enthusiastically welcome the decision of the sub-
committee to hold hearings on allowance increases for per diem and
mileage expenses of Federal employees.
We recommend, in light of rampant inflation, the installation of
a maximum of $40 in the continental United States with an excep-
tional allowance of $60 in certain situations. Taking into account the
depreciation of the dollar in world markets, we recommend an over-
seas supplemental of $35 in place of the present $18.
We earnestly and sincerely urge the provision of a per diem esca-
lator of $1 (approximately 3 percent of the base rate), tied to the
cost-of-living escalator provision of Federal annuities.
Finally, we recommend higher mileage allowances and endorse
completely the provision of an automatic escalator based on quarterly
surveys by the Comptroller General of the United States.
Mr. Chairman, we are most grateful to you for inviting us to testify
on this hearing, and we assure you of our fullest cooperation in seeking
to bring about this essential legislative reform in allowance for per
diem and mileage expenses of Federal employees.
Senator HUDDLESTO. Thank you, Mr. Webber.
On your permanent escalator arrangement for per diem, the
language you recited to be added to the bill mentions only adjusting
upward.
Does that prohibit a downward adjustment if that should be the
proper reflection of the cost-of-living index?
Mr. WEBBER. The way it really is is that this is a maximum we are
proposing, and that the maximum be adjusted. The reason that we are
having problems now is that the maximum has not been adjusted
through the years.
In many travel regulations, they have a provision that people
receive a certain portion of the per diem allowance for necessities other
than their hotel room. Agencies, I believe. now are paying $12, and
people are being reimbursed on the $12 rate for those necessities, plus
their hotel expense up to a maximum of $25.
So what it means is that if you are in a hotel room where the total
expense of the hotel room is in excess of $12 a day, that you simply
have to pay the balance of that hotel expense out of your own pocket
because the agency can reimburse you no more than $25.
On the other hand, if you happen to be in a location where the
hotel rate is $10 a day you currently get reimbursed only the $22.
So what I am saying is that, and I believe that the GSA man who was
here before us went into some detail on the two elements of per diem
and indicated they planned to continue in the future to take the hotel
element as a base and add the other increment to it and then you have
the maximum that you have to stay within.
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So if this is the current practice in most agencies at this time, I
would suggest that the maximum is there which would be helpful
where you get into the type of situations where there are just no rooms
at rates that you can afford to pay within the current maximum
allowance.
Coming to your question, you could diminish the rate if the cost of
living went down particularly if hotel room rates went down. I have
traveled since 1950 and I have never seen them go any way but up yet.
Senator IIUDDLESTON. The point I wanted to make, though, is that
the bill itself and your provision where you tie the rate to either a
survey of the actual cost of operating the car or the cost-of-living index
or whatever. It is flexible enough to be decreased if the situation merits
a decrease. So that flexibility is built into the measure which you are
proposing.
Your figures, of course, are somewhat higher than those that have
been suggested by the bill itself or by the two previous witnesses. What
justification do you have for those increased figures?
Mr. WEBBER. Again, the increased figures would be maximum which
would take into account some of the other things which have been
discussed in terms of high cost areas.
Certainly I do not envision the rate setting agency, whether it hap-
pened to be GSA or whether it happened to be the General Account-
ing Office authorizing the payment of auto expenses at the maximum
figure permitted under the legislation unless the costs of operating
vehicles reach that maximum which they have long since done under
the current legislation.
The same situation exists in the per diem area, that it is long since
past when the maximum per diem rates take care of the normal ex-
penses of traveling. If you have a cushion at the top that we are talk-
ing about here, it would provide the necessary flexibility which has
been discussed here to take into account the high cost of living areas.
Senator HUDDLESTON. Do you have any concern about the adminis-
trating agency, GSA or GAO or some other?
Mr. WEBBER. Certainly I prefer to see it in the legislative branch.
Our experience is precisely the experiences of Mr. Connery and we
have had three pay increases proposed during the last 3 years under
legislation established by Congress and two times Congress had to get
them straightened out and one time the courts.
So it causes you have a lack of confidence that the administration
is going to have concern for equity. They have concern for budget
constraints instead.
Mr. TURNER. First I want to clarify something. They are referring to
this $35 amount that is in the bill and you have recommended $40.
That is really a minimum per diem allowance, isn't it, not a maximum?
Mr. WEBBER. I would hope it would be minimum. But I would think
in everything I know about the administration of per diem, including
the way it is done now and what I heard proposed this morning, would
indicate that this $35 would be the maximum authorized under the
bill.
Mr. TURNER. Your recommendation is that it be $40, not $30?
Mr. WEBBER. That is right, the maximum.
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Mr. TURNER. Yet the only real study we seem to have to support
what this figure should be is the GSA study and the Runzheimer re-
port.
I still believe that he was talking about per diem in the Runzheimer
report. He may not have been. That figure is given to us by the GSA
as $30.
I am just wondering if you can give us any guidance as to why you
feel the $30, based on their study, is not adequate and why you think
the $40 which you are recommending is indeed adequate.
Mr. WEBBER. I believe I can furnish you-I know I can furnish you
additional data, statistical data. I thought it was well understood by
people who travel, who have traveled for a living, most of us do as to
what the current hotel bills are.
Mr. Connery attached to his testimony, I believe, a set of rates which
are here in Washington. If you are traveling to Atlanta, Dallas, Chi-
cago, San Francisco or Los Angeles, it is virtually impossible to get
a room under $20 a day in a medium-class hotel.
At a $25 per diem rate, which exists in the Government today and a
$12 allowance for meals out of that $25, you wind up with $13 to pay
your hotel bill.
The procedures which are used for the administration of per diem
are tying the meals to the hotel. If people stay, are required to stay in
moderate-priced hotels, reasonable hotels, decent hotels and they fur-
nish to the employer where they work a copy of the hotel bill to justify
the per diem rate, that is the way the amounts are determined at the
present time.
This $30 may be an average across the country. Certainly, I take it
it would not be in the metropolitan areas. There have been discussions
about special rates for metropolitan areas.
Their meal increment plus the hotel seems to be the way that most
per diem situations are being administered in the Government today.
Air. TURNER. But my concern, I think, is what has been referred to
as the maximum amount, the $50, and you suggest S60. The reason
that I was concerned is because I noticed in the GSA testimony that
only 3 percent of the Federal Government travel is in this maximum
area.
Mr. WEBBER. Certainly that is the stratospheric travel of the admin-
istrators and the very top officials who are invited to locations where
they have. to justify this. This kind of travel we are talking about is
the $30 travel. These are the ones which are of concern to us.
When we submit recommendations we try to take into account, we
don't want to make a proposal to increase it for part of the people
without an equal adjustment to the others. The amount that Ave are
sincerely concerned with is getting this $25, current per diem rate for
people who travel under regular Government travel authorization to
a maximum of $40.
Certainly you note in our testimony that we have used the word
"maximum" in each instance. I believe the bill uses the word "maxi-
mum." I think the GSA people were talking in terms of maximum
rather than a uniform per diem rate at the rate specified in the bill.
Mr. TURNER. But they were talking about a $30 a day per diem.
't'hat was their recommendation. Then they said that we can take into
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consideration these higher cost areas. I am wondering, sir, if you
would like to comment on that in respect to the ability to actually
determine all of these higher cost areas which would be different from
the regular maximum.
Is that something that really can be done or are we talking about
a lot of higher cost areas that would be almost difficult, impossible
maybe to determine?
Mr. WEBBER. I would think you would have more difficulty in. ad-
ministering a higher cost area. The only way I could see that the
higher cost area thing would work is if you designated them. You
made the adjustment on the basis of the cost of meals and have part of
the daily per diem to be adjustable, maybe a dollar or two, and then
take the actual hotel bills because the Government does not pay money
in excess of what the people spend.
The way it is now, people are paying out of their pocket for official
travel, $2, $3, $4, $5 or $10 a day, depending upon the kind of
accommodations they are able to obtain ; many times staying in the
kind of hotels that they prefer not to stay in, in order to try to get
within the amounts of money which have been allocated for travel.
As long as they are using hotel bills and meal allowances, the deter-
mination for the actual rate being paid, I would think that there is a
sufficiently high maximum, that this would accommodate to the high-
cost hotel areas and the low-cost hotel areas because it is only reim-
bursement on the basis of actual expenses.
Mr. TURNER. The gentleman who preceded you indicated some con-
cern as to cost-of-living escalator.
Would you say that the escalator suggestion would be more applica-
ble to the per diem rate, than, perhaps it would be to the mileage rate?
Mr. WEBBER. Correct. What we have done, we have endorsed the
principle of having a special review of the mileage reimbursement as
provided in the bill and in addition to that an escalator on the maxi-
mum per diem based on the adjustment to the annuitants, annuity
payments which would come maybe annually or every 2, 3 or 4 years
in terms of a dollar each adjustment.
Senator HUDDLESTOE. Thank you, Mr. Webber.
Mr. John McCart, operations director of the Government Em-
ployes Council, AFL-CIO.
STATEMENT OF JOHN McCART, OPERATIONS DIRECTOR, GOVERN-
MENT EMPLOYES COUNCIL, AFL-CIO
Mr. McCART. Mr. Chairman, in view of the testimony you have re-
ceived up to this point, I see no need for me to proceed to read our
statement. I would just like to offer a couple of footnotes which may
help the subcommittee with its deliberation.
We are a consortium of 30 AFL-CIO unions that represent in
excess of 1 million postal, wage rate, and classified workers in the
Federal service.
We deeply appreciate the chairman's introduction of the bill and
your comments in this hearing.
It seems quite apparent that there is general agreement about the
necessity for revising the present maximum figures for per diem and
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28
mileage. In our view, the basic questions are how much and how to
deal with these questions in the future.
This is something that is difficult to resolve, in the context of it hear-
ing. So our formal statement addresses myself to those points
specifically.
It points up some rather interesting developments that have occurred
since the per diem and the mileage rates were last increased.
We have included data from reputable firms that deal in the ac-
counting field of hotel and motel operations. They show rates in large
cities ranging from $26 a day down to $21 a day, for example.
Perhaps more important to the discussion about what is to be done
in the future is some information coming from the Bureau of Labor
Statistics.
I mention this in relation to the use of cost-of-living data in deter-
mining future per diem and mileage rates.
The Bureau of Labor Statistics indices contain information on gaso-
line and oil, for example and also restaurant meals. The gasoline and
oil figure as of March 1974 showed 157.4 with 1967 as a base.
So we have 57.4 points to begin with. It also showed that in the
3 months ending February 1974, there was an 56.2 point increase in
the cost of gasoline and oil.
It is very easy to become entangled in a mass of figures. The GSA
study, which apparently was based on figures of last fall, showed a
1.4.5 cent figure is justified for mileage.
Our information from the Federal Energy Office is that they author-
ized price increases for regular gasoline from January through April
totaling 7.1 cents a gallon.
In that light, it seems to us that 18 cents which GSA is willing to
accept for mileage is inadequate.
Mr. Chairman, we subscribe to the idea of a mechanism that will
avoid the necessity of having to involve Congress in this kind of a
problem repeatedly, although we feel very strongly that Congress
should maintain a very careful oversight of what. happens in the
future.
For this reason, we subscribe to the idea of a cost of living approach.
Perhaps BLS figures are not totally applicable mileage, but they do
indicate that the information is useful. No doubt BLS would be re-
sponsive to modify its study to make it more useful to the Federal
Government. in establishing per diem and mileage rates.
That concludes our testimony, Mr. Chairman. We again want to
express our appreciation for the interest of the subcommittee and to
strongly commend the chairman's desire to move this legislation
expeditiously.
Thank you.
Senator HUDDLESTON. Thank you, sir.
Do you have any concern about whether the legislative branch or
executive branch is charged with the responsibility of this continu-
ing adjustment?
Mr. MCCART. I have been involved in this kind of work, Mr. Chair-
man, for a good number of years. I have a very healthy skepticism
about the activities of the executive branch with respect to employees.
This is in the nature of my business. On the other hand, if this re-
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sponsibility continues in the legislative branch, the same time-con-
suming procedures in effect for the last 15 years will continue. I refer
to the necessity for Congress to take specific action each time there
needs to be an adjustment under present law.
For that reason, this activity could be carried on by the executive
branch with appropriate constraints in the law and with the continu-
ing oversight by the appropriate committees of the House and the
Senate.
Senator HUDDLESTON. Is the frequency of quarterly adjustments
appropriate, do you think?
Mr. MCCART. I don't believe there is a need for quarterly adjust-
ments, Mr. Chairman. Having said that the problem can be resolved
with the executive branch under certain conditions, I sincerely trust
that in the development of regulations and studies on adjustments in
mileage and per diem rates in the future it is accomplished in coopera-
tion with interested unions.
This has been part of the problem we have had with the Office of
Management and Budget and more recently with the General Serv-
ices Administration. Unions now have collective bargaining arrange-
ments in the Federal service; there are thousands of contracts.
They have an equity in regulations and studies. We surely hope that
the views of the employees are going to be sought so as to avoid the
kind of attitude we have had to express here about our suspicion. of
the executive branch operation in the past.
I don't say that in any sarcastic or critical sense, but it is important
that in the future if the executive branch is going to be given this re-
sponsibility that the employees and the unions be consulted in arriv-
ing at decisions.
Senator HuPDLESTON. Thank you very much. We appreciate your
testimony. Your prepared statement will be incorporated in the record
as if read.
[The prepared statement of Mr. McCart followsJ
PREPARED STATEMENT OF JOHN MCCART, OPERATIONS DIRECTOR, TIIE
GOVERNMENT EMPLOYES COUNCIL, AFL-CIO
Mr. Chairman and members of the subcommittee : The council and
its 30 affiliated AFL-CIO unions join in urging early action on legis-
lation increasing the per diem and mileage allowances currently avail-
able to Federal employees who are required to travel on official busi-
ness. The unions associated with our organization represent more than
1 million classified, wage grade, and postal employees.
We are deeply grateful to the chairman of the subcommittee for in-
troducing S. 3341 and arranging this hearing.
The maximum per diem allowance for normal official travel was
fixed at $25 by Congress in late 1969. There was no adjustment at that
time in the reimbursement for use of employees' automobile for author-
ized work. That rate was established in August 1961, at 12 cents a
mile.
During the intervening years, the cost of hotel accommodations, res-
taurant meals, and automobile maintenance has risen sharply. Infla-
tion has caused these items to escalate inexorably and steeply. The
result is that Federal employees are unable to maintain themselves in
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a reasonable fashion on the present $25 maximum daily allowance or to
operate their vehicles efficiently. Consequently, they are experiencing
financial loss because the allowances have not kept pace with ever in-
creasing costs. For these reasons, it is highly desirable that Congress
provide legislative relief.
Our research demonstrates very clearly that if these employees do
not secure relief, they will continue to suffer financially in many cases,
and will be required to personally defray a larger portion of these
legitimate work expenses with the passage of time.
One of the recognized accounting firms, which deals with hotel
operations, is Laventhol, Krekstein, Horwath, & Horwath. Their re-
port for 1973-the latest available-discloses that room rates in motels
increased by 19 percent between 1970 and 1973. The average daily rate
for rooms in hotels was $19.70.
Using data compiled by that firm and another reputable company
in the same field, Harris, Kerr, Forster & Co., we find these average
room rates in representative cities: *Atlanta, $21.13; Boston, $21.48;
Chicago, $25.77; Los Angeles, $22.04; New Orleans, $26.34; New York
City, $24.25; San Francisco, $22.64; and Washington, D.C., $24.87.
The current per diem allowance covers other items in addition to
lodging and meals. It includes tips, telegrams, telephone calls, laundry
and dry cleaning, certain transportation costs.
Bureau of Labor Statistics maintains information on meals away
from home, gasoline and motor oil, laundry, and dry cleaning costs
as part of its Consumer Price Index functions. The base year-100-
is 1967. These are the increases registered by BLS in -March 1974, for
the elements noted above : Food away from home, 153.7; gasoline and
oil, 157.4; laundry, 137.7; and dry cleaning, 130.7.
From this information, it becomes obvious that a substantial adjust-
ment in per diem allowance is justified. We recommend that the maxi-
mum figure be fixed at $40.
It is interesting to note that in the three month period ending Feb-
ruary 1974, the cost of gasoline and oil jumped 86.2 percent, seasonally
adjusted on an annual basis, according to the Bureau of Labor Statis-
tics review.
Our inquiry to the Federal Energy Office elicited the fact that serv-
ice stations were authorized to increase the price of regular gasoline
by 7.1 cents per gallon from January to April 1974.
In January of this year the General Services Administration com-
pleted a study of the cost of operating privately owned automobiles.
Based on the Consumer Price Index for December 1973, GSA found
that the expense of maintaining a standard size automobile was 14.5
cents a mile. Recalling the increase in gasoline prices-7 cents between
January and April 1974-and the sharp upward trend of automobile
maintenance costs, a maximum allowance of 20 cents per mile is com-
pletely realistic.
In an attempt to cope with the precipitous rise in the cost of operat-
ing private automobiles and other vehicles for official business, S. 3341
proposes a quarterly study by the General Accounting Office of the
expense involved by Federal employees in using these means of trans-
portation. Following submission of the Comptroller General's quar-
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31
terly report to the President, mileage allowances would be adjusted
to conform to GAO findings.
We believe this provision represents a sincere effort to introduce a
mechanism, which will enable Federal workers who are required to use
their vehicles for official business to keep abreast of the climbing prices
of automobile operation. This is true particularly in a period of serious
uncertainty about the availability of petroleum products in the future
and the fluctuations in prices which occur inevitably on the basis of
supply and demand. However, it involves an extra mechanism that
could prove somewhat cumbersome.
As you know, the Department of Labor's Bureau of Labor Statis-
tics has specialized for many years in the accumulation of cost data
and development of indices reflecting changes in various parts of the
economy. The figures cited above indicate that BLS currently collects
data on restaurant meals and automobile costs to construct its Con-
sumer Price Index.
Ample precedent exists for using the Index to evaluate changes in
payments to individuals under statutes affecting Federal workers. In
1965, Congress approved legislation relating increases in annuities for
retired Federal employes and their survivors to changes in the Index.
The following year, legislation was enacted using the same yardstick
in adjusting benefits for those on the permanent rolls under the Fed-
eral Employees' Compensation Act, which covers employees incurring
job-related injuries and diseases.
Therefore, the council recommends that in the future the statutory
per diem allowance be increased by $1 each time the Consumer Price
Index causes a cost of living adjustment in annuities of retired Federal
workers and those on the compensation rolls.
Mr. Chairman, the Government Employes Council believes that
Congress intends to see that Federal employees who find it necessary
to engage in official travel will not be required to bear any share of
justified expenses. We recommend strongly that the subcommittee
proceed promptly to report favorably a bill which will correct the de-
ficiencies in the present situation.
Senator HUDDLESTON. Mr. Wolkomir?
STATEMENT -OF IRVING I. GELLER, GENERAL COUNSEL FOR THE
NATIONAL FEDERATION OF FEDERAL EMPLOYEES
Mr. GELLER. Mr. Wolkomir could not be here. My name is Irving I.
Geller. I am general counsel for the National Federation of Federal
Employees. The NFFE is the largest independent labor organization
in the Federal sector.
We represent approximately 120,000 Federal employees both in this
country and abroad. I appreciate the opportunity of appearing here
today to testify on S. 3341.
S. 3341 would increase current per diem fees from $25 to $35 per day,
and for the first time establish a procedure whereby the mileage fees
paid to employees who must use their own automobile for official busi-
ness is adjusted on a periodic basis.
Section 5704 directs the Comptroller General to conduct a continu-
ous study on the actual cost experienced by an employee when he uses
his own vehicle for governmental purposes.
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The results of this study are compiled on a quarterly basis and sent
to the President or his designee who must then adjust the mileage fees
paid to Federal employees.
Mr. Chairman, we think this procedure is a step in the right direc-
i:ion. However, we suggest that section 5704 be amended to include the
per diem allowance paid to Federal employees. Specifically, we pro-
pose that the Comptroller General also be directed to conduct a study
on the actual cost an employee experiences for living expenses while in
a, Travel status for the Government.
We would think, however, that it would be unnecessary to adjust
this allowance more frequently than once per year.
Mr. Chairman, we applaud the good aims of this bill. However, we
think that the committee should recognize that employees of the Fed-
eral Government are largely organized. There are now pending several
pieces of major legislation which would establish labor relations in the
Federal Government on a statutory basis.
These bills all vary in scope. However, all greatly expand the scope
of bargaining. Employees want and deserve a voice in the matters that
affect them.
We propose, therefore, that in conjunction with pending bills such
as H.R. 10700, that S. 3341 be further amended to provide a mech-
anism whereby the unions are accorded the opportunity of submitting
data to the Comptroller General and holding discussions on a regu-
lar basis and prior to the submission of the study to the President, on
the data that should be included in the report.
The procedure we suggest could be modeled after the prevailing
wage committee which has proved workable. Our suggestions will en-
,ttre that all relevant data is available and at the same time give
employees a voice in matters that are of direct concern to them.
We do not imply that the Comptroller General would do less than
a credible job. We believe, however, that every agency or organiza-
tion can benefit from outside ideas and information. In effect, what
we are saying is we ought to institutionalize the process that is going
on today wherein you have the substantial difference in view and
opinion and facts and conclusions.
Our proposal would accomplish exactly that; an infusion of differ-
ent views and ideas on what data is important and how that data
should be interpreted.
Mr. Chairman, there has been some consideration given to amend-
ing this bill to substitute the Department of Transportation for the
Comptroller General.
We would oppose any such amendment. The Comptroller General
is more experienced and independent than the Department of Trans-
portation and less subject to the vagaries of politics.
Moreover, we are not dealing with a transportation problem per se,
rather it is a matter of cost accounting. That is, what is the actual cost
per mile to an employee who is engaged in official business, for the
use of his own vehicle.
This type of accounting can best be performed by the Comptroller
General.
Mr. Chairman, this concludes our statement. I would be happy to
respond to any questions that the committee may have.
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Senator HTJDDLESTON. I might ask you if your members have any
concern about the question of whether there might be a variance in
mileage allowances based on the type of car they may use?
Mr. GELLER. We think that the creation of a fluctuating amount
would be rather complicated and we would not approve of that kind
of arrangement. We think there ought to be a set fee. There is no
really solid justification for that difference.
I would, if I may, Mr. Chairman, digressing a bit, speak to a point
that hasn't been discussed today and that our concern is largely with
those groups that spend considerable time of their life, their Federal
service, in a travel status.
I am thinking especially of people like tobacco graders, which the
chairman, I am sure, is familiar with. Those people have special
problems. The ordinary amenities, such as having to have their
clothes cleaned, their laundry cleaned; these are not reimbursable
items.
There are other intangibles such as the requirement-not the require-
ment but certainly.: the awareness-that family people are obliged to
call their homes to let their family know where they are. These are
not reimbursable expenditures.
So that our concern is really more with those people who spend a
substantial portion of their time in a travel status rather than those
who are obliged to attend a meeting or a conference.
That is where the problem really lies. We are also concerned that
there be a greater opportunity for uniformity of payment amongst the
agencies.
One of the previous speakers spoke about the advantages of the rate
in the Department of Agriculture over the Internal Revenue Service.
The important thing is that there be a uniform rate established for
all agencies. I think this is a consideration. which the committee ought
to concern itself with.
There was the question raised about the dispute that may frequently
arise concerning the use of the private vehicle and how to meet that
problem. We would urge that the legislation expressly include a pro-
vision wherein the travel order given to an employee should prohibit
him if they want from using a private vehicle.
There should be an expressed statement so that there be nothing left
for dispute or imagination. Of course, we urge that the employee have
the right to operate his own vehicle.
Again, I relate back to the person who is in a frequent travel status.
Parking a Government vehicle in front of it liquor store or elsewhere
may not be the most desirable thing to do.
These people who travel extensively should not be inhibited by their
freedom of action.
Senator HUDDLESTON. I believe that is all of our questions. Thank
you very much.
Mr. TURNER. Mr. Chairman, we have for the record a letter from
the National Customs Service Association to this subcommittee with
respect to S. 3341.
Senator HUDDLESTON. Without objection, it will be added as a part
of the record.
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[The letter referred to follows:]
NATIONAL CUSTOMS SERVICE ASSOCIATION,
Washington, D.C., June 20, 1974.
Hon. LEE METCALF,
Chairman, Subcommittee on Budgeting, Management and Expenditures, Old
Senate Office Building, Washington, D.C.
DEAR MR. CHAIRMAN : As President of the National Customs Service Associ-
ation, a union representing custom employees throughout the United States, I
request that the following statement be included in the record of the hearings
relating to S. 3341, a bill relating to per diem and mileage expenses of employees
of the United States Government.
The NCSA strongly urges adoption of S. 3341. For many years, customs
employees who must often use their own vehicles on official assignments and who
frequently are called away from home on temporary assignments have been
captive donors of the government in the rendering of their employment service.
For far too long, customs employees have been obliged to underwrite a con-
siderable part of their job-related expenses because of the inadequacy of the
present per diem and mileage rates.
NCSA feels that the per diem rate increase from $25 to $35 is fully justified, if
only because of inflation's impact on the cost of food and lodging. This increase,
as noted, is necessary to insure that employees are not in a position of being
underwriters of their job-related expenses. We would suggest that a review pro-
gram, similar to that contemplated for mileage expenses, be conducted frequently
to insure that employees do not find themselves in a similar situation as the one
which presently faces them.
NCSA strongly favors the mileage expense increase to 14.5 cents a mile for the
use of privately owned automobile. If anything, the 14.5 cents figure may be too
low, in light of the recent rise of the price of gasoline and oil products. We are
confident, however, that the S. 3341's provision for review of the rates by the
Controller General will reflect the rapid increases in automotive costs and pre-
vent further inequity.
In summation, NCSA supports S. 3341 as it will serve to make whole employees
who at present are required to underwrite a considerable portion of their job-
related expenses out of their own pocket. I wish to thank the committee and its
staff for taking the time to consider this statement.
JOHN J. MURPHY, President.
Senator HTDDLESTON. I believe that completes our list of witnesses
for today. The subcommittee will be in recess subject to the call of the
Chair.
[Whereupon, at 12 :10 p.m., the subcommittee recessed, to reconvene
subject to the call of the Chair.]
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APPENDIX I
[From the Congressional Record, Apr. 10, 1974]
INTRODUCTORY REMARKS BY SENATOR METCALF
REGARDING S. 3341
Mr. METCALF. Mr. President, I send to the desk for appropriate
reference a bill to amend title V of the United States Code to pro-
vide for an equitable method of computing vehicle mileage costs to be
reimbursed to U.S. Government employees for the use of their private
automobiles while on official duties. The bill would also raise the per
diem allowance from $25 to $35.
Pursuant to regulations issued in May 1973, the mileage allowance
for a privately owned vehicle used on official business was set at 11
cents per mile. A General Services Administration report prepared
in early 1974, entitled "Present Cost of Operating Privately Owned
Automobiles," concluded that :
(1) the approximate cost of operating a standard size automobile is currently
14.4 cents per mile ;
(2) the cost of operating a compact size automobile is approximately 75%
of the cost of operating a standard size automobile ;
(3) the maximum mileage allowance of 12 cents per mile is inadequate when
a standard size automobile is used for official business.
This imbalance was called to my attention by the 60,000-member
National Treasury Employees Union. The legislation I introduce
today is designed to correct the inequality that currently exists for
those individuals who must use their own cars for official business. I
recognize that opponents may say that this increase would tend to in-
crease the number of individuals who will seek to use their private cars
for work, rather than use public transportation. However, the bill pro-
vides that no employee may use a private automobile unless he is spe-
cifically assigned to do so by an appropriate official.
The bill also would increase the per diem allowance from the cur-
rent $25 to $35. The rationale for this needed amendment is quite
clear. The allowance has been limited to $25 since 1969, when it was
increased from $16 to $25. The cost-of-living increases since that 1969
amendment makes the necessity of this increase obvious.
(A copy of S. 3341 follows:)
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93D CONGRESS
2D SESSION
S. 3341
IN THE SENATE OF THE UNITED STATES
Arau, 10, 1971
Mr. METCALr introduced the following bill; which was read twice and referred
to the Committee on Government Operations
A BILL
To revise certain provisions of title 5, United States Code, re-
lating to per diem and mileage expenses of employees and
other individuals traveling on official business, and for other
purposes.
1 Be it enacted by the Senate and house of IRepresenta-
2 tives of the United States of America in Congress assembled,
3 That (a) section 5702 (a) of title 5, United States Code,
4 relating to the per diem allowance of employees traveling
5 on official business within the continental United States, is
6 amended by deleting "$25" and inserting in place thereof
7 "$35".
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22
23
24
2
1 (b) Section 5702 (c) (1) of title 5, United States
2 Code, relating to reimbursement for actual and necessary
3 travel expenses of employees under unusual circumstances in
4 excess of the maximum per diem allowance, is amended by
5 deleting "$40" and inserting in place thereof "$50".
6 (c) Section 5703 (c) (1) of title 5, United States
7 Code, relating to the per diem allowance of individuals
8 serving without pay or at $1 a year for travel inside the con-
9 tinental United States, is amended by deleting "$25" and
10 inserting "$35" in place thereof.
11 (d) Section 5703 (d) (1) of title 5, United States Code,
12 relating to reimbursement for actual and necessary travel
13 expenses of individuals serving without pay or at $1 a year
14 under unusual circumstances in excess of the maximum per
15 diem allowance, is amended by deleting "$40" and insert-
16 ing in place thereof 150".
17 Sno. 2. (a) Section 5704 of title 5, United States
18 Code, relating to mileage and related allowances of em-
19 ployees and other individuals performing services on official
20 business inside or outside the designated post of duty or
place of service, is amended to read as follows:
5704. Mileage and related allowances
" (a) Except to the extent otherwise provided under
this section, and under regulations prescribed under section
5707 of this title, an employee or other individual perform-
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3
1 ing service for the Government, who is engaged on official
2 business inside or outside his designated post of duty or place
3 of service, is entitled to-
4 " (1) 9 cents a mile for the use of a privately owned
5 motorcycle;
6 " (2) 14.5 cents a mile for the use of a privately
7 owned automobile; or
8 " (3) 12 cents a mile for the use of a privately
9 owned airplane.
10 " (b) The Comptroller General of the United States
11 shall conduct a continuous study on the average, actual cost
12 a mile, to an employee or other individual performing service
13 for the Government who is engaged on official business in-
14 side or outside the designated post of duty or place of serv-
15 ice, for the use of a privately owned motorcycle, automobile,
1t; or airplane. Not later than January 15, April 15, July 15,
17 and October 15 of each year, the Comptroller General shall
is submit to the President or his designee the results of the
19 study for the three-month period preceding the month in
20 which the report. is to be submitted, including specific figures,
21 each rounded to the nearest one-tenth of a. cent, of the aver-
22 age, actual cost a mile during that period for the use of a.
23 privately owned motorcycle, automobile, and airplane. The
24 cent figures contained in paragraphs (1) , (2) , and (3) of
25 subsection (a) of this section shall be adjusted, as of the
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4
1 first day of the first month following the date of submission
2 of the report, to the figures so reported by the Comptroller
3 General, and those reported figures shall also be included as
4 of such day in the regulations prescribed under section 5707
5 of this title.
6 " (c) An employee or individual described in subsection
7 (a) of this section shall not use a privately owned motor-
8 cycle, automobile, or airplane under the circumstances de-
9 scribed in subsection (a) of this section unless specifically
authorized in writing to do so in the travel authorization.
The written authorization for the use of a privately owned
motorcycle, automobile, or airplane shall be made only in
the interests of the efficient and effective conduct of official
business of the Government and only if the use of public
transportation by the employee or individual concerned
would be a personal hardship. or against the public interest.
" (d) In addition to the mileage allowance provided in
22 " (2) ferry fares; and
23 " (3) bridge, road, and tunnel tolls.".
24 (b) The amendment made by subsection (a) of this
25 section shall become effective on July 1, 1974.
18 accordance with the other provisions of this section, the
19 employee or other individual performing service for the
20 Government may be reimbursed for-
21 " (1) parking fees;
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APPENDIX II
AGENCY COMMENTS
ADMINISTRATIVE OFFICE OF THE U.S. COURTS,
lion. GALE MCGEE Washington, D.C., June 19, 1974.
,
Chairman, Committee on Post Office and Civil Service, U.S. Senate, Washington,
D.C.
DEAR MR. CHAIRMAN : On June 6th hearings were held before your Committee
on S. 3341, which is the bill to increase the per diem and travel allowances for
official travel. On behalf of the Federal Judiciary I would like to express our
view of the urgent need for this legislation. While we have made no independent
study of what the travel allowances ought to be, we do know that travel reim-
bursement for judges, magistrates, clerks of court and other employees in the
Judicial Branch of the Government is inadequate.
The provisions of the Travel Expense Act of 1949 apply generally to officers
and employees in the Judiciary, including judges, 28 U.S.C. 456. An amendment
to that Act will thus automatically apply to the officers and employees of the
Judiciary. If, however, the Committee contemplates reporting separate legisla-
tion, we would request an opportunity to suggest to the Committee language that
would make any contemplated increases in travel allowances applicable to the
Judiciary.
Sincerely yours,
COMPTROLLER GENERAL OF THE UNITED STATES,
Washington, D.C., June 4, 1974.
Chairman, Committee on Government Operations,
U.S. Senate.
DEAR MR. CHAIRMAN : We refer to your letter of April 17, 1974, wherein you
request our views and recommendations on S. 3341, a bill to revise certain pro-
visions of title 5, United States Code, relating to per diem and mileage reim-
bursement for employees and other individuals traveling on official business and
for other purposes.
Section 1 of the bill would amend section 5702 of title 5, United States Code,
by increasing the maximum per diem allowance for travel inside the continental
United States from $25 to $35 and by increasing the maximum reimbursement
for actual and necessary expenses of employees traveling in the continental
United States from $40 to $50. Section 1 of the bill would also amend subsec-
tions 5703(c) and (d) of title 5, United States Code, which cover reimbursement
of individuals serving without pay or at $1 a year for travel on official business,
by providing increases for such individuals similar to those provided for em-
ployees covered by 5 U.S.C. 5702.
Section 2 of the bill would amend section 5704 of title 5, United States Code,
by increasing the maximum mileage allowances for the use of privately owned
vehicles on official business, effective July 1, 1974. That amendment would pro-
vide that under regulations prescribed under 5 U.S.C. 5707, employees and other
individuals performing service for the Government would be entitled to 9 cents
a mile for use of a privately owned motorcycle, 14.5 cents a mile for the use
of a privately owned automobile, and 12 cents a mile for use of a privately owned
airplane. The current provision authorizes maximum mileage rates of 8 cents
for use of privately owned motorcycles and 12 cents for use of privately owned
automobiles or airplanes.
The amended section 5704 would also require the Comptroller General to con-
Iuct a continuous study on the average actual cost a mile to an employee or other
individual engaged on official business for the use of a privately owned motor-
cycle, automobile, or airplane. No later than January 15, April 15, July 15, and
October 15 of each year, the Comptroller General would be required to submit
to the President or his designee a report of the results of the study for the pre-
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ceding 3 months including specific figures, rounded to the nearest one-tenth of
a cent, of the average, actual cost a mile during that period for the use of a
privately owned motorcycle, automobile, and airplane. As of the first day of the
first month following the submission of each report, the amended section would
require the mileage rates contained in paragraphs (1), (2), and (3) of sub-
section (a) of 5 U.S.C. 5704, as amended by this bill, to be adjusted to the figures
reported by the Comptroller General and require those mileage rates to also be
included as of that day in the regulations prescribed nuder 5 U.S.C. 5707.
Section 2 of the bill woud further amend 5 U.S.C. 5104 to provide that an em-
ployee or individual shall not use a privately owned motorcycle, automobile, or
airplane for official business unless specifically authorized in writing to do so in
the travel authorization. Such written authorization would be made only in
the interest of the efficient and effective conduct of official business of the Govern-
ment and only if the use of public transportation by the employee or individual
concerned would be a personal hardship or against the public interest.
Regarding section 1 of the bill, our information concerning subsistence costs
at our regional office sites and other locations regularly visited by our employees
on Government business indicates that the costs of lodging, meals and other sub-
sistence expenses have increased to the point where the currently prescribed per
diem maximum often does not cover subsistence expenses incurred by prudent
employees traveling on Government business.
The General Services Administration (GSA) study of subsistence, in which
we participated through the furnishing of subsistence cost information, has
revealed that a per diem in excess of the current $25 maximum for travel in the
continental United States is justified. GSA is able to furnish the Committee more
specific information with regard to the actual costs incurred by Government
employees while traveling on official business.
As pointed out above, the experience of our employees in traveling on official
business clearly demonstrates the need to increase the maximum per diem rate if
Government employees traveling on official business are not to be required to
suffer a personal financial loss. In view of the fact the controlling regulation
precribes a sliding per diem rate based upon the traveler's lodging costs the
proposed maximum per diem rate of $35 appears reasonable. Accordingly, we
strongly recommend enactment of legislation to alleviate the present undesirable
situation.
While section 1 of the bill would temporarily relieve the problem, it is our
opinion that permanent legislation is necessary to provide a more viable system.
Accordingly, we recommend that consideration be given to amending the existing
travel expenses legislation to provide a continuing procedure for adjusting the
maximum rates of per diem as well as mileage rates authorized for the expense
of official travel.
Section 2 of the bill does contain a procedure for continuing adjustment of
mileage rates and we endorse the principle of periodically adjusting such rates
without the necessity of legislation. However, we have serious reservation con-
cerning the role the legislation contemplates that the GAO would play. We do
not believe that it would be appropriate for the Comptroller General to have
the responsibility for making mileage surveys and determining mileage rates.
In our opinion the resources of the GAO can best be utilized in the performance
of more significant functions than that of compiling mileage statistics and report-
ing such statistics to the President or his designee. Moreover, the compiling of
mileage statistics upon the basis of which the authorized mileage rates would be
determined is primarily an executive function and the great majority of the em-
ployees who would be affected thereby are those employed in the executive
branch. We strongly recommend, therefore, that this function be vested in the
President for delegation as he deems appropriate and that the GAO have no
more than an oversight responsibility in this area. Should the Congress so desire
the implementation of new mileage rates could be conditioned upon a legislative
veto procedure such as that provided in the salary increase provisions of 5
U.S.C. 5305, although we doubt that this procedure would be essential in view of
the limited impact of increased mileage payments on Government expenditures
as compared with the impact of salary increases.
Further, we note that S. 3341 would substantially change the current; pro-
cedures for paying mileage by fixing specific mileage rates rather than prescrib-
ing maximum limitations on the rates that may be paid and by authorizing pay-
ment of such rates only when travel by privately owned vehicle is authorized
in writing and justified. on the basis of efficient and effective conduct of official
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42
businessand on the basis that use of public transportation would be a personal
hardship to the employee or against public interest. Although we recognize the
concern for the conservation of energy which apparently motivates this approach
the restrictive provision may result in depriving employees of reimbursement
for the use of their vehicles in the interest of the Government.
We will be pleased to work with the Committee and the Committee staff in the
development of legislative language which would authorize the Executive branch
to adjust both per diem and mileage rates when warranted by changing economic
conditions in order that employees and others traveling on Government business
will be adequately reimbursed the costs resulting from such travel.
As a technical matter it is noted that S. 3341 would not increase the maximum
per diem and subsistence reimbursement amount specified in 2 U.S.C. 68b for
travel by Members and employees of the Senate.
Sincerely yours,
ELMER B. STAATS,
Comptroller General of the United States.
STATEMENT OF THE DEPARTMENT OF DEFENSE
The Department of Defense appreciates this opportunity to submit its views
to the Subcommittee in connection with S. 3341, 93d Congress. This bill will in-
crease the maximum per diem and mileage allowances of employees traveling on
official business.
A study was conducted by the Department of Defense Per Diem, Travel and
Transportation Allowance Committee some time ago. This study revealed that
the current maximum per diem rate of $25.00 is no longer adequate to defray the
average expenditure for food, lodging, and allowable miscellaneous expenses by
employees while on official travel at many locations. There was evidence that the
$35.00 maximum proposed by this bill would be inadequate in some cases, par-
ticularly for the large metropolitan areas such as Washington, D.C., New York,
New York, Boston, Massachusetts, San Francisco, California, etc., where a
night's lodging may exceed the proposed $35.00 maximum. The Department of
Defense also recently participated in an extensive study of the adequacy of
Current travel allowances for Federal employees which was conducted by the
General Services Administration. This study confirmed our earlier findings re-
garding the inadequacy of the per diem rates.
The recent substantial increase in the cost of fuel coupled with the greatly
reduced miles per gallon ratio have also rendered the current maximum mileage
allowances totally inadequate and it is clear that some adjustment is in order.
The General Services Administration is the agency responsible for the ad-
ministration of per diem as well as other travel and transportation entitlements
for U.S. Government civilians of all Executive Departments and Agencies. As a
result of their recent study, they have submitted draft legislation to the Congress
which proposes to address these problems in a realistic and flexible manner. We
support this proposal and defer to them for specific comment on the merits of the
GSA proposal.
The current per diem rates have been inadequate for many locations for quite
some time. The same is true for the mileage allowances. Many employees of the
Federal Government who are required to travel in connection with the perform-
ance of their official duties have suffered considerable out-of-pocket expenses over
the past several years. The Department of Defense strongly urges the expeditious
enactment of appropriate legislation which will relieve this inequity.
APPENDIX III
PRESENT COST OF OPERATING PRIVATELY OWNED AUTOMOBILES
BY GENERAL SERVICE ADMINISTRATION, FEDERAL SUPPLY SERVICE,
PASSENGER AND TRANSPORTATION SYSTEMS
I. Objective.-Calculate the current cost of operating privately owned auto-
mobiles in order to determine the adequacy of the present mileage allowance.
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II. Background.-Under 5 U.S.C. 5704(a) (2), an employee is entitled to a
mileage allowance of not more than 12 cents per mile wnen he uses a privately
owned vehicle while on official business. The Office of Management and Budget,
in the Standardized Government Travel Regulations (OMB Circular A-7, Re-
vised) prescribed a rate of 11 cents per mile when the use of a privately owned
vehicle is advantageous to the Government.
Pursuant to Executive Order 11609, dated July 22, 1971, the General Services
Administration published the Federal Travel Regulations (41 CFR 101-7) in
May 1973. Since assuming the responsibility for administering the travel regu-
lations, GSA has received several inquiries questioning the adequacy of the
present mileage allowances. In response, this study was conducted to determine
the cost of operating a privately owned automobile. The study techniques and
results are discussed below :
Two earlier studies of the cost of operating privately owned vehicles were
compiled by GSA, based on the U.S. Department of Transportation (DOT) Report
"Cost of Operating an Automobile," published in April 1972. In April 1974 DOT
published an updated version of their earlier study and since the information
presented in this new report is more current (costs shown are for February 1974)
we felt a corresponding obligation to update our study in order to more ac-
curately reflect the cost of operating a privately owned automobile for official
travel.
III. Diacussion.-It is a fact that the costs, both fixed and variable, are lower
for compact cars than for standard size automobiles. It is the intent of this
study, therefore, to present the per mile costs for both standard and compact
size automobiles.
(a) Standard Size Automobijcs.-The automobile operating costs for 1'974
were taken from the U.S. Department of Transportation (DOT) report "Cost
of Operating an Automobile" (Annex 1), which was published in April 1974.
The costs used in this study were those for a standard size 4-door sedan equipped
with : V-8 engine, automatic transmission, power steering and brakes, air con-
ditioning, tinted glass, radio, clock, whitewall tires and body protective molding.
It is felt that this car and equipment is representative of standard size 4-door
sedans during model year 1974.
Although the DOT study computed the costs of operating a vehicle over a
period of 10 years (100,000 miles), we have assumed, for the purpose of this
study, that a privately owned vehicle is not likely to be used for business pur-
poses beyond the fifth year. Consequently, the costs presented in this study are
the average annual costs for the first five years of operation as shown in Annex 1.
In computing the April 1974 costs shown in Annex 2, the changes in the Con-
sumer Price Index (CPI) from February 1974 to April 1974 for each cost com-
ponent (tires, gasoline, etc.) were first converted to percentages. These ;per-
centages were then applied to the individual cost components presented in the
DOT study in order to convert the February 1974 cost per mile to a cost per mile
for April 1974. This method of computation was applied to each cost element
except depreciation. The methodology used in developing depreciation costs will
be explained below.
It should be emphasized that the DOT study was conducted in suburban
Baltimore, and, therefore, reflects the prices, taxes, and road and driving con-
ditions of suburban Baltimore. City driving would be more costly while driving
costs in rural Maryland should be lower. In addition to the urban and rural cost
differences, there are also geographic variations in the cost of living. For ex-
ample, the residents of Baltimore experience a cost level which is different
from that in Chicago, Los Angeles or Atlanta. The March 1974 CPI indicates that
the cost of operating an automobile in Baltimore was at an index level of 130.1.
However, since the average U.S. city index level of 130.4 is only 0.2% higher than
the Baltimore level, it appears that the cost of operating an automobile in Balti-
more is representative of the national urban area average costs.
In order to develop and project the over-all cost of operating a standard size
automobile, the following individual cost elements were evaluated :
1. Depreciation.-The cost per mile for depreciation Is influenced primarily by
the purchase price (and price changes) and the number of miles the automobile
is driven each year. The February 1974 costs were based on a standard size,
1974, 4-door sedan as described above (finance charges were not included). It was
assumed by DOT that this car would be driven a decreasing number of miles
from 14,500 in the first to 9,900 in the fifth year. n this respect, it should be noted
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that extensive use of a private automobile for official travel could easily increase
the annual mileage, which would, in turn, lower the cost per mile for all costs, in-
cluding depreciation.
In estimating the depreciation costs for the period February to April 1974, it
was determined that the application of CPI changes (for new automobiles) to
DOT depreciation costs would not provide acceptable cost data. The CPI, insofar
as new automobiles are concerned, is adjusted to eliminate the effect of price
increases attributed to "quality improvements" such as hydraulic safety bumpers,
power brakes and steering, structural improvements, etc. Since in many instances,
these quality improvements become standard equipment or are required by law,
a consumer must bear the additional cost of these items.
Consequently, while the CPI is adjusted downward to compensate for these
improvements, the consumer actually pays more and more each year for his auto-
mobile. It was felt that a more accurate estimate of future depreciation costs
could be obtained by applying the average CPI change for all goods and services
(5.08%a) to the February 1974 depreciation cost per mile. Although the use of
the general index introduces some distortions, it is considered to be a better
representation of automobile price trends than an index which has been quality
adjusted.
2. Maintenance and Repair.-This cost element includes routine maintenance,
such as lubrications and flushing the cooling system ; replacement of minor parts,
such as spark plugs, fan belts, and radiator hoses, minor repairs, such as brake
jobs, water pump, carburetor overhaul, and universal joints ; and some major
repairs. Repairs for collision damage were excluded, but the purchase of minor
accessories such as floor mats and miscellaneous items totaling $2.20 per year
was assumed. The CPI for these goods and services includes few, if any, quality
adjustments.
3. Tires.-Because the cost of the original five tires is included in the vehicle
depreciation cost, this cost category includes only replacement tires. It was
assumed that seven new regular tires and four new snow tires would be pur-
chased during the 10 year, 100,000 mile life of the automobile. Radial tires were
not introduced into this study, and although a car fitted with such tires would
require fewer tire changes, the higher cost of radial tires would at least partly
offset the effects of greater tire mileage.
4. Gasoline.-Although gasoline costs represented only 21.7% of the total
automobile operation cost per mile in 1971, it has become perhaps the most con-
troversial of all the costs due, primarily, to recent shortages and attendant rising
prices. It was determined in the DOT study that a standard car would average
12.92 miles per gallon of gasoline. Obviously, several factors, including the driv-
ing environment, engine size, speed, and pollution devices, influence the mileage
which in turn influences the gasoline cost per mile. A price of 52.1 cents per
gallon, including taxes, was used by DOT.
5. Motor Oil.-In the DOT study, oil consumption was associated with gaso-
line consumption at a rate of one gallon of oil for every 159 gallons of gasoline.
A price of $1.00 per quart was used in the DOT study.
6. Insurance.-Insurance coverage, as applied to this study, includes $50,000
combined public liability ($15,000/$30,000 bodily injury, and $5,000 property
damage), $2,500 personal injury protection, uninsured motorist coverage, and
full comprehensive coverage. Deductible collision was assumed for the first five
years ($100).
7. Tames.-It is difficult to estimate the behavior of taxes from an analysis of
the CPI because the prices of all commodities and services include taxes. As a
result, taxes have been held constantat the February 1974 level of 1.03 cents per
mile, assuming that any increase or decrease would be reflected in the CPI sta-
tistics for the other cost elements.
8. Registration.-Included in this item is a $30.00 annual registration fee and a
one time titling fee of $170.04 cents.
The overall effect of the price changes for the cost elements described above
was an increase in the total cost of operating a privately owned automobile. In
February 1974-the U.S. Department of Transportation determined that the cost
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45
of operating a standard size automobile (less garage, parking, and toll costs) was
13.99 cents per mile. Based on the April 1974 CPI, the cost of operating a private
automobile is currently estimated at 14.4 cents per mile (Annex 2).
(b) Compact Size Automobiles.-These automobile operating costs were also
taken from the DOT study "Cost of Operating an Automobile," April 1974 and
are found in Annex 3. The vehicle selected to represent this category is a 1974
model 2-door sedan equipped with : 6 cylinder engine, automatic transmission,
power steering, radio, vinyl top, wheel covers and protective molding. With two
exceptions, the cost elements and assumptions applied to the standard size ve-
hicle were also used in determining the cost of operating a compact car. These
exceptions were that a gasoline consumption rate of 15.97 miles per gallon and
an oil consumption rate of one gallon of oil for every 150 gallons of gasoline
were applied to the compact car.
The average cost per mile for the first five years of operation was 10.36 cents,
which is approximately 74% of the cost of operating a standard size car.
Because of the stubstantial economies which secure through the use of smaller
automobiles, it is felt that a separate and lower rate of reimbursement should
be paid to an employee who utilizes a compact or subcompact size vehicle while
on official business. In this respect, a rate equal to 75% of the "standard rate"'
(rounded to the next highest cent) appears reasonable and compensatory.
IV. Conclusions.-Several important conclusions can be drawn from the above
discussion.
(a) The approximate cost of operating a standard size automobile is currently
14.4 cents per mile.
(b) The cost of operating a compact size automobile is approximately 75% of
the cost of operating a standard size automobile.
(c) The maximum mileage allowance of 12 cents per mile, provided under
5 U.S.C. 5704(a) (2) is inadequate when a standard size automobile is used for
official business.
V. Recommendations.-
(a) Legislation should be sought to increase the maximum mileage allowances
for use of privately owned automobiles on official business.
(b) The Federal Travel Regulations should be amended to provide for sepa-
rate rates of reimbursement for compact (including subcompact) and standard
size automobiles, if the stautory maximum mileage rate is increased.
ANNEX I.
ANNUAL AUTOMOBILE OPERATION COSTS
Costs
1st yr.
2d yr.
3d yr.
4th yr.
5th yr.
Total
Cost per
mile r
(cents)
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Depreciation -------------------------- $1,
046.00
$647.00
$550.00
$404.03
$294.00
$2,941.00
4.99
Maintenance/repair--------------------
126.49
161.40
336.67
445.47
329.86
1,399.89
2.38
Tires--------------------------------
18.68
16,71
28.99
42.09
42.80
149.27
.25
Gasoline-----------------------------
438.70
393.35
347.99
302.63
299.51
1,782.18
23,03
Motoroil -----------------------------
20.00
19.00
20.00
19.00
21.00
99.00
.17
Insurance----------------------------
205.00
192.00
192.00
177.00
177.00
943.00
1.60
Taxes-------------------------------
147.61
132.37
118.26
104.17
103.24
605.65
1.03
Registration__________________________
200.04
30.00
30.00
30.00
30.00
320.04
.54
1, 623.91
1, 524.36
1, 297.41
8, 240.03
13.99
I Col. 7 divided by 58,900 miles.
2 Gasoline represents 21.7 percent of the total cost.
Source: Cost table annex I p. 2.
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Approved For Release 2001/09/07 : CIA-RDP76M00527R000700030005-6
 Approved For Release 2001/09/07 : ( J4-RDP76M00527R000700030005-6
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Dallas----------------------------- $19 to $27--_----------- $19 to $27-------------- $22 to $32.
St. Louis--------------------------- $25 to $32 -------------- $20 to $24 -------------- $22 to $24.
Boston----------------------------- $28 to $32 -------------- $24 to $32-------------- $23 to $33.
Chicago---------------------------- $31 to $39-------------- $26 to $53-------------- $29 to $34.
Fort Wayne------------------------- $19 to $27-------------- $17 to $21 -------------- $16 to $21.
Louisville---------------------- $17.50 to $18.50--. ------------------------------ $12.50 to $15.50.
Los Angeles-------------------- --- ----------------- $24 to $35------------ $28 to $30.
Seattle ---------------------------------------------------- $21 to $26-------------- $20 to $22.
Approved For Release 2001/09/07 : CIA-RDP76M00527R000700030005-6
 Approved For Release 2001/09/074 CIA-RDP76M00527R000700030005-6
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Approved For Release 2001/09/07 : CIA-RDP76M00527R000700030005-6
 Approved For Release 2001/09/07 : %r-RDP76M00527R000700030005-6
COST IMPACT STATEMENT AND AGENCY COMMENTS ON PROPOSED
INCREASES IN PRIVATELY-OWNED VEHICLE AND AIRCRAFT
MILEAGE ALLOWANCES
In January 1974 studies were completed which concluded that the present
statutory mileage allowances for use of privately owned aircraft (POA) and
vehicles (POV) on official business were inadequate.
The study entitled "Present Cost of Operating Privately Owned Automobiles"
concluded that the cost of operating a privately owned automobile was 14.4
cents per mile in December 1973. It was recommended that legislation should
be sought to increase the maximum mileage allowance for use of a privately
owned automobile from the present maximum of 12 cents a mile to 18 cents per
mile. It was also recommended that the Federal Travel Regulations be amended
to increase the mileage allowance from 11 cents to the statutory maximum of
12 cents per mile. The second recommendation was accomplished effective Febru-
ary 8, 1974.
With regard to the allowances for use of privately owned aircraft, our study
entitled "Study of Operating Costs for Privately Owned Aircraft" established
that the cost of operating a private aircraft was approximately 20.6 cents per
mile in December 1973. Accordingly, we recommend legislative action to increase
the mileage rate for privately owned aircraft from the present statutory maxi-
mum of 12 cents to 24 cents per mile. We also recommended that employees
be separately reimbursed for landing, parking, and tiedown costs, in addition to
the mileage allowance, when a privately owned aircraft is used on official business.
In order to assess the cost impact of the recommendations, a letter dated
October 12, 1973, was forwarded to nine executive agencies outlining our
proposals. The letter asked that each agency submit the. number of POV miles
traveled during FY73, which were payable at the 11-cent rate (now 12 cents), and
the number of POA miles traveled during FY73. These agencies were also asked
to comment on our proposals ; their comments have been summarized in
Annex 3.
The mileage information furnished by these agencies is summarized in Annex
1. They have collectively estimated approximately 231 million miles of POV
travel at the 12-cent rate, and 1 million miles of POA travel. Although the Defense
Department could not furnish the requested data, they indicated that POA travel
would be minimal.
Based on a previous travel survey, in which all agencies participated, we
estimate that the eight agencies shown in Annex 1 account for approximately
55.5 percent of the total Government travel. If the POV mileage for 55.5 percent
of the agency travel is 231 million miles, then all agencies (including DOD)
should generate approximately 416 million miles of POV travel, computed as
follows : 231 million miles over 55.5 percent of travel equals x miles over 100
percent of travel or v equals 231(100) over 55.5 percent equaling 416 million
miles.
Each 1-cent increase in the mileage allowance could then increase total annual
POV travel costs by $4.16 million. However, it is felt that the actual impact will
be less, as most of the agencies selected to participate in the mileage survey
are relatively large users of POV transportation. Accordingly, we feel that the
cost impact of a 1-cent increase in the mileage allowance would range from $3.5
to $4 million ; specifically, we feel that $3.8 million would be a reasonable esti-
mate of the additional costs. Annex 2 shows the cost impact of each 1-cent change
from 11 to 18 cents.
The additional costs associated with an increase in the mileage allowance for
privately owned aircraft are based on the mileage data reported by the eight
agencies shown in Annex 1. Since these agencies account for nearly all of the
POA mileage, no further adjustments were made to reflect the impact of the
agencies which were not surveyed. The total distance traveled by POA in 1 year
approximates 1.1 million miles. Accordingly, a 1-cent increase in the POA mile-
age allowance would increase costs by $11,000. Annex 2 shows the cost impact
of changes in the mileage allowances from 12 to 24 cents.
The data shown in Annex 2 indicates that an increase in the statutory POV
mileage rate from 12 to 18 cents could cost an additional $22.8 million, and an
increase in the statutory POA mileage rate of 24 cents could raise costs by
$132,000. However, these limits are maximums and would only be allowed if justi-
fied in future cost studies.
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 Approved For Release 2001/09/07 : CIA-RDP76M00527R000700030005-6
76
If legislation is passed to increase the POV allowance to 18 cents, the travel
regulations will prescribe a rate of 14 cents (based on current costs) for stand-
ard size automobiles, and a rate 25 percent lower for compact and subcompact
cars. The total cost impact of a rate increase from 12 to 14 cents will approxi-
mate $7.6 million. This estimate, however, does not include the savings which
will accrue from the lower compact rate, which, at present, are impossible to
estimate.
If the statutory POA mileage allowance is increased from 12 to 24 cents, the
travel regulations will prescribe a rate of 20 cents (based on current costs). The
total additional cost of this action will approximate $88,000. There will be some
added costs as a result of the proposal to separately allow landing, parking, and
tiedown fees, however, these should be minimal in comparison with the mileage
rate increase.
In summary, while the maximum cost impact of our legislative proposals could
be $22.9 million ($22.8 million for POV travel and $.1 million for POA travel),
a more reasonable estimate of the actual impact would be $7.7 million ($7.6
million for POV travel and $.1 million for POA travel).
Privately
owned
vehicle'
Aircraft
Interior------------------------------------------------------------- -----------
9,347,070
145,400
HUD---------------------------------------------------------------------------
42,186,398
--------
Labor--------------------------------------------------------------------------
2,600,000
52,000
Agriculture--------------------------------------------------------------------
15,000,000
20,000
Transportation ------------------------------------------------------------------
. 6,500,000
750,000
Commerce ---------------------------------------------------------------------
22,911,000
31,582
HEW--------------------------------------------------------------------------
42,414,100
45,884
Treasury----------------------------------------------------------------------
89,770,221
8,500
Total--------------------------------------------------------------------
230,728,789
1,053,366
Total cost
(millions)
Cumulative
cost increase
(millions)
12 cents per mile---------------------------------------------------------------
$45.6
(r)
13 cents per mile---------------------------------------------------------------
49.4
$3.8
14 cents per mile --------------------------------------------------------------
53.2
7.6
15 cents per mile ---------------------------------------------------------------
57.0
11.4
16 cents per mile---------------------------------------------------------------
60.8
15.2
17 cents per mile---------------------------------------------------------------
64.6
19.0
18 cents per mile---------------------------------------------------------------
68.4
22.8
Mileage rate
Total cost
Cumulative
cost increase
(millions)
12 cents per mile----------------------------------------------------------------
$132,000
(r)
19 cents per mile----------------------------------------------------------------
209,000
$77,000
20 cents per mile---------------------------------------------------------------
220,000
88,000
21 cents per mile ----------------------_-----------_---------------------------
231,000
99,000
22 cents per mile ----------------------- ------------------------------------ --.-
242,000
110,000
23 cents per mile ----------------------------------------------------------------
253,000
121,000
24 cents per mile----------------------------------------------------------------
264,000
132,000
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 Approved For Release 2001/09/07 : C$4-RDP76M00527R000700030005-6
AGENCY COMMENTS ON GSA PROPOSAL TO INCREASE POV/POA MILEAGE ALLOWANCES
Department of the Interior. They feel that the proposed rate increases are
needed to fairly and equitably reimburse employees. They also felt that if a lower
rate is established for compact cars, GSA should define "Compact Automobile".
Department of Housing and Urban Development. They believe that the pro-
posed rate increases are justified.
Department of Labor. They support the proposed rate increases as well as sep-
arate reimbursement for airport fees in connection with the use of POA travel.
Department of Defense. They support the proposed rate increases and feel that
GSA should recommend to Congress that the statutory maximum allowances be
removed.
Department of Agriculture. They concur with our proposals but feel that the
9-cent rate for the use of a POV when a Government-owned vehicle would be
advantageous should also be raised. They feel that if the 9-cent rate is not in-
creased, more travelers will request Government-owned vehicles and if vehicles
cannot be provided, reimbursement would be at the maximum rate rather than
at the 9-cent rate.
Department of Transportation. They commented that they share our interest in
assuring that equitable mileage allowances are established and our concern for
the cost impact of increases in the mileage rates.
Department of Commerce. They support the proposed rate increases.
Department of Health, Education, and Welfare. They concurred with our pro-
posals to increase the maximum statutory mileage allowances for use of POV
and POA.
The Department of the Treasury. They concurred with our proposals to in-
crease the mileage allowances.
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