PRESIDENT'S PLAN TO CREATE FEDERAL EXECUTIVE OFFICE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP74B00415R000600070040-1
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 18
• Document Creation Date: December 16, 2016
• Document Release Date: December 6, 2004
• Sequence Number: 40
• Publication Date: February 8, 1971
• Content Type: OPEN

Approved For Release 2004/12/15 : CIA-RDP74B00415R000600070040-1
February 8, 1971 CONGRESSIONAL RECORD -HOUSE H 521
"INSTANT SLUMS"
New housing built under the program in
Elmswood, 'o., and Everett, Wash., became
"instant sl " because the construction
was so poor. Some of the homes began fall-
ing apart almost immediately.
In many areas; poor people who paid slum
speculators premium prices for their homes
had to desert then, because they were un-
inhabitable.
In numerous case's investigators found
"faulty plumbing, leaky basements, cracked
plaster, faulty or inadekuate wiring, rotten
wood, lack of insulatior~, faulty heating
units" and other defects n property that
had been approved by PHAN. for sale to the
poor.
REVERSAL BY itOMN Y
Touched to the quick, the 'administra-
tion's Secretary of Housing and Urban De-
velopment, George Romney, at a Tess con-
c
rat
s-
s lea of hea
l r
1
"?"
p
accurate, misleading and very incomplete Y
.. novated" houses to moderate and low-income
H
nded
h
h
ope aVion d`
e 1Cs suspe
e
conceded the abuses are "more prevalent anl~
ownership-subsidy program pending investi-
widespread than previously evident." He or-
dered a suspension of the program, as ap- ; gction and reform.
S There is an o
portunit
as a result for a
e
p
y
oleaned up and .adequate safeguards are in-
stituted.
Also, he said the. new housing segment of
the program is being checked "to determine
what improvements may be necessary." Fur-
ther, he promised action to root out fraudu-
lent practices and to assist home buyers who
were victimized. He blamed the situation in
part on failure, of Congress to provide ade-
quate funds for an inspection staff.
Patman, who had earlier blasted Romney's
attitude, hailed the HUD chief's newest move
as doing "much to restore confidence" in
housing programs administered by the
agency. Patman urged speedy action to cor-
rect the deficiencies so that the suspension
can be kept short.
A STRONG SMELL OF SCANDAL
When Rep. Wright Patman's House Bank-
ing Committee charged recently that a fed-
eral program to aid low and moderate-income
families to purchase used homes had been
badly abused by profiteers, Housing Secretary
George Romney shrugged it off.
Mr. Romney said the report of the com-
mittee was "misleading, irresponsible and
incomplete" and dismissed the suggestion
of the committee that a national scandal
might be in the making.
On Thursday of last week, Mr. Romney,
after a hurriedly-called conference of the
department's field personnel, held a press
conference and announced the housing aid
program was suspended.
"It is apparent that abuses in the program
are more prevalent and widespread than had
the used-housing portion of the aid progr m.
Mr. Romney's actions have raised ore
questions than they have provided veers,
but hopefully the Secretary doesn't "intend
to let the matter rest there. If there had
been fraud against the government of the
United States and its citizens, Mr. Romney
should leave no stone unturned to bring the
guilty ones to just and to force redress for
victimized home buyers.
CAT OUT OF THE BAG MUCH Too SOON
Housing Secretary Romney has admitted
his agency found some "shocking" cases of
shoddy building having been foisted on his
department by contractors engaged in federal
"low cost" housing for the poor.
At the same time Mr. Romney flayed Rep.
Patman, of Texas, for having made the scan-
dal public before Mr. Romney's office had an not helping a poor family by saddling it with
"opportunity to investigate the abuses." a burden like that.
And, one suspects, also had a chance to FHA 235 is another example of govern-
sweep the whole mess out of sight under men do-good efforts which have been boons
the carpet. to those individuals in our society who are
willing to enrich th selves on the misfor-
THE HOUSING PROFITEERS tunes Of others. We are is another example.
Confronted publicly the other day with a
Congressional report charging "sheer fraud"
by real estate speculators in a key housing
subsidy program, Secretary of Housing and
Urban Development Romney raised the roof.
Regrettably, he did not look very carefully
underneath it.
Instead, the Secretary angrily assailed the
staff of the House Banking and Currency
Committee for producing an "inaccurate,
misleading and very incomplete" report and
went on to protest that he was "shocked" by
the conduct of Chairman Patman (D-Tex.).
Now Romney has conceded that the in-
stan
es of wholesale profiteering by realty
instead f the split-level feud of r cent days
would be,a real home improveme)(.
GOV MENT-SPONSORED INDLE
The IRA 5 program, by which the fed-
mittee. "It lends
said.
themseiv, s. They had to have hel
irresponsibly in releasing the study of FHA
shenanigans is shocking. There is nothing
healthier for FHA 235 and Mr. Romney's
bureaucracy than publicity about shortcom-
ings like permitting a building which cost
$1,800 to be resold to a poor family for
$20,000. Mr. Romney damages his credibility
and usefulness as an official when he rants
..about the irresponsibility of informing the
public about-that.
FHA 235 may have justification, although
it is difficult to understand why the taxpay-
ers should pay to help poor families buy
-homes when the same taxpayers are being
forced to give up their own homes because
of taxes. If poor people are to be helped to
acquire homes, the federal government-to
be specific, Mr. Romney's department-ought
to see to it that they are not suckered into
buying homes in municipalities where real
estate values are falling and real. estate taxes
are rising out of sight. The government is
story of the Gurley
.ich was "helped" by
It has made sluml ding an extremely profit-
able enterprise.
QUESTION`iBLE INSURANCE POLICY
TO PR TECT CORPORATE OFFI-
CERS AND DIRECTORS AGAINST
WR(?/GDOING
(M PATMAN asked and was given
permission to extend his remarks at this
point in the RECORD and to include
ex aneous matter.)
i r. PATMAN. Mr. Speaker, last
onth, the Associated Press revealed that
he Penn Central Transportation Co. had
purchased a $10 million insurance policy
to protect the officers and directors of
that company from charges of wrong-
doing.
Such insurance, in my opinion, is
against the public interest. The board of
directors have a fiduciary responsibility
to represent the stockholders honestly
and fairly, and now it appears that the
company paid' for an insurance policy
which effectively relieved the directors of
their sworn duties.
After learning of this $10 million pol-
icy for the Penn Central officers and di-
rectors, I asked the Chairman of the In-
terstate Commerce Commission, Mr.
George Stafford, to investigate the mat-
ter. He has sent me an initial reply stat-
ing that Penn Central violated ICC rules
in listing the insurance premiums as a
business expense.
Mr. Speaker, I place in the RECORD a
copy of the exchange of correspondence
with Mr. Stafford:'
CONGRESS OF THE UNITED STATES,
HOUSE OF REPRESENTATIVES,
Washington, D.C., January 25, 1971.
Hon. GEORGE M. STAFFORD,
Chairman, Interstate Commerce Commission,
Washington, D.C.
DEAR MR. STAFFORD: You have undoubtedly
read the news stories in today's newspapers
concerning the purchase of a $10 million
Lloyd's of London policy to protect the di-
rector's-and officers of Penn Central from
charges of wrongdoing. I strongly question
the propriety of Penn Central paying out
huge premiums on this insurance which was
apparently designed to set up a wall of pro-
tection for the officers and directors against
their stockholders and the public.
I urge that the Interstate Commerce Com-
mission move immediately to inevstigate the
circumstances behind this insurance and to
etermine Its legality. It is also important
at ICC discover who actually paid .the pre-
In urns and whether It was charged off as a
bu ness expense or listed in some other
fas on on the company's books.
In y opinion the existence of such an in-
suran a policy would greatly reduce the in-
centiv for the officers and directors to per-
form th it duties in the public interest and in
the ante sts of the stockholders. I would be
most int ted to learn whether ICC has any
policy . tion on insuring officers and di-
rectors ag t charges of wrongdoing.
If you do of feel that existing legislation is
sufficient to ntrol this problem, I hope that
you will forw d without delay your sugges-
tions for legislative remedies. I am sure that
the Congress would look favorably on any-
thing which would prevent such activity in
the future.
Approved For Release 2004/12/15 : CIA-RDP74B00415R000600070040-1
 Approved For Release 2004/12/15 : CIA-RDP74B00415R000600070040-1
CONGRESSIONAL RECORD- HOUSE Feb, uary 8, 1971
I hope I can have a full report from you on
the Issues raised- by this Lloyd's of London
policy.
.3incerely,
WRIGHT PATMAN.
fivers' and directors' insurance may be
proper is where the officer or director has
been vindicated by a court or is guilty
only of an honest business error not in-
volving a violation of a statute.
As stated by the. New York Supreme
Court 30 years ago:
Liability to suits is considered a risk at-
tendant on directorships, to be assumed, to-
gether with the more compensatory features
of that office.
Mr. Speaker, I place in the RECORD a
copy of my letter to Governor Hearnes:
FEBRUARY 8, 1971.
Hon. WARREN E. HEARNEs,
Chairman, National Governors' Conference,
Washington, D.C.
DEAR GOVERNOR HEARNES: I am writing to
alert you and your fellow. governors to a
problem which has arisen under many state
corporation laws.
As you know, the Model Business Corpora-
tion Act is sponsored by the Committee on
Corporate Laws, Section of Corporation,
Banking and Business Law of the American
Bar Association. The Act has been adopted
in whole or in part in many states. My alert
to you is with respect to only one provision,
Section 5(g) of the 1969 revision, which I
believe undermines essential safeguards of
federal and state law by authorizing a cor-
poration of furnish its directors and officers
with insurance against their own wrongful
conduct.
The Committee on Banking and Currency
learned of this problem through disclosure
that the directors and offices s of the Penn
Central Transportation Company caused the
corporation to purchase a 040 million policy
from Lloyd's of London indemnifying them
personally against charges of wrongdoing.
Such insurance is authorized by Section
5(g), which apparently has been adopted in
Delaware, Nevada, Oregon, Washington,
Alabama, Georgia, Iowa, Pennsylvania, New
Jersey, Utah and Louisiana and proposed
in many other states. The section provides:
A corporation Shall have power to pur-
chase and maintain insurance on behalf of
any person who is or was a director, officer,
employee or agent of the corporation, or is
or was serving at the request of the corpora-
tion as a director, officer, employee or agent
of another corporation, partnership, joint
venture, trust or other enterprise against
any liability asserted against him and in-
curred by him in any such capacity, or aris-
ing out of his status as such, whether or not
the corporation would have the power to
indemnify him against such liability under
the provisions of this section. (Emphasis
added.)
Thus, Section 5(g) permlJs the purchase
by a corporation, out of funds belonging to
stockholders, of insurance against all types
of wrongdoing by the directors and officers.
Included might be fines, penalties, judge-
ments, settlements, court costs and expenses
in defense of both civil and criminal actions
against the directors and officers for viola-
tion of their duty to the stockholders and
the public. Some of the federal statutes
which would be undermined by such in-
surance are the Securities Act of 1933, the
Securities Exchange Act of 1934, the Sher-
man Act, the Internal Revenue Code and
various federal safety statutes imposing civil
liabilities on responsible corporate oficiala.
I believe that the policy underlying com-
parable state statutes would also be ins-
paired. In addition, state laws limiting
direct indemnification by the corporation to
its Officers and directors to situations where
the defendant has acted reasonably and in
good faith, or where he has prevailed in
litigation would be completely cineum-
vented. Such safeguards are, in fact found
in other subsections of Section 5 of the
Model Business Corporation Act itself.
I am calling this matter to your attention
so that in the event the above provision of
the Model Business Corporation Act is in
force or proposed in your state, you will oe
able to evaluate its propriety from a public
policy point of view.
I am sending a copy of this letter to the
Chairman of the Committee on Corporate
Laws, Section of Corporation, Banking and
Business Law of the American Bar Associa-
tion.
With kindest regards and best wishes, I
INTERSTATE COMMERCE COMMISSION,
Washington, D.C., February 1, 1971.
Hon. WVaiaHT PATMAN,
Chairman, Commitee on Banking and Cyr-
rency, House of Representatives, Wash-
ington, D.C.
DEAR CHAIRMAN PATMAN: This is in reply
to your letter of January, 25, 1971, wherein
you requested information with respect to
insurance purchased by Penn Central to pro-
tect their officers and directors from charges
of wrongdoing.
Duri.ag the course of the current investi-
gation of Penn Central, our staff has devel-
oped information concerning the policies
referred to in your letter. We will be pleased
to make our file available to a member of
your staff at your convenience.
The premium was paid from Penn Central
Transportation Company's funds and
charged off as a business expense. This is in
violation of our accounting rules. Although
we do not have a regulation forbidding car-
riers from purchasing this type of insurance,
it is our policy to require premium payments
to be charged off as ,a nonoperating expense
not chargeable to the consumer. Insofar as
the legality of the insurance, is concerned,
the State of Pennsylvania recently passed
legislation permitting companies incorpo-
rated to the state to pay the full premiums
on directors' and officers' insurance.
Insurance of this kind is not uncommon
in the ;ransportation industry and generally
protects officers and directors for wrongful
acts neglect, or breach of duty. Wrongful
acts entered into for personal gain or result-
ing from dishonesty are not covered. This
matter will be carefully evaluated during the
course of the present investigation of Penn
Central. A y recommended legislative rem-
edies will be promptly submitted to the
Congress.
Sincerely yours,
GEORGE M. STAFFORD
Chair,man.
Mr. Speaker, apparently a number of
States are considering an amendment to
the Model Business Corporation Act
which would permit corporations to buy
insuralce to protect their officers and
directors against all types of criminal
and and civil wrongdoing. I have writ-
ten Missouri Governor Warren Hearnes,
Chairman of the National Governor's
Conference, to let him know that there
is a movement to push this law through
various legislatures.
This new provision of the corporation
law, in my opinion, is contrary to public
policy and contrary to the best interests
of stockholders and consumers. When
Congress provided in Federal law for fines
and liability for unlawful conduct, it did
not intend that Corporate officers and
directors should defeat these laws
through insurance. The fact that the in-
surance may be paid for by the corpora-
tion and thus its stockholders and rate-
payers; compounds the evil. The pro-
posed amendment, which has been urged
by a group of corporate lawyers whose
primary concern is protecting the officers
and directors of large corporations,
would sweep away at least 30 years of
court recisions and State legislation pro-
hibiting unlimited indemnification of
corporate officers and directors against
wrongdoing.
The only situations in which such of-
am
Sincereli&vonrs
A9M.-PATMAN.
PRESIDENT'S PLAN TO CREATE
FEDERAL EXECUTIVE OFFICE
(Mr. DULSKI asked and was given
permission to extend his remarks at this
point in the RECORD and to include
extraneous matter.)
Mr. DULSKI. Mr. Speaker, on Febru-
ary 2, President Nixon rent a special mes-
sage to the Congress in which he recom-
mended the enactment of legislation to
establish a new Federal executive service
in the executive branch.
On the same day, the specific legisla-
tive proposal was transmitted by letter
from Chairman Robert E. Hampton of
the Civil Service Commission to the
Speaker of the House.
Accompanying the proposal were
rather extensive documents explaining
the proposal and including a section
analysis of the bill. The proposal was
referred to my Committee on Post Office
and Civil Service.
Today, the ranking minority member
of our committee, Mr. CORBETT, and my-
self are joining in introducing the Presi-
dent's recommended bill.
BILL IS INTa,>DUCED
We have taken 'the initiative in intro-
ducing this bill as a matter of courtesy to
the President to see that his recom-
mendation is properly entered into the
legislative process.
I have not had the proper opportunity
to become as familiar as I would like with
this extensive proposal. However, it is
obvious that it represents a radical new
concept in executive personnel 'manage-
ment and quite likely will prove to be
controversial in many aspects.
Nevertheless, I am confident that my
committee will give the. proposal careful
consideration, and if the need can be es-
tablished for what the President de-
scribes as "landmark" legislation, my
committee will be up to the challenge.
We, are certainly no strangers in this
field as witness our "lai:.dmark postal re-
form legislation" and our "landmark
Federal pay comparability legislation,"
both enacted in the last Congress.
I am including for the information of
the Members the explanatory documents
which accompanied the President's
legislative proposal:
CIVIL SERVICE COMMISSION,
'Washington, D.C.. February 2, 1971.
Hon. CARL ALBERT,
Speaker of the House of Representatives,
Washington, D.C.
DEAR Mn. SPEAxER: President Nixon, in his
message today to Congress recommended en-
actment of a legislative proposal to establish
a new Federal Executive 8 rvice in the execn-
tive branch.
Accordingly, we are forwarding for con
Approved For Release 2004/12/15 : CIA-RDP74B00415R000600070040-1
 Approved For Release 2004/12/15 : CIA-RDP74B00415R000600070040-1
February 8, 1971 CONGRESSIONAL RECORD -HOUSE H 523
sideration by the Congress this request to
establish such a new personnel "Service." In
addition to the draft bill to amend Title 5,
United States Code, to establish and govern
the Federal Executive Service, we are enclos-
ing a section analysis and a detailed explan-
atory document entitled "The Federal Ex-
ecutive Service."
.There is a growing recognition that the
success of Government programs depends on
the effectiveness of men and women who
manage them. There is increasing concern
voiced by responsible leadership in and out
of Government that the way in which the
Federal, Government manages its executive
manpower, particularly its career executives,
is not adequate. The calls for change have
come from many quarters: Administration
spokesmen, Members of Congress, political
managers, career executives, Federal per-
sonnel managers, and the academic com-
munity.
The Civil Service Commission recognized
the need for, and has now completed, a
thorough review and analysis of the current
executive manpower program. We have,con-
eluded that basic changes requiring new
legislation are needed.
The proposed bill establishes in the execu-
tive branch a Federal Executive Service cov-
ering all positions previously established at
grades GS-16, 17 and 18, and most of the
other executives falling within the same
pay range under other pay authorities (about
7,000 current. executives). The coverage of
the service is based on level of, duties and on
salary levels, not on individually classified
jobs.
The coverage will be extremely broad in
order to correct, as far as possible, the existing
fragmentation of present appointment au-
thorities and personnel systems. It includes
all present and future groups of civilian ex-
ecutives in the executive branch, except those
specificaly excluded in the ptatute, and those
subsequently excluded by the President. It
establishes similar programs in non-execu-
tive branch agencies, except that there would
be a direct relationship between those agen-
cies and the Congress.
The personnel management system called
for in the proposal is especially designed to
meet the unique problems of executive level
employment. It is characterized by a greater
degree of managerial freedom than now pre-
vails and a special concern for the employ-
ment and utilization of career officials.
One of the most important benefits antic-
ipated from the Federal Executive Service
Is the elimination of many restrictions which
have inhipited the flexible assignment and
utilization of personnel as needed within
their agencies. We expect that the removal of
these constraints will bring about a signi-
ficant increase in the mobility of executives
within their departments and agencies. This
new program should serve to erode narrow
perspectives and parochial loyalties, and to
foster broader experiences and outlooks on
the part of executives. We believe such intra-
agency mobility is a necessary first step 'to-
ward increasing the mobility of executives
across agency lines.
The Federal Executive Service also includes
special features addressing the concerns ex-
pressed recently by the Congress that the
number of upper level spaces have increased
without regard to program priorities and
budget allocations. Agency heads share that
concern and the additional concern of the
Congress that the authorizations of positions
are becoming increasingly fragmented. The
bill does. away with the many special au-
thorities and special quota provisions of the
present system. The new system will be far
more understandable tall , and more easily
managed.
A new and comprehensive reporting system
will provide the President and the Congress
with detailed information about executive
manpower management which, heretofore,
was not readily available, thereby facilitating
the Administration's overview of this vital
resource. Furthermore, the interest in and
responsibility of the Congress for monitoring
executive employment and utilization and
providing legislative oversight is fully recog-
nized in the provisions for this stewardship
report.
A detailed discussion of the provisions in
the bill is contained in the accompanying
documents. The general features of the pro-
posal have been discussed at length with
many interested groups in and outside the
Government.
A similar letter is being sent to the Presi-
dent of the Senate.
The Office of Management and Budget ad-
vises that the proposed legislation is in ac-
cord with the program of the President.
By direction of the Commission,
Sincerely yours,
ROBERT E. HAMPTON,
Chairman.
A PROPOSAL FOR IMPROVING FEDERAL EXECU-
TIVE MANPOWER MANAGEMENT
SECTION I.-SUMMARY OF KEY FEATURES OF THE
PROPOSED FEDERAL EXECUTIVE SERVICE
I. Coverage.-The Federal Executive Serv-
ice will include the approximately 7,000
civilian executives, with certain exceptions,
now in grades GS-16, -17, and -18 and their
equivalents in the executive branch. (The
Appendix describes the size and make-up of
the current civilian executive workforce.)
II. Size:
Centralized position classification by the
Civil Service Commission will be eliminated
and each ager;cy will apply a position man-
agement approach best suited to its own
agency needs;
Agencies will annually review their execu-
tive manpower needs and request a specific
number of executives;
The Civil Service Commission will review
agency requests in collaboration with the
Office of Management and Budget and au-
thorize the number of executives for each.
agency; and
The authorizations will be reported an-
nually to Congress and become effective in
90 days.
III. Career and Noncareer Categories of
Executives:
Appointments to the Federal Executive
Service will be in two categories: Career and
noncareer.
Noncareer appointments will be for execu-
tives whose employment will likely be of a
temporary nature.
Career appointments will be for executives
whose general employment outlook and ex-
pectations will be oriented toward Federal
service.
Each category will have a different type
of appointment with different conditions of
employment.
Noncareer executives will be appointed and
removed at the pleasure of the agency head.
Career appointments must have prior ap-
proval of a Qualifications Board.
IV. Establishing and Controlling Career
and Noncareer Relationships:
The Civil Service Commission after col-
laboration with the Office of Management
and Budget will authorize a career/noncareer
ratio for each agency based on individual
agency requirements.
The aggregate Government-wide number
of noncareer executives will be limited to no
more than 25% of the total Federal Execu-
tive Service.
V. Compensation Arrangements:
Agency heads will have authority to set
and adjust salaries of career and noncareer
appointments within a range corresponding
generally to that encompassed by GS-16
through GS-18 positions. Salaries may be
raised but not reduced.
The Civil Service Commission will estab-
lish a government-wide executive salary dol-
lar figure which may not be exceeded by the
average executive salaries of individual
agencies.
VI. Assignments:
Agencies may assign and reassign execu-
tives to any duties within the scope of the
Service.
There will be no externally administered
position classification system.
Career and noncareer executives may be
used interchangeably.
VII. Qualifications Boards:
Qualifications Boards operating as agents
of the Civil Service Commission must approve
the qualifications of career executives prior
to their initial appointment.
Members of Boards will be appointed from
within and outside the Federal service.
VIII. Employment Agreements for Career
Executives:
Employment of career executives will be
governed by employment agreements;
Initial agreements will be for a period of
three years. Agreements will be renewable
for three-year periods;
When an employment agreement expires
and an agency does not offer the executive a
renewal, or makes such an .offer and it is
declined by the executive, the agency may
involuntarily separate the executive from the
service if he has completed 30 years of service
and is otherwise eligible for an annuity;
If an agreement is not renewed and the
executive is not separated under the "30
years of service" provision described above,
the executive must be offered a GS-15 ap-
pointment in the competitive service with
salary saving for two years. Thereafter, he
will receive appropriate GS-15 salary with
time in grade credit for his service at GS-1S
and above;
In addition, if the agency does not offer
an agreement renewal, the executive will be
eligible for discontinued service retirement,
if he meets the criteria or for severance pay;
During the period of an employment
agreement the agency agrees to assign the
executive to appropriate duties, to provide
training and development opportunities, not
to reduce his salary, and not to retire or
remove him except for offenses calling for
adverse action procedures;
The executive agrees to serve where needed
and to participate in training and develop-
ment activities. He may resign at any time.
He may appeal assignments to duties or
locations which he believes were made for
reasons other than the efficiency of the Gov-
ernment.
If a geographical move would result in un-
due hardships, the executive may decline
and has the following options: GS-15
employment with 2 year salary savings;
discontinued service retirement if eligible;
or severance pay.
The executive may transfer to another
agency to complete the period of an existing
employment agreement.
IX. Appeals.-Career executives may ap-
peal inappropriate assignments, violations of
conditions of employment, and removal on
charges to the Civil Service Commission
which has authority to direct corrective
action.
X. Reports.-The Civil Service Commission
will submit an annual Stewardship Report to
the Congress with current executive authori-
zations and projections for the coming year.
As a minimum, the Report will contain for
each agency and government-wide the num-
ber authorized for the Federal Executive
Service and the career/noncareer ratio.
XI. Effective Date: The Service will become
operative no later than one year after-enact-
ment of legislation.
During this period, operating procedures
and regulations will be developed.
XIS. Transition:
Executives with career appointments will
be offered initial employment agreements
Approved For. Release 2004/12/15 : CIA-RDP74B00415R000600070040-1
 11-524
Approved For Release 2004/12/15 : CIA-RDP74B00415R000600070040-1
CONGRESSIONAL RECORD --HOUSE February 8, 1971
without the requirement. of qualifications
approval.
Career executives who do not accept ini-
tial, employment agreements may continue
in their current appointments.
Some executives now serve under nonca-
reer executive assignment (NEA) appoint-
ments. They will 1 egiven noncareer appoint-
ments in the Federal Executive Service,
Other executives now serve in positions
which are excepted from the competitive
service for a variety of reasons. Examples
are: Attorneys in Schedule A positions; sci-
entists and administrators in positions ex-
cepted by law.
At -their option, agencies may offer em-
ployment agreements to these executives
without the requirement of qualifications
approval. If the individual accepts an em-
ployment agreement, he will receive a ca-
reer appointment in the Federal Executive
Service.
If the agency does not offer an agreement
or if the executive does not accept the agree-
ment, he may remain in his present appoint-
ment, retaining, his current rights and priv-
ileges.
XIII. Excluded Groups of Executives:
Agencies within the executive branch hav-
ing excluded groups will be encouraged to
review and adopt appropriate features of
the Federal Executive Service.
Agencies outside the executive branch hav-
ing excluded groups will be required to
establish their own executive services.
In 1968, the executive branch took an im-
portant first step to establish a modern ex-
ecutivemanpower program for the Govern-
ment. This effort, the Executive Assignment
System, established by Executive Order
1131$, November 17, 1986, was designed to
meet the need for personnel of the higher:t
attainable qualifications to staff General
Schedule positions at grades 18, 17, and 18
in the executive branch.
The Executive Assignment System was in-
troduced to bring about improvements as
rapidly as possible within the legal authori-
ties already available to the President and
the Civil Service Commission. In addition,
as charged under the Executive, order, the
Commission initiated a, study of operations
under this System with a view to recom-
mending basic changes for its improvement,
including changes in legislation it necessary.
The objectives of the Executive Assign-
ment System emphasized the responsibility
of top agency management for hiring, as-
signing, and developing Government execu-
tives: Within this policy, the program was
designed to assure a systematic approach to:
Agency and government-wide planning to
meet ;,present and future executive man-
power requirements;
Providing the means whereby agency
heads could select the most capable can-
didates: available from the entire Federal
service or from outside Government;
Giving incumbent executives and rising
professionals greater opportunity to
achieve their full potential for contributing
to our Nation's progress and for career ad-
vancement, personal recognition, and suc??
cess; and
Encouraging the development of execu-
tives committed to the overall purposes of
Government as a whole as well as to those
of a single agency or program.
These were sound objectives. The join!;
efforts of agencies and the Civil Service
Commission to find executive talent and ex-
pand development opportunities have pro-
duced results beneficial to both manage-
ment and the executives themselves.
One critical need was an ability to find
and compare high quality people quickly to
fill executive vacancies or to staff new pro-
grams.
This capability now exists through the
Federal Executive Inventory. It is an auto-
mated government-wide inventory contain-
ing background Information on more than
30,000 executives in grades GS-15 through
-18 and their equivalents in other salary sys-
tems. Since it was established in November
1967, over 4,400 individuals have been re-
ferred to agencies for their consideration in
filling about 1,200 positions.
The Executive Inventory also provides a
unique source of information for under-
standing the composition and Characteris-
tics of the Federal executive workforce. It
makes possible a variety of analyses as a
balsa for planning to meet the Government's
future executive staging needs.
While these results are a good beginning,
many problems remain and new challenges
are emerging. The increasing complexi-
ties and rapid changes facing society bring
new responsibilities to Government execu-
tives.
There is a growing recognition that one
way to .insure the success of public pro-
grams is to enhance the effectiveness of the
men and women who manage them; and
there is increasing concern that more should
be done to improve the authorities under
which the Federal Government manages
its executive manpower. the calls for re-
view come from many quarters: Adminis-
tration spokesmen, members of Congress,
political executives, career executives, Fed-
eral personnel managers and the academic
community.
In response to this concern, and drawing
on 3 years of operating experience with the
Executive Assignment System, the Civil
Service Commission conducted a compre-
hensive study of current executive man-
power practices and results. The study was
conducted with the assistance of an advisory
committee of agency personnel directors.
The results of the study are:
A restatement of objectives for a modern
executive manpower program.
An analysis of the problems to be over-
come in meeting these objectives.
A proposal for a new approach to the
management of executive resources requir-
ing legislative change.
SECTION III --OBJECTIVES
The goal of Federal executive manpower
management must continue to be to provide
the right number of executives with the
right skills and attitudes, in the right places,
at the right time, motivated to perform in
the most effective way. Operating experience
with the current program and recommenda-
tions of interested publics demonstrate the
need for a redefinition of objectives within
this broad goal.
To meet the Government's leadership
needs in today's world, an effective executive
manpower program must:
Require that top agency executives carry
out their responsibility for executive man-
power management and assist them in doing
ao;
Insure that executives who have respon-
sibility for Government programs have con-+-
mensurate authority over their executive re-
sources in proper balance with the needs of
the Government as a whole and the long-
run needs for a career workforce;
Provide the quantity and quality of talent
required by: forecasting needs; recruiting
and developing potential talent at all levels;
maintaining a pool of talent; and keepimg it
motivated;
Insure that the executives in the Federal
Government are responsive to public policy
as enunciated by the President and the Con-
gress and responsive to the top political
management of the Government, at all
times;
Provide individual. executives with oppor-
tunities to achieve their full potential for
contributing to the Nation's progress and for
personal growth, recognition, and work satis-
faction;
Assure that high quality employees at en-
try level and at the midmanagement; level
perceive that they can rise to the top and
get important and influential jobs with rea-
sonable security; and
Provide a central source to review, analyze,
and make recommendations on all aspects of
executive manpower management, including
a means for the President to hold agency
heads accountable for the management of
their executive manpower resources.
Major problems
The study highlighted several problems as
barriers to effective executive manpower
management. Not all agencies face all these
problems, nor do they exist in the same de-
gree in the agencies which do have them.
If it is agreed that these are the major ex-
ecutive manpower problems facing the Gov-
ernment as a whole, then it is essential that
action be taken to correct them. Any changes
in the ways in which executive manpower is
managed must address itself to these prob-
lems.
The problems are:
1. Government executives (both career and
noncareer) must cope with a variety of con-
straints on their decisions to organize pro-
grams and on hiring, assigning, and remov-
ing their key subordinates (both career and
noncareer). While such restrictions may have
served a purpose in the past, today they fre-
quently inhibit the executive from accom-
plishing his objectives. New systems are re-
quired which remove the unneeded con-
straints and let executives operate more ef-
fectively, recognizing tbiit the Congress will
continue to serve as an "overseer."
Over a dozen personnel programs govern
the selection, pay, assignment, and tenure
of executives. Many agency heads must deal
with several of these personnel programs.
They may receive manpower authorizations
under a number of different laws and regula-
tions. They may pay executives under differ-
ent pay systems. They often must consider
a variety of career rights when they want to
take any actions affecting their key subordi-
nates. The results are:
Opportunities for friction among members
of different programs;
Difficulties in assigning people into and out
of different programs;
Unnecessary administrative loads; and
Continuing frusttations for new execu-
tives who try to understand and use these
systems.
Another problem is that each personnel
program carries a number of prescriptive and
restrictive requirements that greatly reduce
the executives' staffing and unnecessarily re-
strict his authority to decide how programs
will be administered. These' requirements af-
fect every aspect of personnel management:
position authorizations, position classifica-
tion, qualifications of nominees, pay, promo-
tions, assignments, and retirement. Many of
these rules no longer serve the best interests
of the public. The results are:
Difficult distinctions among grade levels at
OS-16, -17, and -18;
Undue emphasis on prestige and status
factors In determining grade levels;
Meaningless distinctions among positions
designated as career or noncareer;
As unwillingness of agency heads to fill im-
portant executive posts labeled as "career"
with individuals whom they don't know well
and whom they fear will become "looked in":
An, appeals system. for reduction-in-force
actions unsuited to the executive workforce;
and
Inflexible authorities for paying executives
that lead to Inequities in individual situa-
tions within an agency or across agency lines.
Finally, agency heads are faced with severe
Approved For Release 2004112/15 : CIA-RDP74B00415R000600070040-1
 Approved For Release 2004/12/15 : CIA-RDP74B00415R000600070040-1
February 8, 1971
limitations on the numbers of executives
they may hire because of the various quotas
limiting the number of executive positions.
These ceilings do not allow the Civil -Service
Commission or the agencies to assign execu-
tive resources to changing program needs on
a timely and rational basis.
2. Executive manpower planning is grossly
inadequate. There is almost a complete lack
of planning to identify and meet future ex-
ecutive manpower needs and to explore and
develop sources of supply. Both short-range
and long-range planning are needed at the
agency level and for the Government as a
whole.
This lack of planning hampers executive
recruitment and executive development ef-
forts. With only a few exceptions, agencies
are not forecasting executive needs-either
to replace the executives they now have, or
to meet changing demands resulting from
modifications in program size or emphasis.
For example:
Agencies have only general ideas of the
number and kinds of executives to be re-
placed over the next five years because of
retirement, death, transfer, or resignation;
The sources of supply to meet future ex-
ecutive needs on either a short- or long-
range basis have not been identified. Legis-
lation for new programs is typically proposed
and approved with no analysis of the sources
of the necessary management talent; and
Executive manpower resource planning is
not incorporated into program planning. Pro-
gram and financial plans are not supported
by the appropriate analyses of executive man-
power requirements. '
3. Political executives, Congress, the gen-
eral public, and academics express concern
that the bureaucracy (both the system and
the people) is not responsive to new politi-
cal and program direction.
The issue is "how to insure that the bu-
reaucracy reflects public policy expressed
through the political process."
Unnecessary friction between career and
political executives frequently accompanies
changes in Administrations or administra-
toes.
Th'e new agency head is confronted by com-
plicated and constraining personnel systems.
He finds it difficult to look immediately to
the career "bureaucracy" to help him with
these problems because rightfully or not, he
sometimes perceives them as part of the
problem.
New agency heads perceive that many of
their key subordinates are "locked in," and
that they have no control over who does what
work. Moreover, they feel they cannot appoint
new men because they cannot easily estab-
lish new positions.
Past staffing actions tend to undermine
the confidence of new agency heads, espe-
cially where career employees have been
placed into political jobs and political
"types" into career jobs.
Present personnel systems do not ade-
quately recognize the value of providing to
agency heads a reasonable number of "their
own men to serve as advocates. This is not
necessarily a partisan Issue, but it is essen-
tial to building a unified and harmonious
management team.
4. Agency heads must confront a great
variety of pressures concerning whom they
choose for their executive positions.
The: growing trend to the greater profes-
sionalization of top mangement continues to
have an increasing impact on manpower
management at the executive level. Alliances
develop among professionals in and out of
Government to:
Influence program direction and size; and
Maintain professional oiel entials in the
staffs of agencies.
Other staffing pressures come from such
sources as:
,.Interest groups, for their advocates;
CONGRESSIONAL RECORD HOUSE H 525
Partisan sources, to reward party faith-
ful;and -
Congress, for constituent representation.
While on the one hand these pressures are
designed to influence staffing so that pro-
grams will be conducted in ways that agree
with the desires of the groups exercising the
pressures, on the other hand, the success of
programs frequently depends upon the sup-
port of the pressure groups. Therefore, the
agency head needs some way to accommodate
to these pressures.
5. The Government has no assurance that
the best available executive talent is being
identified, developed, and utilized. It is gen-
erally agreed that the demand for high qual-
ity leadership talent in the society as a whole
is already greater than the supply. Some
leaders feel that important public programs
frequently do not meet their objectives
partly because some of the executives in those
programs lack sufficient managerial skill. The
Government must be prepared to develop the
talent it needs now and will need in the
future.
This problem has several Important
dimensions:
Many career executives feel frustrated be-
cause they cannot look ahead confidently to
progression and career growth in the pro-
grams or organizations that interest them
and to which they believe they can make
their best contributions. Neither can they or
their agencies assess their opportunities or
plan their development and training;
Closely related to the above is the lack
of clearly identified career fields, promo-
tion ladders, or career development pro-
grams. Thus, clear career goals are not avail-
able as a basis to recruit, develop and train
executives;
A meaningful way has not been found to
assess and communicate the quality of an
executive's performance or to predict future
performance. Thus, agency heads who are
trying to fill executive vacancies frequently
cannot identify potentially high quality tal-
ent and systematically develop this potential;
and
In most agencies systematic training and
development of executives has not been made
an integral part of the total management
process. Thus, executive development fre-
quently lacks institutionalized continuity
and adequate attention by top agency
executives.
6. Currently, there is inadeauate central-
ized leadership and responsibility for man-
agement of executive resources. Under pres-
ent arrangements, the President undoubted-
ly finds it difficult to hold his appointees ac-
countable for this. The Government as a
whole lacks a system to insure effective, inte-
grated, and coordinated management of ex-
ecutive manpower resources across agency
lines. The causes underlying this problem
are:
Manpower resources, particularly executive
resources, do not receive the degree and level
of management attention that is devoted
to financial resources. No single agency has
responsibility for monitoring the total results
of executive manpower management. The
Civil Service Commission's responsibilities do
not encompass several important personnel
program areas; moreover, the Commission has
only limited responsibility for other pro-
grams; and
There is no systematic review and analysis
to determine the government-wide effective-
ness of the management of executive man-
power. The President does not receive periodic
reports of the stewardship of this resource,
nor does he receive systematic recommenda-
tions for needed improvements.
SECTION IV.-A PROPOSAL FOR A NEW FEDERAL
EXECUTIVE SERVICE WITH PURPOSES AND JUSTI-
FICATION
To respond to the deeply felt needs for
major improvements in the use of the Gov-
ernment's executive manpower resources, it
is proposed to establish a Federal Executive
Service with the features described below.
Coverage
The Federal Executive Service will include
all civilian executives now in the range of the
General Schedule grades 16, 17, and 18 and
certain other executives falling within the
same range under other pay authorities. This
coverage will include about 7,000 current ex-
ecutives. (The Appendix describes the size
and make-up of the current civilian executive
work-force.) From this base, future adjust-
ments of the size of the Service will be made
and justified. -
The coverage of the Service will be based
individually classified jobs. It will include
on level of duties and on salary levels, not on
all present and future groups of civilian ex-
ecutives in the executive branch, except those
specifically excluded In the statute estab-
lishing the Service and those subsequently
excluded by the President.
The coverage will- be extremely broad in
order to correct, as far as possible, the exist-
ing fragmentation of present appointment
authorities and personnel systems.
This broad coverage and elimination of
duplication will:
Allow new executives to understand easily
and quickly the personnel management sys-
tem governing their executive manpower;
Simplify and reduce the variety of redun-
dant administrative procedures which now
accompany executive staffing;
Eliminate differences in rules governing
pay, rights, fringe benefits, and recruiting
which often cause misunderstandings among
executives in the same organization;
Eliminate the preferential treatment previ-
ously given to some programs in requests for
executive manpower resources when needs no
longer exist;
Foster a government-wide career outlook
on the part of executives and potential ex-
ecutives;
Increase opportunities for executive mo-
bility among agencies and programs; and
Permit the Administration and the Con-
gress to exercise a more comprehensive and
systematic overview of executive manpower
management.
Many of the personnel systems which now
operate under special authorities will be
included in the new Federal Executive Serv-
ice. These special authorities were originally
established to give particular agencies flex-
ibilities for special purposes at specific points
in time. The new Federal Executive Service
will contain enough flexibilities to make it
appropriate to encompass these separate
systems. -
Exclusions within the executive branch
Seventeen groups of executives within the
executive branch will be excluded from the
Federal Executive Service, because they have
unique problems or needs that make their
inclusion under a general Federal Executive
Service infeasible at this time. The groups
are:
Executive Levels I-V.
The Foreign Service of the United States.
The Foreign Information Service.
The Peace Corps.
The Postal Field Service.
United States Attorneys, and the Federal
Bureau of Investigation, Department of
Justice.
Hearing Examiners.
Atomic Energy Commission.
Central Intelligence Agency.
Tennessee Valley Authority.
The National Science Foundation.
The Council of Economic Advisers..
The Department of Medicine & Surgery,
Veterans Administration.
Federal Deposit Insurance Corporation.
Federal Reserve Board.
Panama Canal Company.
Canal Zone Government.
Approved For Release 2004/12/15: CIA-RDP74B00415R000600070040-1
 H526
Approved For Release 2004/12/15: CIA-RbP74B00415R000600070040-1
CONGRESSIONAL R~CORD -- HOUSE February 8, 1971
The Office of the Comptroller of the Cur-
renc:P, and the Office of the Assistant Secre-
tary (International Affairs), Treasury De-
parttient.
dlgeneies outside the executive branch
in addition, executives In agencies outside
the executive branch will be excluded, They
are:
General Accounting Office.
Library of Congress.
Cie ernment Printing Office.
Muhitect of the Capitol.
Botanic Garden.
Taw Court of the United States.
Administrative Office of the United States
Courts.
District of Columbia Government.
These will be excluded because the Fed-
eral Executive Service :
Will be established to provide a more
unified, capable and harmonious manage-
ment-team for .the President in his role as
head of the executive branch; and
Assufnes the ,need. for a total coordina-
tion of executive resource management with
the Management of other resources in rela-
tion to the programs being managed-a task
the President cannot perform for the agen-
cies outside the executive branch.
In addition, for positions now subject to
Civil Service Commission purview in agen-
cies outside the executive branch, the pro-
posal contemplates establishing an Execu-
tive Service In each agency to be admin-
istered by that agency.
This will permit flexible interchange of
executives among all branches of the Gov-
ernment even though the executive branch
does not have operational responsibilities
for the other systems.
Size of the Federal Executive Service
The Federal Executive Service will initi-
ally consist of approximately 7,000 indi-
viduals. The size of this group will change
from time to time because of changes in
program requirements. No changes will re-
suit solely from establishing the new Serv-
ice.
Centralized position classification by the
Civil Service Commission will no longer be
used as a basis for authorizing executive
resources, establishing pay grades for in-
dlvid?ials, controlling assignments, or estab-
lishir..g qualifications of individuals. This
will:
Eliminate the existence, in practice, of two
perso::reel systems, one for positions and one
for people, which frequently are not in
harmony with each other;
Permit an agency and the Administration
to consider the overall leadership needs of
the agency or program rather than individual
position requirements;
Allow more equitable distribution of ex-
ecutive resources among agencies;
Permit the utilization of executives on
the basis of broad 'career qualifications
rather than on the basis of narrow profes-
sional specialization;
Eliminate grade as a status factor and
subst:.tute the prestige of membership in the
Federal Executive Service; and
Permit each agency to assign individuals
flexibly to whatever duties are required
and appropriate.
In lieu of centralized position classifica-
tion, the agencies and the Civil Service Com-
mission In collaboration with the Office of
Management and Budget will have the re-
spons;.bility to plan for and relate executive
manpower requirements to overall program
needs and priorities.
Agencies will annually review their execu-
tive manpower needs and request an au-
thorized number of executives. The Civil
Service Commission will review these re-
quests, in collaboration with the Office of
Management and Budget and authorize a
number for each agency.
These reviews will consider each agency's
total requirements, not just changes. There
will be no assumption that the same needs
continue from year to year.
The annual request of: the agencies; the
joint review-of the Civil Service Commission
and the Office of Management and Budget;
and the Civil Service Commission's final au-
thorizations will be based on such factors as:
The current level of program and budget.
The current level of executive staffing.
Anticipated program and budget requests.
Pending legislation.
The level of work to be done.
The Commission will annually report the
authorizations to the Congress. The authori-
zations will become effective 90 days after
the report.
The purpose of this arrangement of re-
quest, justification, and review will be to:
Require that the Civil Service Commission,
in conjunction with the agencies, relate ex-
ecutive manpower requirements to expanding
or contracting needs;
Require that all program changes and legis-
lation be accompanied by plans for meeting
executive manpower requirements;
Assure that agency executive manpower
planning is in consonance with the agency's
program and financial plan as approved by
Office of Management and Budget in the
program review and budget process; and
Assure that both within the agencies and
government-wide, executive manpower is
more effectively allocated in accordance with
the program priorities established by the
President and the Congress.
The new and comprehensive reporting sys-
tem to the Congress will be provided to:
Permit the current Administration to im-
prove and make more meaningful the over-
view of executive manpower management;
and
Allow the appropriate Committees of the
Congress to offer guidance to the agencies
and the Administration through the legis-
lative oversight process.
The Civil Service Commission after col-
laboration with the Office of Management
and Budget will also have authority to ad-
just the size of the Service authorized any
agency for one year for emergency purposes.
This authority will be subject to the fol-
lowing controls:
Changes may be made; only for special
circumstances clearly unanticipated at the
time of the annual authorization;
The Commission must notify the Congress
of its use of this authority and give its
reasons; and
The Commission may not Increase the
authorization in any one year by more than
1 % of the total authorization.
Career and noncareer categories of executives
The members of the Federal Executive
Service will be in two appointment cate-
gories; career and noncareer.
Each category will have a different type of
appointment with different conditions of
employment.
Noneareer
A noncareer category will be established in
the Service to accommodate the agency's
need for three different kinds of executives
whose employment will lilslely be of a tem-
porary nature as described below:
Executives whose relationships to the
agency head require an . interdependence
based on such factors as program philosophy,
political agreement or personal confidence;
Executives who work on relatively short-
term projects; and
Executives whose employment Is more ori-
ented toward their professions or occupa-
tions than to particular employers. These are
the highly mobile people w o move freely in
and out of private employment, universities,
private practice, and government in pursuit
of their specialized interests (the so.-called
"in and outers").
Noncareer appointments will be made at
the discretion of the agency head and serve
at his pleasure.
Such appointments will not be subject
to prior approval or review by a qualifications
review board (see later discussion).
Agency heads will be given the authority
to approve the qualifications of noncareer
executives so that they will have the fiexi-
bilities they need to:
Accommodate to a reasonable degree the
many staffing pressures they face; and
Hire a limited number of assistants with
political or personal relationships or who
agree on program philosophy.
Career
The career category will be composed of
executives whose general employment out-
look and expectations are oriented toward
Federal service generally.
The majority will probably come from
lower levels of Federal career employment
through the promotion process.
A small number will enter laterally from
outside the Federal career service expecting
to make Federal employment a career in
the future.
To make long-tern: Government service
attractive and highly prestigious, consider-
able emphasis will be given to strengthening
career appointments and to establishing an
open and public review process for entry
into the Service.
Career appointments will be made strictly
on the basis of merit and fitness.
Provision will be made for merit entry into
the career category from all sources; i.e., from
the ranks of the General Schedule, from
other Federal Government personnel systems,
from the noncareer category, and from out-
side the Federal service,
All career appointments will be reviewed
and approved by a Qualifications Board prior
to appointment (see later discussion) .
Assignments will not be designated as ca-
reer or noncareer. This will overcome the
following difficulties:
It Is very difficult t+, make realistic dis-
tinctions between career and noncareer as-
signments.
Drawing clear, lines between policy devel-
opment and administration of policy on an
Individual position basis frequently cannot
be done realistically.
There are tremendou'. pressures to exempt
positions from the career service despite the
real content of the jobs, especially when new
positions In new progreins are established on
a projected basis.
Designation of positions as noncareer has
restricted Job opportunities for career execu-
tives.
In many agencies, noncareer positions have
been grouped at the top of the executive
structure with the career positions grouped
at the lower levels.
Many competent career executives consider
assignments to noncareer positions undesir-
able because of the complete loss of security
that goes with such assignments.
Designation of positions as career and non-
career curtails the use of a flexible manage-
ment structure and the flexible use of peo-
ple within that structure.
Establishing and controlling career and
noncareer relationships
In lieu of designating an authorized posi-
tion or list of duties as career or noncareer,
each agency will be authorized a ratio of
career/noncareer executtves.
This will be done to allow an agency to
build a management team that includes:
Executives to provide the continuity and
experience needed by modern Government
programs;
Executives In whom management has spe-
cial confidence, because of a personal or -po-
litical relationship, or because of the execu-
tive's program philosophy; and
Approved For Release 2004/12/15 : CIA-RDP74B00415R000600070040-1
 Approved For Release 2004/12/15.: CIA-RDP74B00415R000600070040-1
February 8, 1971 CONGRESSIONAL RECORD - HOUSE H 527
Executives with specialized skills for short- pensation systems and requirements affect-
term public projects or with only a tem- ing similar types of executives in the same
porary interest in a Government assignment agency.
or program. Agency heads may increase salaries. How-
The use of the career/noncareer ratio will ever, as an inducement to potential career
accommodate a wide variety of problems now executives inside and outside of the Govern-
faced by agency heads. It will provide: ment to -accept the conditions applicable to
A mix of the skills of career professionals the Federal Executive Service, the salaries
and appointed officials; may not be reduced.
An opportunity for agency heads to make This pay protection will be part of the
reasonable accommodations to requests for compensation for the obligation to serve
appointment of political party constituents, wherever assigned either organizationally or
interest group advocates, academics, and geographically.
professional group members; and It will provide a stability of income to
A'means for the C>ner-ss and the Admin- make the Service more attractive.
istration to ensure that the executive staffs It recognizes that in those salary systems
of the agencies can be made-responsive to where agencies can presently reduce salaries,
the public will expressed through the politi- they practically never do so.
cal mandate. Agency authorities will be limited to an
The Civil Service Commission after col- authorized salary range for the Federal Ex-
laboration with the Office of Management ecutive Service.
and Budget will authorize a career/noncareer The Civil Service Commission after col-
ratio for each agency based on individual laboration with the Office of Management
agency requirements. and Budget will recommend the range as
The aggregate government-wide number of part of its overall salary recommendation.
noncareer executives will be limited to no This range will approximate that which
more than 25% of the total Federal Execu- has been encompassed by General Schedule
tive Service. positions in grades GS-16/18 in the past.
Agencies will annually review their current In addition, agencies will be required to
ratios and justify continuing or changing manage their executive salaries so that an
them. average salary will be maintained within
After a review of the requests and justifl- the limits designated by the Civil Service
cations, the Commission will authorize Commission after collaboration with the Of-
specific agency ratios. flee of Management and Budget.
The Commission will not apply a uniform The Civil Service Commission after col-
or set ratio to all agencies. laboration with the Office of Management
,The ratios of individual agencies will vary and Budget will establish a dollar figure
greatly depending on the type of program - within the executive salary range for appli-
involved, the characteristics df the executive cation to all agencies. Without specific au-
workforce, and the degree of involvement in thorization this dollar figure may not be
controversial and sensitive public programs. exceeded by the average salary levels within
As with size authorizations, the ratios will individual agencies.
become effective 90 days following the Com- The Commission after collaboration with
mission's annual report to Congress. the Office of Management and Budget may
The present ratio of career to noncareer authorize exceptions to this requirement for
executives in the General `Schedule - Is ap- particular agencies which have special execu-
proximately 76% to 24%. Experience indi- tive staffing circumstances, such as:
cates that limiting the percentage of non- Agencies with only a few executives so
career appointments to not more than 25% that an average becomes meaningless; and
of the executive workforce will provide a very Agencies which have unique responsibil-
satisfactory and realistic arrangement to ities that have resulted in average executive
meet ex-cutiv' staffing requirements on a salaries near the top of the present GS-16/18
government-wide basis. range.
It will permit a wide variation of the ratio This salary device:
from agency to agency in recognition of pro- Will prevent escalation of all salaries to the
gram needs. - top of the range; and
It. will provide a mix of career and non- ' Will achieve reasonable equity and uni-
career executives throughout the top orga- formity throughout the Government.
nizational structures of agencies rather than To provide equity for the Federal Executive-
a bunching of the career group at the bot- Service, executives will automatically receive
tom of the executive levels as it is now in comparability pay increases and other fringe
many agencies. benefits when they are authorized for other
Compensation arrangements
Agency heads will have authority to set
and adjust the salaries of career and non- Agency heads may assign and reassign
career appointments to the Federal Execu- career and noncareer executives to any duties
tive Service according to -their judgement of - anywhere (organizationally or geographi-
the value of the individual to the organiza- cally) which properly fall within the scope
tion and the responsibilities and duties he of the Service (duties higher than those
carries. classifiable at GS-15 or the equivalent).
This will allow the Government to be com- The Federal Executive Service will not
petitive in attracting and keeping high tal- provide for a government-wide system of
ent, position classification. Agencies will devise
It will remove the restriction on entry and operate their own organization and
pay rates. position management systems.
It will allow the career executive ap- Duties to which executives are assigned
pointed from a lower level within Govern- will not be designated "career" or "non-
meat to be paid on a comparable basis with career." Career and noncareer executives will
those appointed from outside the Govern- be used interchangeably.
ment. Executives may appeal, to the Civil Service
It will allow salaries to be set within broad Commission, reassignments to duties or loca-
limits in accordance with the estimate of a tions which the executives believe were made
person's worth and how the agency intends for reasons other than the program efficiency
to use him. of the Service.
It will allow pay increases to reward out- In this way agencies will have the flexi-
standing performance. bility to use people based on where they are
It will recognize the need at the executive most qualified to serve or most needed, rather
level for a different pay concept than the than on salary structure, position structure,
present automatic, periodic pay increases. tenure rules, or classification distinctions.
It will eliminate the disparities in com- It will allow a mix of career and noncareer
executives above the GS-15 level throughout
the organizational structure of agencies.
Executives may be used on the basis of
broad career qualifications rather than on
the basis of narrow professional specializa-
tion or political background. Thus, agency
heads will be able to accommodate to shift-
ing personal relationships in accordance
with individual talents and qualifications.
Agencies will be able to organize and
structure executive relationships to accom-
modate to the needs of particular agency
programs. -
Qualifications boards
The Federal Executive Service will give
particular attention to the needs for special
arrangements to insure high quality appoint-
ments to the career service.
Agency heads will continue to select their
career executives, but their appointments
will be subject to the prior approval of,
Qualifications Board.
This feature will insure that the Federal
executive manpower management program:
Recognizes the long-run implications of
career appointments for carrying out public
programs;
Maintains the confidence of the public
that decisions on career executive appoint-
ments will be based only on objective con-
sideration of the needs of the Government
and not to favor special groups or indi-
viduals,
Encourages agency headsto select on the
basis of the best qualified;
Gives agency heads a means to resist un-
reasonable interest-group pressures on
staffing;
Assures high quality membership in the
Federal Executive Service by screening out
weaker nominees; and
Makes appointment to the Federal Execu-
tive Service a matter of high prestige.
The Civil Service Commission will estab-
lish the Qualifications Boards. These Boards,
acting as agents of the Commission, must
give prior approval to agency selections for
initial career appointment in the Federal
Executive Service.
The approval of a Board will not be re-
quired for:
Noncareer appointments.
Renewals of employment agreements (dis-
cussed later).
Assignment or reassignment to duties
within the agency.
Transfers to the Federal Executive Service
in another agency.
Incorporation Into the Federal Executive
Service of present career executives upon
implementation of this proposal.
The Boards will be established as agents of
the Civil Service Commission in order that
they may be appointed and serve as objec-
tively as possible.
Members will be highly qualified experts
in their own occupations and generally
known and accepted as such.
Members will be appointed from within
and outside the Federal service so that vary-
ing points of view will be represented and so
that the decisions of the Boards will not be
unduly influenced by any particular groups.
Outside members will be paid for their serv-
ices.
A number of separate Boards based on
broad career programs or occupational areas
will be established so that each Board will
be composed of adequate program and pro-
fessional expertise.
Board members will provide a high degree
of personal knowledge of the kinds of peo-
ple needed, who should be considered for
career appointments in the Federal Execu-
tive Service, and where they are located.
The Qualifications Boards will be charged
with the responsibility for insuring that
initial career appointments are made with
a view to the long-run needs of the Service.
They will take into account:
Approved For Release 2004/12/15 :.CIA-RDP74B00415R000600070040-1
 H 528
Approved For Release 2004/12/15 CIA-RDP74B00415R000600070040-1
CONGRESSIONAL RECORD --HOUSE Feb r'uary 8, 1971
The potential of the individual for long- Not to reduce the career executive's salary;
term contributions in broad career areas: Not to remove the career executive except
Short-term staffing pressures will not be al- for offenses, calling for adverse action proce-
lowed unduly to influence career selections: dures. A career executive may not be removed
these should be met through appointments in consequence of a reduction-in-force or
to the noncareer category; Such broad and reorganization;
thorotgh career consideration at the time of To provide training and career develop
appointment will make it unnecessary for meat opportunities based on individual and
the Qualiflcatlons Boards to review subse- organizational needs, the; program of the
quent reassignments of members of the Fed- President, and congressional concern and in-
eral Executive Service. terest; and
The nominee's past and present perform- This provision recognize) the need for the
once to Insure that he has as great a likeli- continuing, long-term development of exec-
hood of being successful in the Federal utives to meet the Government's needs and
Executive Service as possible. helps overcome the short-term perspective
Employment agreements for career executives of many agencies faced with immediate pres-
sures for program success.
erned by an employment agreement between
the executive and the agency.
This agreement will recognize the special
nature of career appointments and the need
to provide attractive and stable career op-
portunities for the career service as viewed
by entry-level and mid-level employees.
The agreement will be founded upon mu-
tually understood conditions of service
agreed -to- by the agency In offering employ-
ment and by the career executive in accept-
ing the employment.
A fixed-term employment agreement will
be provided to:
Avoid the perception on the part of agen-
cies and executives that incumbents are
"looked in" to particular jobs or levels;
Assure that retention of executives is based
on merit rather than tenure and longevity by
providing periodic reviews of incumbents at
the termination of their employment agree-
ments
Establish a clear obligation on the part
of, the Government to use executives pro-
ductively during the period of their agree-
ments regardless of the types of sensitive or
controversial programs with which they have
been or are involved;
Give executives realistic and practical em-
ployment and salary protection for fixed pe-
riods of time and to avoid: The perception
that reduction-in-force actions can be and
are designed to get around the legalistic pro-
cedures, now used to provide security; Un-
realistic situations where executives must
appeal against the management team of
which they are apart.
Give agencies a greater means of assuring
that executives are responsive to public pol-
icy; and
Assure that high-quality employees at en-
try level and at the mid-management level
perceive that they can rise to the top and get
important and influential jobs with reason-
able security.
The Initial employment agreement will be
for a period of 3 years.
The career executive who accepts appoint-
ment into the Federal Executive Service will
be governed by a number of features designed
to encourage positive executive manpower
management.
To allow mobility, and preclude unneces-
sary restrictions on personal employment
choices, the career executive may:
Resign from the Federal Executive Service
at any time;
Transfer to any agency or employment
group excluded from the coverage of the Fed-
eral Executive Service;
Transfer to the Federal Executive Service
in another agency. In this case, to Insure
periodic review of all Federal Executive Serv-
ice appointees, his new agreement may only
be for a period of time equal to the remain-
Ing time of his old agreement, Thereafter, his
employment agreement may be renewed by
the new agency;
Retire or be retired for medical disability;
and
Retire if eligible.
The executive recognizes that he will be re-
quired to serve in whatever capacity he will
be needed in the organization and wherever
he' will be needed geographically.
He will be protected by a requirement that
any duties he is given must fall properly
within the scope of the Federal Executive
Service.
He may appeal assignments to duties or
locations which he believes were made for
reasons other than the efficiency of the Gov-
ernment.
If the acceptance of a geographical move
results in undue hardship, an executive will
be able to decline the move and choose one
of the following options:
GS-15 employment with 2
saving;
Discontinued service retirement if eligible;
and
If not eligible for retirement benefits, he
may resign and receive severance pay.
If an employment agreement is not re-
newed after a geographical move, the execu-
tive will be able to move back at the expense
of the Government to his ! location at the
s e5 the executive will accept
the reipon- In ad, for those rare cases when an
e wrvice: ith 30 years oft er v~ce) ears of service; age sibility to continue his development both as executive l feels that the Agency has not met
5
Unless their yeas would carry the execu- an execution and as a professional within its obligations under the employment agree-
tpat the time of mandatory retirement his field. At the time of his consideration for ment regarding assignments, utilization or
tive iv e a with 15 years of service in which an employment agreement renewal, the conditions of employment, the executive may,
y ) agency will take Into account the effort and as a last resort, seek adjudication and re-
case the initial agreement would terminate progress the executive has made in his own dress; and
on that date. continuing development.
A period of three years will be provided: To assure an independent and objective
Agencies will be encouraged to strengthen hearing the appeals will be made to the Civil
To insure that the inital agreement will their executive manpower management pro- Service Commission which will be given final
be long enough to attract high quality people gram by establishing boards within the administrative authority to take corrective
and long enough to,allow reasonable pro- agencies to assist them In reviewing romi- action if it finds the appeals should be sus-
ductivity on the part of the incumbent; and pees for initial executive appointments or tained,
To provide a reasonable t
ime
"~- - Renewal of employment agreements
bents arid` reach it judgement as to whether A provision for a stewardshi p report to Con
their eshould be continued. A number of specific arrangements w1.li be gross and a congressional review will be
eir employment
g the period of an employment agree- provided to give the agency flexibility in con- made in recognition of the historical and
merit the agency will agree: timing the employment of a career executive appropriate interest of the Congress in the
un of an em- To assign the career executive for the menttandxpfortiprotecting thenIndividual resou cles4tand in the g n ral mans ementiof
whole period to duties properly falling with- should he or the agency not wish to renew the Government's executive manpower, of
In the scope of the Service; the agreement. An annual report of
agency and govern-
To give the agency as much flexibility as
possible. it may offer an. employment agree-
ment renewal for three-year periods until the
executive becomes eligible for mandatory re-
tirement.
The agency may offer renewal, and the ex-
ecutive may decline. In that case:
If the executive has completed 30 years of
service and is otherwise eligible for an an-
nuity, the agency may involuntarily sepa-
rate the executive from the service;
If the executive is not separated from the
service under the "30 years of service" provi-
sion described above, the agency must offer
the executive a bona fide continuing posi-
tion for which he Is qualified at the GS-15
level in the competitive service. This offer
may not cause adverse actions to any em-
ployee already serving in a GS-15 appoint-
ment; and
The agency must (as under present stat-
utes) continue paying the employee for two
years at the rate of his last salary in the
Federal Executive Service.
The agency may choose not to renew an
agreement. In that case:
If the executive has completed 30 years of
service is and is otherwise eligible for an an-
nuity, the agency may involuntarily separate
the executive from the service;
If the executive is not separated from the
service under the "30 years of service" pro-
vision described above, the agency must offer
the executive a bona fide continuing position
for which he is qualified at the 08-15 level
in the competitive service with two years of
salary saving: and
If the executive does not swept the GS-15
appointment, he will be separated by the ex-
piration of his agreement, This will be con-
sidered an involuntary separation.
If he will be eligible f,,: discontinued serv-
ice retirement, he will be entitled to those
benefits (age 50 with 20 years of service, any
age with 25 years of service).
Otherwise, he will be eligible for "sever-
ance pay" benefits.
If the executive accepts OS-15 employ-
ment:
He will have two years of saved salary;
When the saved salary period expires he
will continue in his 091 16 employment at
whatever salary step would be appropriate on
the basis of total time served at grade GS-15
or above: and
While serving at GS-l5. he will be subject
to all protections and conditioning of em.
ployment applicable to all other GS-16's serv-
ing In the competitive service.
Appeals
As with all personnel systems, the Federal
Executive Service will have a means, inde-
pendent of management, for its members to
appeal and seek relief if they feel the agency
has not met its obligations or is acting Con-
trary to official requirements.
The present rights to appeal adverse ac-
tions and involuntary disability retirement
Approved For Release 2004/12/15 : CIA-RDP74B00415R000600070040-1
 Fgbruary 8, 197~`pproved F~- 1A /1 E BDP7A8 15R000600070040-1 H 529
ment-wide authorizations including career
and noncareer ratios will provide the Con-
gress with periodic opportunities to review
and influence the Government's executive
manpower program.
This report will also be the means by
which the general public will be periodically
informed of the, actions its Government is
taking in the management of executive re-
sources. The report will provide the openness
of information that is the foundation of an
effective merit system.
The Civil Service Commission will make
this detailed report showing the following
information for each agency and govern-
ment-wide.
The current and projected size of the Fed-
eral Executive Service.
The current and projected ratios of career
to noncareer appointments within the Serv-
ice.
The current and projected salary cost of
the Service.
' The current and projected distribution of
salaries and the average salaries.
The Civil Service Commission's actlgns and
supporting justifications in authorizing ap-
pointments for emergency needs.
Information on the overall program for
management of the Government's executive
manpower resources which might be help-
ful to the Congress in exercising its general
oversight.
Career development activities.
Training activities and plans.
Analytical studies.
After 90 days following the submission of
the report to Congress and in the absence
of contrary action decided upon through
the legislative oversight process, the agency
size and ratio authorizations may be Im-
plemented.
System responsibility placed in the central
personnel agency
The administration of the Federal Execu-
tive Service will be placed in the Civil Serv-
ice Commission for the following reasons:
To fix leadership responsibility for the de-
velopment and operation of a positive per-
sonnel program for the upper levels that
will:
Interrelate manpower management
throughout all levels from professional entry
to the executive levels by defining career
fields and patterns of progression and In-
suring that developmental and training op-
portunities required for career progression
will be provided,
Insure that manpower resources, partic-
ularly executive resources, will receive com-
parable top management attention to,that
given other resources so that:
Manpower requirements will be, related to
program plans, priorities, and pending legis-
lation; and
Staffing needs will be projected and sources
of supply will be developed.
To enlarge the overview of the central
personnel agency and give it more respon-
sibility for stewardship and responsiveness
to Congress and the Administration. This
will :
Establish a single focal point for the Presi-
dent to manage and control the utilization
of the great majority of the Government's
executive resources.
Provide a unified source that will:
Be a single authority accountable for exec-
utive resource stewardship; and
Assure government-wide consistency in
the application of the various regulations
of the Federal Executive Service.
To encourage a government-wide out-
lopk on the part of agency management so
tliatthere, willbe:
A government-wide, pproach to executive
manpower management; and
Increased opportunity for mobility of ex-
ecutives and potential executives among
agencies and programs.
Effective date
The Federal Executive Service will come
into being and the operating provisions will
become effective no later than one year after
enactment of the proposed legislation. Dur-
ing this period, operating procedures and
regulations will be developed.
The Civil Service Commission will be au-
thorized to issue such regulations as will be
necessary to carry out the legislation.
Transition to the Federal Executive Service
Executives with career appointments
To give present career executives maximum
opportunity to participate in the Federal Ex-
ecutive Service, all present career executives
will be offered employment agreements:
All career executives may take 3-year
+sgreements if that does not carry them
oeyond mandatory retirement. If they are
subject to mandatory retirement before three
years, they may take agreements for periods
up to mandatory retirement; and
Career executives accepting employment
agreements will be exempt from the . re-
quirement of qualifications approval pro-
vided the agreement offer is accepted within
a reasonable time to be established by im-
plementing regulations.
To Insure that any rights or protections
presently enjoyed by career executives will be
preserved, executives:
May choose not to take an employment
agreement, but to continue under their cur-
rent appointments with all of their rights
and privileges;
Thus, incumbents will not be forced to
make a change; and
In the event of reduction in force, there
will be no competition between executives
in the Federal Executive Service and those
holding other types of appointments.
To avoid inequities and hardship, the
Civil Service Commission will have authority
to regulate the details of the transition and
to correct administrative errors and over-
sights in complying with its regulations.
Executives With Excepted Appointments
The status of executives now serving un-
der noncareer executive assignment (NEA)
appointments will not change. They will be
given noncareer appointments in the Federal
Executive Service.
All of the protections of other executives
serving In pcsitions which are excepted from
the competitive service will be preserved:
Because some of these appointments are
actually career types of appointments (e.g.,
some attorneys in Schedule A), the agency,
at its option, may offer individual executives
career appointments with employment agree-
ments without the requirement of qualifi-
cations approval; and
Those other executives who may not be of-
fered an employment agreement and those
who do not accept an agreement, will be pro-
tected by being allowed to remain under
their present appointments. They will retain
all of the rights and privileges of those ap-
pointments.
Application to excluded groups
Because the features of the Federal Execu-
tive Service merit consideration for execu-
tive manpower management programs
throughout the Federal Government, execu-
tive branch agencies with excluded groups
will be encouraged to consider the adoption
of appropriate features.
Because the Civil Service Commission now
has responsibilities for certain personnel
functions for executives in agencies outside
of the executive branch, provision will be
made for those agencies to establish their
own executive services, with the agency head
as the regulatory, administrative, and report-
ing authority.
This will be done because:
Executive manpower management should
be Integrated with the management of other
resources in relation to the programs being
managed. Since, outside of the executive
branch, the agency head will determine his
program plans and receive his resource au-
thorizations in a direct relationship. With
Congress, it Is more appropriate for that
agency head to deal directly with the Con-
gress on the administration of his executive
service;
Similar executive services in the executive,
judicial, and legislative branches will facili-
tate the exchage of executives throughout
the Government; and
There no.longer will be new positions at
GS-16, -17, or -18 established anywhere in
the Federal service, in or out of the execu-
tive branch.
Appeals will continue to be heard and fl-
nally adjudicated by the Civil Service Com-
mission.
So that any Federal agency will be able to
have the benefit of the best executive man-
power management services available, the
services to be provided by the Civil Service
Commission, such as the Executive Inven-
tory, will be made available to any agency.
SECTION V.-OPERATION OF THE FEDERAL
EXECUTIVE SERVICE
Determining the size of the FES would
begin within individual agencies, where re-
views of executive manpower needs would be
conducted annually. To make their request
for executives consistent with the relative
importance and priority of agency programs,
agency reviews would be based on such fac-
tors as:
Current level of program and budget;
Current level and. nature of executive
staff;
Anticipated program and budget requests;
Pending legislation; and
Nature and level of the work to be per-
formed.
Agencies would submit to the CSC on or
about February 1 their requests for:
Number of executives required;
Career/noncareer ratio; and
Proposed average salary.
The CSC, after collaboration with OMB,
would authorize a maximum number of ex-
ecutives, a career/noncareer ratio and an
average salary ceiling for each agency.
The ratio of noncareer could not exceed 25
percent of the authorized FES total govern-
ment-wide, but it would vary from agency
to agency.
Except as specifically authorized, the aver-
age salary for an individual agency could not
exceed the government-wide figure.
The CSC would report its authorizations to
Congress on April 1. The authorizations
would become effective in 90 days, unless
Congress acted to the contrary.
Agencies could appoint (hire) executives
from inside or outside of Government up to
the numbers authorized and in accordance
with the career/noncareer ratio.
Agencies would not have to justify ap-
pointment of individual executives based on
centrally approved position classifications-
instead, agencies would develop tailored po-
sition management systems.
Individual executives could be paid salaries
anywhere within the salary range for the
Federal Executive Service--but the agency
would have to stay within its authorized
average salary ceiling.
Agencies would have complete authority to
hire and remove noncareer executives.
Agencies would appoint career executives
according to the following procedures:
Following an intensive search based on
merit principles, the agency would make a
selection subject to approval by the CSC.
Agencies would be encouraged to estab-
lish and utilize internal boards for recruit-
ing and qualifications review.
Candidates from both inside and outside
Government could be selected,
Approved For Release 2004/12/15 : CIA-RDP74B00415R000600070040-1
 x530
Approved For Release 2004/12/15 : CIA-RDP74B00415R000600070040-1
CONGRESSIONAL RECORD - HOUSE
Within the CSC, selections would be pre-
sented to the appropriate qualifications
board for approval prior to formal appoint-
ment by the agency head.
There would be 15-20 qualifications
boards, based on occupations.
'As agents of the CSC, each board would
operate government-wide for the occupa-
tions wi.thin its cognizance, and be composed
of recognized leaders in the Government,
academic and private sectors.
The boards would review the agency's se-
lectee in terms of:
How the agency identified likely candi-
dates:
The selectee's potential for long-term con-
tributions to the Federal service;
The appropriateness of his qualifications
compared to the qualifications needed to
carry out the agency's programs (and the
qualifications on which recruiting was
based) ; and
His professional qualifications and stature
in the occupation.
Qualifications boards would not review as-
signments following appointment, or re-
newal appointments.,
Agencies would have maximum flexibility
in the assignment of executives.
Career and noncareer executives could be
assigned to duties interchangeably-posi-
tions or duties would not be designated as
career or noncareer.
All executives could be assigned wher-
ever needed, regardless of the nature of the
duties, or their organizational or geographic
location. Provided the duties were of execu-
tive calibre, and assignments were not made
arbitrarily or capriciously. There would be a
procedure whereby executives could appeal
if they felt these latter provisions were not
met.
Career appointments would be made on
the basis of 3 year, renewable employment,
agreements, which would obligate the agency:
Not o reduce the executive's salary -for
the th-ee-year period (although increase:
would be allowed at the agency's discretion) ;
Not to separate the executive except for
cause, or to demote him from executive
status by reduction-in-force or assignment
of inappropriate duties; and
(The executive would agree to serve wher-
ever needed, as described above and could
resign or retire (if eligible) at any time.)
When the agreement expired, the agency
would have the option of offering the execu-
tive a renewal-for 3 years. The number of
renewals would be limited only by the
executive's reaching the mandatory retire-
ment age.
Each agency would administer the renewal
process in the manner most appropriate to
its needs.
A formal review would not be mandatory;
renewals could be, handled informally.
Agencies would be encouraged to set up
advisory boards to advise and assist the
agency head as to the renewal of individual
employment agreements.
If the agency chose not to offer a renewal,
or if such an offer were made and declined
by the executive, the agency may involun-
tarily separate the executive from the service
if he has completed 30 years of service and
is otherwise eligible for an annuity. In an
other cases, the agency would have to offer
the executive a continuing GS45 position
in the career service (without' displacing any
other employees). He would then be paid for
two years at the rate of his last FES salary,
before reverting to the appropriate rate of
the GS-15 schedule.
Executives who chose not to continue em-
ployment as an executive or as a OS-15 and
are not separated by the agency under the "30
years of service" provision, could elect op-
tional or discontinued service retirement, If
eligible, or separation with' severance pay.
NOTE.-This proposal presupposes maxi-
mum emphasis on the use of talent files with-
in the agency and on a government-wide
basis; on a greatly increased attention to
managerial and professional, development of
executives; and on a much inprovedsystem
of effective executive appraisal. These pro-
gram approaches are not detailed as part of
the FES proposal since their accomplish-
nrent does not depend on legislative system
THE FEDERAL EXECUTIVE.--(1TNDER CURRENT
PERSONNEL SYSTEMS)
There is always some confusion about
who is a Federal executive. No adequate de-
finitions exist, but salary level is a frequent-
ly used criterion. Thus, "Federal executives"
could mean all of the full-time employees
of the executive branch who earn as much
as the beginning salary ($26,547) of a Gen-
eral Schedule grade 16. The table below shows
the numbers of civilian executives for various
personnel programs who would meet that
criterion.
Febrrtary 8, 1971
TABLE i
(As of Oct. 1,
970)
Personnel program
Number
Percent
Executive level (levels 1--V)_.
580
5
General schedule (GS 16-18),
5.679
52
Public Law type'.2 _ _ _ _ .. _ - -
1,244
12
Foreign Service (FSO and FSR
levels l and 2)_
2, 117
19
Other 3_
1, 265
12
Total _-__
10,903
100
' The focus of attention of the existing Federal executive
manpower program and the executive assignment system is on
the 6,941 General Schedule and Pubtc Law type positions which
comprise 64 percent of the total.
The nature of this universe of 6,941 positions is better under-
stood when they are broken down by type of authorization
(Government-wide quota, nnnqueta, etc.) and by career
noncareer. Of the 1,244 Public law type positions, 814 are in the
competitive career service. The distribution of the 5,697 positions
In the General Schedule is shown in table 2.
2 Certain limited scientific and pretessional positions involved
in research and development activities requiring the services of
specially qualified persons and paid at special salary rates not
less than GS 16 or more than GS-18,
a Consists primarily of positions in TVA, AEC, Department of
Medicine, and Surgery of VA, and the Postal Field Service.
TABLE 2.-GENERAL SCHEDULE POSITIONS IN GRADES 16-18'
(As of Oct. 1, 1970)
Exceptedrivoncareer
Total
Number
Competi-
Fercent live career
Schedule Schedule
NEA A B
Other
Total
Government-wide quota-_
2,734
48
1,839
491
339
3
62
895
Defense quota-
407
7
320
34
48
5
87
Nonquota--------- -_--------- ___
1,953
34
1,831
35
44
11
32
122
Special authorities--_____-_
603
11
344
1
11 ..__._
_
247
259
Total- -_-______-
5,697
100
4,334
561
442
19
341
1,363
I GS--16=4,054 (71 percent), GS-17-1,175(21 percent), GS-18=468(8 percent).
Explanation of Terms:
Competitive/Career: The "competitive
service" refers to those positions where the
rules of the Civil Service Act regarding entry
into service must be followed. The "career
service" is a generic term used to refer to
those positions and incumbents governed by
Civil Service Commission rules and regula-
tions concerning recruitment, development,
promotion, and tenure. Thio narrow defini-
tion does not take into account many career
type personnel systems or positions which
are excluded from the Civil! Service Act. All
positions are considered to be "Competitive!
Career" unless specifically exempted under
the various procedures for doing so.
Excepted/Noncareer: Those positions and
incumbents specifically exempted from the
competitive service by law or regulation.
Government-wide Quota:,The number c.f
positions authorized by the Congress and
allocated to agencies by the Civil Service
Commission. It is a ceiling on the number
of positions which may be ! established.
Defense Quota: A special allocation of posi-
tions for exclusive use by the Defense De-
partment.
Non quote: Congress has authorized certain
types of positions that may be established
outside the government-wide quota. These
nonquota positions may be authorized for
professional engineering positions primarily
concerned with research and development
and professional positions In the physical
and natural sciences and medicine.
Special Authorities: These are positions
specifically earmarked by legislation for par-
ticular programs or organizations.
SECTION ANALYSIS
ro accompany the draft bill to amend title 5,
United States Code, to establish and gov-
ern the Federal Executive Service, and for
Other purposes
The bill -is divided into six sections. Section
1, which is divided Into ten paragraphs,
amends title 5, United States Code, to estab-
lish and govern the Federal Executive Serv-
ice. Sections 2 through 6 are not amend-
ments of title 5, but contain provisions
needed for the transition from the Executive
Assigment System to the Federal Executive
Service. The separate sections, paragraphs.
and subparagraphs of the bill are discussed
hereinafter.
Section 1
Paragraph (1) adds a reference to 5 U.S.C.
3143(c) in 5 U.S.C. 1305 so that the Civil
Service Commission is authorized to perform
all actions regarding hearing examiners paid
under the newly added section 3143(c) that
it has been performing with respect to hear-
ing examiners paid under the General Sched-
ule.
Paragraph (2) adds a new subsection (I)
to 5 U.S.C. 1308, "Annual reports," which re-
quires an annual stewardship report by the
Civil Service Commission to Congress on the
Federal Executive Service. This annual stew-
ardship report serves three important pur-
poses. First, it will fully inform Congress on
the operation of the Federal Executive Serv-
ice for the previous fiscal year, Second, it will
fully inform Congress as to the proposed
scope and operation of the Federal Executive
Service for the coming li ;cal year. This will
enable 'Congress to maintain an informed
and positive legislative oversight over the
Federal Fxecu tive Service Third, the detailed
and comprehensive nature of the stewardship
report required by the new subsection will
serve to inform the general public of the
actions that its Government is taking, and
proposes to take, with respect to the manage-
ment of its executive resources,
The stewardship report. is required to be
submitted before April I of each year in
order that Congress will have a full 90-day
Approved For Release 2004/12/15 : CIA-RDP74B00415R000600070040-1
 Fe,ruary 8, 1971APproved FLeoW1 fRk1L2/1&C6ifDPi7MO15R000600070040-1
period to review it before the end of the fiscal
year in which it is submitted and the start
of the next fiscal year during which the
newly proposed number of executive appoint-
ments, ratios, and executive pay average are
to be applicable.
Under the new section 1308(f) (2), the
Civil Service Commission allocations of the
number of proposed executive appointments,
the ratios of career to noncareer appoint-
ments, and the executive pay average are
effective 90 days after the submission of the
report.
Paragraph (3) 1s the "heart" of the bill.
It makes several amendments to chapter 31
of title 5, United States Code, which estab-
lish and govern the Federal Executive Serv-
ice. Paragraph (3) is divided into five sub-
paragraphs, two of.which are technical (sub-
paragraphs (A) and (B) and three of which
are substantive (subparagraphs (C), (D),
and (E). They are explained separately as
follows:
Subparagraph (A)
,Subparagraph (A) will amend the chapter
analysts of chapter 31 (some refer to it as
the "table of contents") so that it will prop-
erly reflect the content of the chapter after
the bill is enacted. As shown in the amended
chapter analysis, a new subchapter has been
added to chapter 31 of title 5, United States
Code, which contains all permanent statu-
tory provisions concerning the Federal Ex-
ecutive Service.
Subparagraph (B)
Subparagaph (B) will insert a new sub-
chapter designation for the present provi-
sions of chapter 31. This is a technical neces-
sity caused by the new division of the pres-
ent chapter into two subchapters creating a
need for a new subchapter designation cov-
ering the provisions that were in the chapter
before its amendment by the bill.
Subparagraph (C)
Subparagraph (C) would repeal 5 U.S.C.
3104 concerning the employment of specially
qualified scientific and professional person-
nel. Section 3104 is a special employment au-
thority which (together with 5 U.S.C. 5361)
authorizes the filling of the positions de-
scribed therein at GS-16, 17, and 18 of the
General Schedule. As the General Schedule
will no longer contain GS-16, 17, or 18, and
as all such positions are now authorized by
and paid under the provisions of this hill,
the section Is no longer necessary.
Subparagraph (D)
Subparagraph (D) would delete from 5
U.S.C. 3109, "Employment of experts and con-
sultants; temporary or intermittent", the
reference therein to 5 U.S.C. 5332, "The Gen-
eral Schedule", and in lieu thereof include
a reference to 5 U.S.C. 3139 which is the new
statutory pay authority for executives. This
amendment means that the rate,of pay for
experts and consultants may not exceed the
daily equivalent of the highest rate payable
to a member of the Federal Executive Serv-
ice.
Under 43 Comp. Can. 509 it was held that-
experts and consultants in the fields of phys-
icat and natural sciences, engineering, and
medicine could be paid at the rate of GS-16,
17, or 18 as there was no numerical limita-
tion on positions of those types or those
grades; whereas all other experts and consult-
ants were limited to the equivalent of the
highest rate for 0S-15. Under the new sub-
chapter II of chapter 31 of title 5 there will
be no distinctions between the types of
executives who may be appointed in the
Federal Ex ecl t,iye Service, Also,, 5 U.S.C.
5108 which contained the, language that dis-
tinguished positions in the fields of physical
and natural sciences, engineering, and medi-
cine from other positions will be repealed
by this bill. Because of the absence of these
distinctions, and In recognition of the need
to adequately pay all experts and consultants,
the pay maximum has been made the same
for all experts and consultants. Agencies
will, of course, still decide the correct pay
rate on the basis of the individual expert's
or consultant's qualifications.
Subparagraph (E)
Subparagraph (E) will add a new sub-
chapter II to chapter 31 of title 5, United
States Code. The new subchapter establishes
and provides for the administration of the
Federal Executive Service. The new subchap-
ter contains thirteen sections which are dis-
cussed separately hereinafter.
? 3131. Purpose. This section states the
purpose of the subchapter and, in addition,
the purposes of the Federal Executive Serv-
ice.
? 3132. Definitions. Paragraph (1) of
? 3132 defines "agency." The definition
covers each executive agency as defined in
5 U.S.C. 105 (except the General Accounting
Office which is excluded by ? 3132(1) (i) and
each military department as defined in 5
V.S.C. 102. The military departments are
mentioned specifically so that they may make
executive appointments Independently of the
Department of Defense just as they may now
do with regard to positions in GS-16, 17 and
18. The General Accounting Office is specifi-
cally excluded as it is the only non-execu-
tive agency included in the defined term
"executive agency" in 5 U.S.C. 105 (by rea-
son of 5 V.S.C. 104(2)). The paragraph ex-
cludes the twelve agencies named in clauses
(f) through (xii), the two offices in the
Treasury Department named in clause
(xiii), and the Federal Bureau of Investiga-
tion named in clause (xiv), as one (the Gen-
eral Accounting Office) is outside the execu-
tive branch and the others have separate per-
sonnel systems for their executive-level em-
ployees which, by reason of the unique na-
ture of their missions, are not suited for
coverage under the Federal Executive Service
and (with the exception of the United States
Postal Service and the Federal Bureau of In-
vestigation) presently have no positions al-
located in GS-16, 17, or 18.
Paragraph (2) of ? 3132 adds a definition
of the term "executive" for convenient usage
and for.the purpose of limiting the use of the
term in subchapter II of chapter 31 of title 5,
United States Code, to executives paid at a
rate that is not less than the sixth rate of
GS-15 of the General Schedule and not more
than the. rate for level V of the Executive
Schedule. These are essentially the same dol-
lar amounts that now are fixed for GS-16
through OS-18 of the General Schedule. The
definition serves as a means of excluding
from the subchapter and from the Federal
Executive Service the incumbents of the
positions specified in subparagraphs (A)
through (H) of ? 31132(2).
Subparagraphs (A) through (G) are self-
explanatory. Subparagraph (H) authorizes
the President to issue regulations which ex-
clude an employee or a group of employees
from the Federal Executive Service on any
one of three bases. An exclusion may be based
on national security interests, foreign rela-
tions, or a finding that an employee or group
of employees perform unique functions that
cannot be readily adapted to the Federal
Executive Service programs.
? 3133. The Federal Executive Service. This
section describes the make-up of the Federal
Executive Service. The Service is made up of
the executives (both career and noncareer)
whose appointments are authorized under 5
U.S:C. 3134. There are no "positions" cen-
trally established or authorized, as that term
is commonly used, In the Federal Executive
Service. After an executive is appointed in
the Service he is given an assignment by the
agency and is subject to the organization
management system of the agency in which
he is appointed.
H 531
? 3134. Authorization of executive appoint-
ments and ratios. Subsection (a) of ? 3134
requires that each agency examine its execu-
tive manpower needs and submit a written
request to the Civil Service Commission, in
accordance with regulations prescribed by
the Office of Management and Budget and
the Civil Service Commission, for authority
to appoint a specific number of executives in
the agency within the Federal Executive
Service. This request is required to be based
on the following factors:
(1) the.current level of budget and pro-
gram activity in the agency;
(2) the current level of executive staffing
in the agency;
(3) the anticipated agency program ac-
tivity and agency budget requests;
(4) pending legislation;
(5) the level of work to be done in the
agency; and
(6) such other factors as may be prescribed
from time to time by the Office of Manage-
ment and Budget and the Civil Service
Commission.
When this examination by an agency of its
manpower needs is made, the Commission
under its regulatory authority in ? 3142, will
require that the examination expressly cover
the need to continue the number of execu-
tive appointments heretofore authorized.
Subsection (b) of ? 3134 requires that each
agency shall include in the request for execu-
tive appointment authority referred to in
? 3134(a), the number of appointments re-
quested that it proposes to fill by career ap-
pointment and the number it proposes to fill
by noncareer appointment. Subsection (b)
fixes the total percentage of noncareer ap-
pointments throughout the entire Federal
Executive Service at a maximum of 25%, but
expressly authorizes the Civil Service Com-
mission to vary the ratios of career to non-
career appointments within separate agen-
cies as the differing needs of the agencies re-
quire. This means, for example, that Agency
A may have need for only a relatively few
noncareer appointees and, accordingly,
within that agency the Commission would
authorize a ratio of 90% career executives to
10% noncareer executives. On the other
hand, Agency B may have a legitimate need
for relatively more noncareer executives in
which case the Commission would authorize
a ratio for Agency B of 60% career execu-
tives to 40% noncareer executives. At the
same time that individual agency ratios are
being authorized by the Commission, the
Commission has the responsibility to ensure
that the total number of noncareer execu-
tives throughout the Federal Executive Serv-
ice does not exceed 25%.
Subsection (c) empowers the Civil Service
Commission to determine when. within each
year, the agency request for executive ap-
pointments and the ratios will be submitted
and in what form that submission will be
made. As 1308 (f) of title 5, United States
Code, requires the Commission to submit its
annual stewarship report before April 1 of
each year, the date by which the Commission
will require each agency to submit its request
will be fixed at a reasonable point before
that April 1 date to allow for the preparation
of the annual stewardship report. The Com-
mission may, if it considers it appropriate
and beneficial, require different agencies to
report at different times.
Subsection (d) requires that the Commis-
sion, after its receipt of each agency's re-
quest for a specific number of executive ap-
pointments and a ratio, review the request
and determine whether the request is justi-
fied and appropriate. In reaching its determi-
nation, the Commission will collaborate with
the Office of Management and Budget in the
Executive Office of the President. This col-
laboration recognizes the fact that executive
manpower needs flow from approved pro-
granis and budgets.
Approved For Release 2004/12/15 : CIA-RDP74B00415R000600070040-1
 Approved For. Release 2004/12/15 : CIA-RQP74B00415R000600070040-1
H582 CONGRESSIONAL RECORD--HOUSE February
Subsection (e) provides the Civil Service
Ooairnigsion with a limited authority to ad-
just, after collaboration with the Office of
Management and Budget,the number of ex-
ecutiva appointments and ratios in the Fed-
eral Executive Service when required by
emergency circumstances and needs that
were not foreseen when the annual steward-
ship retort was submitted to congress. The
statut_ y limitation on this emergency au-
thority, is that the Service may not be en-
larged more than 1 percent in a single fiscal
year. As it is contemplated that the initial
size of the Federal Executive Service will be
7,000 (approximately the current number of
GS-46, 17, and 18 and Public Law 313-type
employees), the maximum number of addi-
tioual executive appointments that the Com-
missioa could Include In the Service in one
fiscal year in an , unforeseeable emergency
would be approximately 70. Whenever any
adjustment of either the number of execu-
tide appointments or the ratios is made
under this subsection, the Commission is
required to include full information con-
concerning the adjustment in its next annual
stewar3ship report to Congress.
3135. General authority to appoint ex-
ecutives; characteristics of career and non-
career appointments. The first subsection of
?-3135 specifies that the head of the agency
in .which an executive Is to be appointed has
authority to determine whether the execu-
tive will receive a career or a noncareer ap-
pointment. The placing of this exclusive
authority with agency heads is one of the
paramount new features of the Federal Ex-
ec1kttvo Service. If a career` appointment is to
be made, the appropriate review and approval
procedures of a Qualifications Board, as con-
tained in section 3136, must be followed.
Paragraphs (1) and (2) of ? 3135(a) state
the considerations that an agency head uses
to dec. de whether a particular appointment
is to be career or noncareer. This decision
does net necessarily determine the nature of
the assignment into which the executive is
placed The decision relates solely to the type
of appointment to be made. Career appoint-
ments are for executives who are expected to
make a career in Government; they are gen-
erally equivalent to the incumbents of posi-
tions that were in the competitive service In
08-16, 17, and 19 of the General Schedule
before the establishment of the Federal Exec-
utive Service. 3loncareer appointments are
for executives in. whom management has spe-
cial,corifidence because of a personal or po-
litical relationship or because of the execu-
tive's 7rogram philosophy, This group also
includes executives with specialized skills for
short-term public projects or with only a
tempoz,ary interest in a Government assign-
ment or program. The noncareer. executives
are generally equivalent to the Incumbents
of positions that were in the excepted service
in Schedule C and noncareer executive as-
signment positions in GS-id, 17, and 18 of
the General Schedule before the establish-
ment cf the Federal Executive Service.
Subsection (b) sets forth the character-
istics of the career executive appointee. Such
an appointee is not required to serve a pro-
bationary or trial period as the recruitment
and selection procedures required for such
an appointment serve to guarantee that these
appointees? are exceptionally well qualified,
making,the principle if the probationary or
trial period inapplicable to them. Also, it is
expected that the vast majority of career ap-
pointrrents will be given to individuals who
have served considerable periods of time in
lower grade levels in the competitive service.
The career executive is, frgm the first day of
his appointment, in the competitive service
and h..s a competitive status, This means
that ha is immediately covered by the ad-
verse action procedures set out in 5 U.S.C.
7501 and 5 CF$ Part 752 by reason of the
fact that those procedures apply to an indi-
vidual "in the competitive service" (see 5
U.S.C. 7501). Paragraph (3) of subsection
(b) of ? 3135 Is included sq there will be no
doubt that a career execut ve who is a vet-
eran (i.e., a preference eligible as, defined In
? 21081(3) of title 5 of the United States
Code) is covered by the job protection provi-
sions of section 14 Of the former Veterans'
Preference Act (now subchapter II of chapter
75 and ? 7701 of title 5, United States Code)
from the first day of his career appointment
in the Federal Executive Service.
,Subsection (c) of ? 3135 contains the char-
acteristics of the noncareer ;executive. Such a
noncareer appointment does not place the
appointee in the competitive service nor does
it entitle him to a competitive status. The
noncareer executive has no; fixed tenure and
he "serves at the will of the appointing au-
thority". The. quoted words are identical to
those which appear in 5 U.$.C. 3323(b) rela-
tive to a reemployed annuitant. By reason
of the inclusion of these words In ? 3135(c),
a preference eligible executive serving under
a noncareer appointment is not entitled to
the job protection benefits; of section 14 of
the former Veterans' Preference Act (now
principally in 5 U.S.C. 7512 and 7701) re-
gardless of how long he has served in such
an appointment. By the same token, a non-
veteran noncareer executive has no job-pro-
tection benefits. The decision to effect the
separation of a noncareer executive (veteran
or nonveteran) is exclusively that of the
agency head. The reasons pr bases for the
agency head's decision are not reviewable by
the Civil Service Commission or any other
administrative authority, except when the
separated noncareer executive contends that
the separation was based on discrimination
because of his "race, color, religion, sex, or
national origin" in violation of the policy of
the United States expressed, in 5 U.S.C, 7151,
or his "marital status" or "physical handi-
cap" as referred to in 5 U.S.C. 7151 and 7153.
An allegation of politic-all discrimination,
e.g., that the separation f the noncareer
executive was based on political reasons, does
not afford a basis for the Commission or any
administrative authority to!,review the sepa-
ration action taken by the head of the
agency.
The noncareer executive; does not serve
under an employment agreement of any type
and he has no continued employment guar-
antee. This means that the head of the
agency in which the noncareer executive is
employed may increase or decrease the non-
career executive's pay at will: and without ad-
vancing any reason so long as the pay re-
mains within the limits set out in 5 U.S.C.
3139. In addition, the absence of a continued
employment guarantee means that regardless
of how long a noncareer executive serves in
such an appointment, or series of them, he
is not entitled, when separated, to placement
elsewhere in the agency or, in the Goverr.-
rnent service, and he is not, entitled to sev-
erance pay under 5 U.S.C- 5595. (The incum-
bents or these positions will be excluded from
severance pay entitlement by the Civil Serv-
ice regulations issued under 6595 just as thor.e
regulations now exclude positions filled by
noncareer executive assignment and posi-
tions in Schedule C, see 5 CPR550.701(b) (8)
revised as of January 1, 1970.) It should also
be noted that regardless of how long an ex-
ecutive serves under a noncareer appoint-
ment, or series of them, he, is not entitled,
if reduced in pay, to saved pay under 5 U.S.C.
5337 as he is not (as required by ? 5337(a)
(1)) "reduced in grade from a grade of the
General Schedule."
3136. Career appointments; Subsection (a)
of ? 3136 governs the recruitment and selec-
tion of candidates for career appointments in
the Federal Executive Service. The high cali-
ber of these candidates is assured by the dual
requirements, in paragraphs; (1) and (2) of
3136(a). The recruiting program is required
to reach all sectors (private: as well as gov-
ernmental) and must evidence that the best
8, 1 q '1
talent available was considered. For the pur-
pose of section 3136 the term "outside the
civil service" includes, in addition to the pri-
vate sector, State and territorial govern-
ments, any political subdivision of either a
State or territorial government, and the gov-
ernment of the District of Columbia. Sub-
section (a) of ? 3136 requires the Civil Serv-
ice Commission to assist every agency in its
recruiting and selecting activities. The Com-
mission's assistance is to assure that the
agency has before it for its consideration and
selection the best talent available after a
broad-base recruitment effort. The Commis-
sion will make full use of its Executive In-
ventory and all other Commission resources
in aiding agencies under subsection (a) of
? 3136.
Subsection (b) of s 3136 requires each
agency which selects a candidate for career
executive appointment to submit documenta-
tion that establishes his qualifications, and
which shows the nature of the recruitment
effort made, to a Qualifications Board. Ex-
cept as provided in subsection (d) of ? 3136,
which is discussed subsequently herein, an
agency may not make a career appointment
to a position in the Federal Executive Service
without the prior approval of a Qualifica-
tions Board.
Subsection (c) of ? 3136 requires that an
employment agreement be entered into be-
tween the employing agency and the candi-
date approved by a Qualifications Board be-
fore a career appointment to a position In
the Federal Executive Service may be ef-
fected.
Subsection (d) of ? 3136 authorizes career
appointments in the Federal Executive Serv-
ice without the approval of a Qualifications
Board under two conditions. The first con-
dition Is when the appointment Is by trans-
fer from one career appointment in the Fed-
eral Executive Service to another career ap-
pointment in the Service. The second con-
dition is when the appointment is by a re-
newal employment agreement entered into
not later than 1 year after the executive's
separation from, or the expiration of, r, pre-
vious employment agreement. The 1 year
limitation is to assure that the former ex-
ecutive's qualifications are current. If he is
out of the Federal Executive Service for
more than 1 year, his current qualifications
must be evaluated again by a Qualifications
Board.
? 3137. Employment agreements. Subsection
(a) provides for two types of employment
agreements. The first employment agreement
entered into by an exe-utive is the initial
employment agreement and each employ-
ment agreement entered into thereafter by
that executive is a renewal employment
agreement.
Subsection (b) of ? 3137 fixes the employ-
ment period for an initial employment agree-
ment at 3 years, except when the executive
covered under the agreement is required to
be separated sooner than 3 veers by opera-
tion of the mandatory separation provision
of the retirement statute. That statute, 5
U.S.C. 8335, requires the separation of an
employee who becomes 70 years of age and
who has completed 15 years of service, pro-
vided he served under the retirement system
for at least 1 year within the 2 years imme-
diately preceding his separation (5 U.S.C.
8331(b)). An executive separated because
of age may be reappointed under a renewal
employment agreement, but if this is done
he serves at the will of the appointing au-
thority by reason of 5 U B.C. 3328(b).
Subsection (c) of ? 3137 fixes the employ-
ment period for a renewal employment agree-
ment at 3 years unless his separation in less
than 3 years is required by operation of 5
U.S.C. 8335. However, when a renewal em-
ployment agreement is made by reason of a
transfer from an initial employment agree-
ment, the employment period may run only
to the date the initial employment agreement
would have ended.
Approved For Release 2004/12/15 : CIA-RDP74B00415R000600070040-1
 Feiruar~ 8, 191'-proved Fob&O&MJ48111 EEfN744gj5R000600070040-1
H 533
Subsection (d) of ? 3137 sets out 6 spe- agency separates an executive for failing to tines it employs is the statutory prohibition
ciflc provisions obligating an agency with move geographically, such a separation would which prevents the average pay of all execu-
respect to every employment agreement (ini- not entitle the separated executive to either tives within the agency exceeding the execu-
tial or renewal), Paragraph (1) requires that severance pay under 5 U.S.C. 5595 or a dis- tive pay average established by the Civil
an agency shall not assign an executive to continued service annuity under 5 U.S.C. Service Commission -after collaboration with
duties and responsibilities that are not truly 8336(d). Subsection (e) also requires the ex- the Office of Management and Budget. The
of an executive caliber. For example, an ecutive to agree to participate in those train- executive pay average cannot be exceeded
agency could not assign an executive to du- ing and career development activities which by an agency except when the Civil Service
ties properly classifiable at grade GS-15 or his agency decides will enhance his individ- Commision determines that special execu-
below of the General Schedule, ual proficiency as an executive and will pro- tive staffing circumstances within a particu-
Paragraph (2) obligates the agency to mote the agency's program needs. lar agency justify a higher average pay for
provide the executive with training and ? 3138. Qualifications Boards. Subsection that particular agency. Provision is made for
career development -opportunities. These (a) of ? 3138 requires the Civil Service Com- automatic pay increases for executives when-
have the dual purpose of enhancing the in- mission to establish Qualifications Boards as ever there is an increase in the sixth rate
dividual professional and managerial de- the agents of the Commission which will of GS-15 as long as the increase does not
velopment of the executive and promoting review the qualifications of candidates for exceed the executive-pay ceiling set out in
the program needs of the agency. career appointments in the Federal Executive the section.
Paragraph (3) bars an agency from re- Service, to determine that the candidate an ? 3140 Continued employment guarantees;
ducing the pay of a career executive during agency has selected for appointment is among separation benefits. Each subsection of ? 3140
a period of continuous service in the Fed- the most highly qualified of the candidates spells out the particular employment guar-
eral Executive Service. This means that a considered. The Board, in each case, in addi- antees and separation benefits applicable to
career executive's initial rate of pay may tion to reviewing the qualifications of the the different situations that may arise When
not be decreased during his continuous serv- candidates, will review the agency's recruit- a career executive's employment agreement
ice in the Federal Executive Service, and if ment effort to make certain that it encom- (either an initial employment agreement
an agency increases an executive's pay dur- passed the full, broad-base coverage required or a renewal employment agreement) ex-
ing his employment period he must continue by the newly added ? 3136 (a) of title 5, pires.
to be paid at that higher rate of pay for the United States Code. If a Qualifications Board Subsection (a) covers the situation in
remainder of his continuous service in the finds that the recruitment effort was not suf- which an executive has 30 years of service
Federal Executive Service. ficient, or that the candidate is not among creditable for retirement purposes under 5
Paragraph (4) prevents an agency from the most highly qualified, it will not approve U.S.C. 8332 at the time of the expiration of
separating an executive during an employ- the selection made by the agency and the his employment agreement. In that situa-
ment period except for "cause" or when the agency will have to extend its recruiting ef- tion the agency may, at its election, separate
Civil Service Commission finds that because fort, select another candidate, or present ad- the executive from the service without mak-
of physical disability he is not able to per- ditional evidence to the Board supporting its ing him an offer of a continuing position in
form useful and efficient service in the ex- selection. GS-15 as explained in the comment relative
ecutive position. A separation for "cause" Under subsection (b) of ? 3138 the Com- to subsection (b) of this ? 3140. Such a
is, generally, a separation due to delin- mission may establish different Qualifica- separation is an involuntary separation for
quency or misconduct. The term used, "for tions Boards for different programs, profes- the purposes of 5 U.S.C. 8336(d) and the
such cause as will promote the efficiency of sions, and executive occupations. For exam- executive so separated is entitled to an an-
the service" comes from 5 U.S.C. 7501 and ple, a Board made up of managers or execu- nuity under that subsection or any other
7512 which relate to adverse actions taken tives from both Government and the private subsection of 5 U.S.C. 8338 is otherwise
against employees in the competitive service sector, while qualified to pass on the quali- eligible.
and preference eligible employees (veterans fications for a candidate for a career execu- Subsection (b) covers the situation in
for example). No other separations of ex- tive appointment whose experience and back- which the employment agreement expires
ecutives during the employment period are ground is in management, would not have and the agency either does not offer the
permitted. the necessary expertise to pass on the qual- career executive a renewal employment agree-
Paragraph (5) specifies that an executive is ifications of a candidate whose experience ment or makes such an offer but the exec-
free to leave .his current executive appoint- and background is in one of the sciences utive elects not to enter into the renewal
ment at any time by resignation, transfer (e.g., medicine, physics, mathematics). Sep- employment agreement and (in the case of
to other employment either within or out- arate Boards-composed of specialists in sep- an executive with 30 years of service) the
side the Federal Executive Service, or by arate fields-are essential to assure a truly executive is not separated under subsection
retirement either for disability or by optional informed review of each candidate's quali- (a) of this ? 3140. In this situation, the
retirement, fications. agency is obligated to offer the career execu-
Paragraph (6) obligates the agency, when The Commission is responsible for appoint- tive continued employment in a GS-15 posi-
the employment agreement for an executive ing as members of each Qualifications tion in the competitive service in the agency.
expires, to either continue him in the Fed- Board individuals who are established to be The offer must be to a continuing position
eral Executive Service under a renewal em- experts in their field and are recognized as which means one that there is reasonable
ployment agreement, place him in a GS-15 such by their colleagues. Board members who cause to believe will last indefinitely. An
position in the competitive service with saved are employees of executive agencies (other offer to place the executive in what is known
pay for 2 years as required by 5 U.S.C. 3140 than the Civil Service Commission) may to be a temporary jpb or one that is known
3'0)y ars of service) separate him forletire U.S.C. 686. Board members employed by the the statutory lr qui ement durationin ? 3140(b).1 In
ment purposes under 5 U.S.C. 3140(a). government of the District of Columbia may addition, as will be spelled out in the regula-
Subsection (e) of ? 3137 requires that each also serve on a reimbursable detail with sub- tions of the Civil Service Commission au-
employment agreement shall require the ex- section (b) of ? 3138 constituting the spe- thorized by ? 3142, the Commission will re-
ecutive to agree that he will accept any as- ciflc authority for that reimbursement. All quire that the offer of the GS-15 position be
signment of duties. that is a bona fide execu- other Board members are appointed as ex- made at such a time in advance of the ex-
tive assignment. Such an assignment may be ports or consultants under 5 U.S.C. 3109 and piration of the employment agreement that
at any geographical location selected by the their pay is fixed by the Civil Service Com- the executive has a reasonable opportunity
agency and the executive must agree to go mission at a daily equivalent that does not, to consider the offer (e.g., the nature of the
to whatever location the. agency selects. An exceed the maximum payable to an executive position offered, the work surroundings in-
agency's failure to give an executive a proper under newly established -5 U.S.C. 3189. cluding the geographical location, and all
executive assignment is cause for an appeal ? 3139. Pay. There are no "positions" in the other facets one takes into consideration in
to the Civil Service Commission under the Federal Executive Service and, accordingly, deciding whether to accept an offer of per-
newly created 5 U.S.C. 7702. An executive's - no "class" or "class of positions" as those manent employment) and so that he may
failure to accept a valid executive assignment terms are used with regard to positions cov- enter on duty in the GS-15 position without
at a different geographical location is cause ered by the General Schedule. The pay of a a break in service.
for the agency to separate the executive. member of the Federal Executive Service is Note that the offer of the GS-15 position
However, in the event that a geographical fixed by the agency in which is he employed. to the executive must not cause the dis-
move would entail undue hardship, by mu- The agency has the authority to fix an execu- placement or reduction in grade of any
tuai agreement the executive may be placed tive's pay at any rate it selects within the agency employee already serving in GS-15.
in a position at grade GS-15 or below with minimum and maximum rates established Subsection (c) of ? 3140 deals with the
2 years salary saving, or he may be separated by ? 3139 (a) so long as the pay of all execu- placement of the executive in the proper
and receive severance pay or discontinued tives in the agency does not exceed the execu- rate and step of GS-15 when he accepts the
service. annuity. If the executive and the tive pay average explained hereinafter. An offer of such a position made under subsec-
agency cannot agree that a hardship exists, executive's pay is based on such factors as tion (b). Paragraph (1) assures that the
the executive may appeal to the Civil Service his value to the agency, his duties and re- executive will, at the minimum, have his
Commission whose decision will be binding. sponsibilities in the assignment given him Federal Executive Service pay rate saved for
Regulations will be issued by the Civil Serv- by the agency, and his job performance. The 2 years from the date he enters on duty in
ice Commission to carry out this provision. only restriction on the agency's general au- the GS-15 position. He may, however, by
In the absence of a hardship situation, if the thority to fix the pay of the individual execu- reason of the required-service-credit benefit
Approved For Release 2004/12/15 : CIA-RDP74B00415R000600070040-1
 Approved For Release 2004/12/15 : CIA-RDP74B00415R000600070040-1
H 534 CONGRESSIONAL RECORD -HOUSE February 8, 1971
in paragraph (1) be entitled to a higher rate subsection (e) makes clear that the execu- ment or the agency advice and assistance
_.. .- _ . __
.... ,. ..___
+r+, , to either ? A1_-+1'--1 which may include the use of one or more
Is n
he
'
s Qu:inncatiuns Boards
receiving Immediately before his career exec- service annuity or to severance pay. of the commission
utive employment agreement expired. For ? 3141. Report to Congress. ? 3141 supple- and the Executive Inventory maintained by
example, assume that before the executive meats the new 5 U.B.C. 1308(1) which re- the Commission. As some nonexecutive
entered the Federal Executive Service he was quires an annual stewardship report to Con- branch agencies have only a small number
in the 5th step of 01 5-45 being paid $27,483 gress on the Federal Executive Service. As of executives, the use of the Qualifications
per annum and he had been in that step expressly provided in the last sentence of this Boards established by the Civil Service Com-
for52 :alendar weeks. Under_5 U.S.C. 5335 section-and as specified in 5 U.S.C. 1308(f) mission is intended to provide a prompt and
(a) (2) and (3) the waiting period for a step (2)-the authorized number of appoint- economical means of assuring that high
increase from steps 5 and 6 is 104 calendar meats, ratios and executive pay average be- quality executive candidates are selected for
weeks and from, step 7 it is 156 calendar come effective 90 days after the stewardship appointment under the regulatory program.
weeks. The executive accepts an appointment report to Congress. Subsection (c) will constitute the pay au-
in the Federal Executive Service at $29,000 ?3142. Regulations: This section author- thority for hearing examiners appointed un-
and be remains in the Service for 6 years izes the Civil Service Commission to pre- der ? 3105 of title 5, United States Code, who
with t},e same pay throughout his career In scribe regulations necessary to carry out the are not paid under the General Schedule.
the Service. When his employment agree- purposes of subchapter II of chapter 31 of Hearing examiners will continue to be paid
ment expires he is entitled to count both his title 5, United States Code, except ? 3143. under this subsection just as they are paid
previous service in OB-15 not previously used Section 3143 is excepted from the general at the present time bur, as there will no
for step increase purposes (which means the regulatory authority of the Commission as longer be any GS-16 or 03-17 grade in the
52 cale.ular weeks he had to his credit when portions of that section cover agencies in the General Schedule this subsection is neces-
he left that grade) and his 8 years' service judicial and legislative branches as well as sary to provide a pay authority.
(312 calendar weeks) in the Federal Execu- agencies in the executive bt'anch. It is not Paragraph (1) of subsection (c) Is essen-
tive Service toward the waiting period in considered appropriate for a personnel-sys- tially the same as 5 U.S.C. 5362, the author-
GB-15. Therefore, the returned, former exec- tem regulatory provision, such as this section ity under which the Civil Service Commis-
utive would be credited, first, with the 104 is, to extend to judicial and legislative ?agen- Sion fixes the pay of hearing examiners who
calendar weeks to take him from step 5 to cies when it is evident that with regard to are paid under the General Schedule. Under
step 6; then with the 104 calendar weeks to the subject matter here covered the full. con- paragraph (1) the Commission, rather than
take him from step 6 to step 7; and then trol of such nonexecutive agencies properly the agency employing the hearing examiner,
with the remaining 156 weeks which would belongs outside the executive branch. will continue to fix the pay of hearing exam-
take him from step 7 to step S. Thus, he ? 3143. Executive management outside the iners "independently of agency recommenda-
would return to grade GB-i3 at step 8 with Federal Executive Service. The government tions or ratings".
a pay rate of $29,907 which is higher than his of the District of Columbia and each agency Paragraph (2) of subsection (c) places the
rate in the Federal Executive Service imme- in the judicial or legislative branch in which same minimum and maximum limits on the
diately before his employment agreement there are positions the basic pay for which Commission's pay authority in paragraph
expires.: is at an annual rate that is not less than the (1) of subsection (c) as are placed on mem-
The former executive will be entitled under sixth rate of GS-15 nor more than the rate bers of the Federal Executive Service by the
? 3140(c) (1) to the saved pay for 2 years so for level V of the Executive Schedule and new ? 3139. At present under the General
long as he meets the conditions in subpara- which are not paid under either the General Schedule, no hearing examiner is In GS-18
graphs (A) and (B), and (C) of paragraph Schedule nor under the Executive Schedule but it is possible that the duties and respon-
(1) of that subsection which are identical to but, instead, under a regulatory counterpart sibilities of a hearing examiner could at some
those in the regular pay saving section, 5 to the new section 3139 which would be in future time justify the Commission in fix-
U.S.C. 5337. effect by reason of section .8(b) of the Act ing the pay of a hearing examiner as high
Under $ 3140(c) (2), when the period of (the approximate pay range of GS--16 as the present GS--18 rate. The new para-
saved pay ends the former executive has the through GS-18 of the General Schedule in graph (21 would permit pay at that rate if
right to be placed in the step of GS-15 that effect immediately before the enactment of warranted.
he would have been in had his service in the this bill) are required, by subsection (a) of Paragraph (3) of subsection (c) supplies
Federal Executive Service been in that grade, $ 3143, to issue regulations which, to the the Civil Service Commission with the au-
plus fall `credit for any previous service he maximum extent possible, adopt for that thority necessary to enable it to create a
may have had in that grade which he has government and those agencies a program for regulatory pay system for hearing examiners
not already used for step increase purposes. executive recruitment, selection, employ- that is like the one in existence today under
This provision is needed for those former ment, and subsequent placement that is like the General Schedule.
executives who, under ? 3140(c) (1), re- the statutory Federal Executive Service pro- Subparagraph (A) of paragraph (3) will
tained their last executive pay rate during gram. Under this requirement the govern- require the Commission to establish the
the two-year period of saved pay. merit of the District of Columbia and each grades of difficulty for hearing examiner posi-
Subparagraph (3) of ? 3140(c) is needed agency would make a recruitment effort for tions. This means that the Commission, fol-
by reason of the fact that members of the career executive candidates like that required lowing the principles in 5 U.S.C. 5101 (equal
Federal Executive Service are not rated on for candidates for career appointment in the pay for substantially equal work; pay varla-
acceptable level of competence but such a Federal Executive Service. The government tions in proportion to substantial differences
determination Is needed for normal step in- and the agency would fix an authorized num- in work responsibility, qualification, require-
crease purposes when the former executive her of executive appointments, the ratio of ments, and the hearing examiner's contribu-
enters the GS-15 position. Also, in order to career to noncareer appointments, the pay for tion to the efficiency and economy of the
prevent any misunderstanding over the effect executives, and the continued employment service) will prepare and publish in its regu-
in a pay increase the executive may have re- guarantees and separation ; benefits all in a lations the bases for grading hearing exam-
ceived in the Federal Executive Service, such like manner to that required by the statute finer positions. These are needed since the
an increase is deemed not to have been an for the Federal Executive Service. The gov- bases for grading GS-1 S, 17, and 18 of the
equivalent increase" for periodic step in- ernment or an agency could not pay one of General Schedule (5 U S.C. 5104(16), (17),
crease purposes (5 U.S.C. 5335 (a,i (A) ) . These its executives more or less than the pay rate and (18) will be repealed by the enactment
are technical provisions needed to prevent specified in the new 5 U.S.C. 3139; and the of the bill. The bases for the hearing exam-
any delay in the former executive's attaining ratio of career to noncareer executive ap- iner pay rates will be like the present bases
the stop in GS-15 to which ? 3140 is intended pointments could not be less than a ratio for GS-16, 17, and 18 modified as appropriate
to entitle him. authorized in or under 5 U.S.C. 3134(b). for the duties and responsibilities of hear-
Subsection (d) of 3140 covers the aftua- The government of the District of Colum- ing examiners. No hearing examiner will be
tion in which an agency does not offer an bia and each judicial and legislative agency increased or decreased in pay by reason of
executive a renewal employment agreement (including the General Accounting Office) the bases which the Commission will pre-
and the executive declines the agency's of- having a regulatory program under ? 3143(a) scribe under this subparagraph.
fee of a position iri_Wf -15. When that occurs, would be required under this section to sub- Subparagraph (B) of paragraph (3) re-
the executive Is entitled to either a discon- mit a stewardship report to Congress (like quires the Civil Service Commission to in-
tinuedservice annuity or severance pay pro-- that required of the Civil Service Commis- elude in the regulations that control the pay
vided he meets the regular requirements for Sion by the new 5 U.S.C. 1308(f) (2)) for the of hearing examiners not paid under the
either of those benefits. In order to make this purpose of authorizing the number of execu- General Schedule provisions that will govern
entitlement clear, paragraphs (1) and (2) tive appointments, the ratios of career to the rate for new appointments, the rate on
specify that the separation of an executive noncareer appointments, and the executive change in position or +tvpe of appointment,
in this situation is "'involuntary pay average for the coming fiscal year. periodic increases in pay, and pay saving. As
Subsection (e) of ? 3,140 applies to the Subsection (b) of ? 3143; requires the Civil required by the subparagraph, these regula-
situation in which the agency offers the ex- Service Commission, at the request or the tory provisions must be consistent with the
ecutive a renewal employment agreement government of the District: of Columbia or a present provisions in the sections of title 5
which he declines; then the agency offers judicial or legislative branch agency having of the United States Code cited in the sub-
him a competitive service continuing position a regulatory program of executive manage- paragraph. This will assure that even though
at GEE-115 which he declines. In such a case, ment under ? 3143(a), to give that govern- those statutory provisions are no longer ap-
Approved For Release 2004/12/15 : CIA-RDP74B00415R000600070040-1
 February 8, 1973proved FoCaloS?@P# M1ktq.-7 Ml5R000600070040-1
H 535
.placable to hearing examiners paid under this cable to the Federal Executive service pro- these executives from the performance rating
? 3143(c), they will continue to have all the gram. provisions of chapter 42. This exclusion is
benefits of those statutory job classification ? 3316. The only means of entry into the based on the fact that a uniform performance
and pay-rate-fixing provisions. Federal Executive Service are those specified rating system for executives would not be in
Subsection (d) of ? 3143-while not man- in subchapter II of chapter 31 of title 5, keeping with the basic concepts of the Fed-
datory-urges or encourages the agencies ex- United States Code, This means that "rein- eral Executive Service program, Each agency
empted from subchapter II of chapter 31 of statement", as that term is used with re- will have to establish effective and tailor-
title 5, United States Code, to adopt as many spect to other competitive service appoint- made processes to determine the quality of
features of the Federal Executive Service ments, is not applicable to the Federal Ex- the performance of its executives. If an ex-
program as can be used by such an exempted ecutive Service. ecutive's fob performance is poor he will be
agency. In addition, under this subsection, if ?? 3317 and 3318. Since these sections ap- removed for inefficiency. If his performance
an exempted agency needs assistance from ply to the certification and selection for is adequate but not up to the high level ex-
the Civil Service Commission (such as the competitive appointment from registers, and pected his employment agreement will not
use of a Qualifications Board or the Com- since no registers are established under the be renewed. If his performance is of a high
mission's Executive Inventory), the agency Federal Executive Service qualification-re- quality his pay may be raised. An executive
is entitled to request and receive that as- view process, these sections would not be ap- cannot be involved in a reduction in force,
sistance. propriate for the Federal Executive Service therefore, there is no need to rate him for
This subsection (d) of section 3143 is the program. the purposes of 5 U.S.C. 3502(a) (4) which
last provision in the newly added subchapter ? 3320. The Federal Executive Service does refers to the use of "efficiency or performance
II of chapter 31 of title 5, United States not include the government of the District ratings" as a reduction-in-force retention
Code. of Columbia and, accordingly, 5 U.S.C. 3320 factor.
Paragraph (4) makes necessary amend- has no applicabiilty to the Service. Paragraph (6) makes amendments to chap-
ments to chapter 33 of title 5, United States ?3321. As explained hereinbefore, there is ter 51 ("Classification") of title 5, United
Code, to enable the Federal Executive Serv- no probationary period, for executives se- States Code, to accommodate the new Fed-
ice program to operate. , lected for appointment in the Federal Ex- eral Executive Service program.
Subparagraph (A) makes a significant ecutive Service. Because of that fact, this Subparagraph (A) of paragraph (8) will
amendment to ? 3302 which will enable the section (5 U.S.C. 3321) would have no ap- amend 5 U.S.C. 5102(c) (25) to delete the
President to include in the Civil Service plicability to the Federal Executive Service. reference to GS-18 (as that grade is deleted
Rules (Title 5, Code of Federal Regulations, ? 3322. Career appointments in the Federal from the General Schedule by this bill) and
Chapter I, Subchapter A) exceptions from Executive Service are made under employ- to insert in lieu thereof a reference to grade
several specified sections of title 5, United ment agreements of 3 years' duration. As the GS-15 (the new maximum grade in the Gen-
States Code, necessary for the operation of concept of temporary, indefinite, or Ferman- eral Schedule). The words "by a statute oth-
the Federal Executive Service. The need for ent employment in a particular position is er than this chapter" are used instead of "by
the excepting authority for each section of inconsistent with the use of employment other statute" for better precision and clar-
title 5 referred to in the newly added ? 3302 agreements under the Federal Executive ity.
251. explained ae allows: Executive Service pro- applicability program, . the 5 U.S.C. 3322,has no proper Subparagraph (B) (i) of paragraph (6)
(3) is
will amend 5 U.S.C. 5the by will be nl be n the ref-
gram has its own specific reporting require- ? 3341. This section which controls "de- erence to S
18 OS- ment (5 U.S.C. 1308(f) ), hence, there is no tails" within an Executive department, or a in tGeneral eral (e there wilo enactment
need for 5 U.S.C. 2951 to apply to it; military department would not be applicable of this the Act) Schedule after the enactng a
?? 3304 and 3305. The Federal Executive to members of the Federal Executive Serv- reference nd, 5 he thereof, ter enact-
Service a
Service Program has a review-of-qualifiea- ice for two reasons. First, members of the reto GS-15 which win-after nact-
tions procedure designed specifically for ex- Federal Executive Service do not Occupy Schedule.
ecutive procurement and selection. There- "positions" as that term is used for other
fore, the competitive-examination require- civil service purposes and a detail is made Subparagraph (B) (ii) of paragraph (6)
ments in these sections would not be appli- between different positions. Second, members will repeal paragraphs (16), (17), and (18)
cable to the program; of the Federal Executive Service are required of 5 U.S.C. 5104. These three paragraphs de-
? 3306. Apportionment is not applicable to to agree to accept any proper assignment of scribe the classes of positions the duties of
promotion actions. Since the majority of duties and responsibilities which would make which warranted placement of be a position in
appointees to the career executives group 5 U.S.C. 3341 meaningless to those executives. GS-16, 17, or 18. As there will be no General
will come from employees already in the ? 3381. "Promotion", to which 5 U.S.C. Schedule grades at GS-16, 17, and 18, these
competitive service to whom apportionment 3381 relates, is a change of an employee from statutory position-description provisions are
does not apply in a consideration for promo- a lower graded position to a higher graded no longer necessary.
tion, it would not be appropriate to apply it position (see 5 CFR 210.102(b) (11) ). As Subparagraph (C) of paragraph (6) will
to the small number of persons selected from members of the Federal Executive Service do repeal 5 U.S.C. 5108, the basic statutory pro-
outside; not occupy positions, 5 U.S.C. 3381 would vision governing the classification of posi-
? 3308. The prohibition against minimum be inapplicable to them. Moreover, as pro- tions at GS-16, 17, and 18. Section 5108 is no
educational requirements would not be ap- vided in 5 U.S.C. 3139, the pay of an execu- longer necessary because there will be no
propriate to the professional types of assign- tive is not based on "position" but on other General Schedule grades GS-16, 17, and 18
ments given members of the Federal Execu- statutory factors which make the promotion- after the bill is enacted, and there will
tive Service and, hence, 5 U.S.C. 3308 should examination concept in 5 U.S.C. 3361 not-rel- be no need to fix and distribute numbers of
not be applicable; evant to the Service. positions at grades GS-16, 17, and 18 as the
? 3309. Candidates for the Federal Execu- Subparagraphs (B) and (C) will repeal Federal Executive Service program will sup-
tive Service, are not, "graded" in the usual sections 3324 and 3325 of title 5, United ply a better and more efficient basis for creat-
sense of competitive civil service examina- States Code (and amend the analysis of ing executive-level appointment authorities.
tions, accordingly, it is not possible to give chapter 33 of that title to evidence their re- Subparagraph (D) of paragraph (6) will
additional "points" for veteran's preference peal). These sections are repealed as there repeal that part of 5 U.S.C. 5109 which was
in the selection and review process estab- will no longer be any positions in GS-16, 17, a statutory pay fixing authority for the GS-
lished for the Federal Executive Service pro- or 18 by reason of.the amendment of the 18 position of the Director of the Bureau of
gram. This is especially so since the majority General Schedule by this bill, and because 5 Retirement, Insurance, and Occupational
of appointees to the career executive group U.S.C. 3104 (to which ? 3325 refers) will be Health of the Civil Service Commission. That
will come from those already in the com- repealed by this bill as explained hereinbe- position will be covered under the Federal
petitive service and who presently do not fore. The repeal of these two seotions, which Executive Service.
receive veterans' preference points for pro- have been referred to as special "super- Subparagraph (E) of paragraph (8) will
motion consideration, grade" authorities, is part of the statutory repeal 5 U.S.C. 5114 which required the Civil
? 3311. All experience that a candidate has plan, which will be accomplished by this Service Commission and other agency au-
which relates to his qualifications for ap- bill, to abolish all special authorities to fill thorities to make reports to Congress on posi-
pofntment as an executive will be reviewed, these executive-type positions and concen- tions in grades GS-16, 17, and 18. The sec-
including any military or nonpaid experl- trate the authorities and the controls under tiou is unnecessary both by reason of the
ence, and used to determine if he is one of this legislation. The accomplishment of this fact that the General Schedule will no longer
the most highly qualified candidates con- plan will significantly simplify executive include GS-16, 17, and 18, but also by reason
sidered. Thus, there is no need for 5 U.S.C, management control within government. of the fact that Congress will be fully in-
3311. Paragraph (5) amends the definition sec- formed as to the operation of the Federal
? 3313-3315a. Since the usual' type of civil tion of chapter 42 of title 5, United States Executive Service under 5 U.S.C. 1308(f) and
service competitive examinations are not Code, relative to "Performance Rating" to under 5 U.S.C. 3143(a) by the new provisions
sided to determine the qualifications for can- exclude from that chapter members of the in subchapter II of chapter 31 of the United
didates for the Federal Executive Service Federal Executive Service and employees States Code.
there are no "registers" or "employment under an agency program of executive Subparagraph (F) of paragraph (6) will
lists" for such candidates and therefore management (a regulatory program under 5 amend the analysis of chapter 51 of title 5,
these sections of title 5 would not be appl- U.S.C. 3143.(a)). This amendment will exclude United States Code, to show that sections
Approved For Release 2004/12/15 : CIA-RDP74B00415R000600070040-1
 H 536
Subparagraph (G) of paragraph (6) will
amend :section 5115 by deleting the reference
therein tosectoh 5114 of title 5, United
States Code, which will be repealed by sec-
tion 1(6) (E) of the bill.
Paragraph (7) makes several amendments
to ohap;e 53 ("Pay Rates and .Systems") of
title 5, United States Code, needed by reason
of the creation of the Federal Executive
Service.
Subpc:ragraph (A) of paragraph (7) will
amend 5 U.S.C. 5304 ("Presidential policies
and regulations") to Include therein a ref-
erence to subchapter II of chapter 31 of title
5 of the United States Code (the subchapter
governing the Federal Executive Service).
This araendment will include the Federal
Executive Service among the pay authorities
which the President considers in fixing
policies and regulations relating to such
matters as pay comparability with private
enterprise the adequacy of Federal statutory
pay structures, and the relationship of Fed-
eral statutory pay rates and private enter-
prise pay rates.
Subparagraph (B) of paragraph (7) will
amend the General Schedule set out in 5
U.S,C. 5382 by repealing all references therein
to GS-1,6, 17, and 18 and the annual rates
for those grades. By reason of the creation of
the Federal Executive Service by this Act-
and the other statutory pay fixing provi-
sions of this Act-there is no need for grades
G$-16, 17, and 18 in the General Schedule.
Subparagraph (C) of paragraph (7) will
repeal I. U.S.C. 5361 which was a special pay
fixing e.uthority`,for the scientific and pro-
fessionai positions established under 5 U.S.C.
31,04 (5 U.S.C. 3104 will also be repealed by
this biil.as explained hereinbefore). Because
of the new Federal Executive Service pro-
gram-there Is no need for special pay fixing
provisions such as 5 U.S;C. 5361 as the posi-
tions covered by that section will either be
in the Federal Executive Service or under an
agency program of executive management
after the enactment of the bill.
Subparagraph (D) of paragraph (7) will
amend 5 U.S.C. 5362 so that it applies only
to hearing examiner positions that are paid
under the General Schedule. The majority of
hearing examiners appointed under 5 U.S.C.
3105 are in grades higher than G$--15 and,
after the enactment of this bill, those higher
paid hearing examiners will have their pay
fixed by the Civil Service Commission under
newly added 5 Ui.C. 3143(c) making 5
U5S.C. 5382 applicable only to hearing exami-
ners in General Schedule positions.
Subparagraph (E) of paragraph (7) will
amend b U.S.C. 5363 by deleting the refer-
ence therein to GS-18 and Inserting in lieu
thereof a reference to the maximum rate
payable under newly added 5 U.S.C. 3139.
This is a technical amendment needed by
reason of the repeal of the GS-18 grade and
pay rate;
Subparagraph (F) of paragraph (7) will
amend 5 U.S.C. 5364 to include therein a ref-
erence to the maximum rate of pay payable
under the Federal, Executive Service pro-
gram. This amendment is required because
of the :-epeal of those provisions in the Gen-
eral Sc=nedule that related to GS-16, 17, and
1$. That repeal would leave this section 11-
complete which makes. it ess sitial to sup-
plement it by the inclusion therein of the
reference to the maximum Federal Executive
Service pay rate,
Subparagraph (G) of paragraph (7) will
amend the analysis of chapter 53 of title 5,
United States Code, to show the repeal of 5
U.S.C. 8361.
Paragraph (8) will amend 5 U.S.C. 5595(a)
(2) relative to serverance pay to delete an
obsolete reference to GS-18 and, in lieu
thereof, -include a reference to the maximum
rate payable under newly added 5 U.S.C.
Approved For Release 2004/12/15 : CIA-RI)P74B00415R000600070040-1
CONGRESSIONAL RECORD-HOUSE February
3139; and by including a reference to
members of the Federal Executive Serv-
ice in 5 U.S.C. 5595(a) (it). The latter
insertion is needed because members of the
Federal Executive Service have a definite
limitation on their appointment (3 years)
and If they are not excepted from 5 U.S.C.
5595(a) (2) (ii) none of them could receive
severance pay as is Intended under the newly
added 5 U.S.C. 3140. The first amendment is
a technical one made necessary by the repeal
of the General Schedule reference to GS-18-
Paragraph (9) would amend 5 U.S.C. 7154
(which prohibits discrimination because of
race, color, creed, sex, or national origin in
classification and pay fixing,) to include a
reference to the Federal Executive Service
and other pay fixing authorities in subchap-
ter II of chapter 31 of title 5, United States
Code. This amendment. is essential as the
incumbents of the positions formerly in GS-
16, 17, and 18, who were governed by this
section 7154, are now in the Federal Execu-
tive Service and, of course, are still fully de-
serving of this type of statutory protection.
The section is also amended to delete a ref-
erence to 5 V.S.C. 3324 which this bill would
repeal.
Paragraph (10) would amend chapter 77
("Appeals") of title 5, United States Code, by
adding a new section 7702 to: provide for ap-
peals to the Civil Service Commission by
members of the Federal Eiecutive Service
and employees under a regulatory program of
executive management established under the
newly added 5 U.S.C. 3143(a) who have the
equivalent of career tenure, who feel their
employing agency has violated the employ-
ment agreement (either Initial or renewal)
under which they are serving. The appeals
that may be filed under this added section
7702 could relate to such things as an assign-
ment of duties alleged to be, of a nonexecu-
tive character or separation from employment
during an employment agreement.
The section is patterned after 5 U.S.C. 7701
which has, since 1944 served as the statutory
basis for the appeals of preference eligibles.
Paragraph (10) also amends the analysis of
chapter 77 of title 5, United States Code, to
show the newly added 5 U.S.C. 7702.
Section 2
Section 2 is a transition section which will
enable the present incumbents of positions in
GS-16, 17, and 18, or In the GS-l6, 17, or 18
pay range, to either enter the Federal Execu-
tive Service or an agency program for ex-
ecutive management or continue under the
appointment held immediately before the ef-
fective date of the bill. Any needed transi-
tion provisions for an agency program for ex-
ecutive management will be issued under the
regulatory authority in new section 3143(a)
and will provide the same rights as set out
below.
Subsection (a) (1) is applicable to career
and career-conditional employees who were
in GS-16, 17, and 18, or in the GS-16, 17,
or 18 pay range, immediately before the ef-
fective date and who are not excluded from
coverage under the new subchapter 11 of
chapter 31 of title 5. United States Code.
These career and career-Conditional em-
ployees have a choice between remaining in
the employ. of the agency under the same
appointment they held before the Federal
Executive Service was created or entering the
Federal Executive Service in, their employing
agency. If such an employee elects to enter
the Federal Executive Service he will be given
an initial employment agreement for 3 years
as specified in the new ?;3137 of title 5,
United States Code, without having his
qualifications reviewed or approved by a
Qualification Board. The entry into the Fed-
eral Executive Service of such an employee
will have no effect on any of his Federal em-
ployment rights or benefits such as leave. re-
tirement, life insurance, and health benefits.
8, 1971
If the employee elects to remain in the agen-
cy under the appointment he held before the
Federal Executive Service was created, he is
entitled to retain that appointment (with
the same rights and benefits) until such time
as he leaves it by transfer, retirement, re-
signation, death or whatever.
Subsection (a) (2) of section 2 applies to
employees who were in the excepted service
immediately before the effective date of the
bill. It distinguishes between two types of
excepted employees paid in the GS-16, 17, or
18 pay range.
The first type is the excepted employee
who, prior to the effective date, was in no
sense a "career" employee, i.e., an employee
in Schedule C or serving under a noncareer
executive assignment. This type of noncareer,
excepted employee had no true tenure be-
fore the effective date and, under this sub-
section (a) (2), he would be entitled to the
same type of appointment, a noncareer ap-
pointment.
The second type includes all other excepted
employees regardless of whether they were
excepted by statute or under Schedule A or
B. Any of this second type of excepted em-
ployees may, at the election of his employ-
ing agency, be offered a career appointment.
It is to he emphasized that this is an option
of the employing agency. not a right of the
excepted employee. The employee who accepts
the agency's offer becomes a career appointee
without having his qualifications reviewed or
approved by a Qualification Board. If the for-
mer excepted employee accepts a career ap-
pointment, he has all the rights of any other
career appointee. If such an excepted em-
ployee accepts a career appointment It will
have no effect on his rights or benefits such
as leave, retirement, life insurance, and
health benefits.
If an agency does not elect to offer this
second type of excepted employee a career
appointment or if the employee does not
wish to accept such an appointment, the
agency is required to allow him to remain in
its employ in the same excepted appointment
he held immediately before the effective date
of the bill with no change in his tenure and
no loss of any employment-protection bene-
fits he had immediately before that effective
date. This means that if this excepted em-
ployee had protection under 5 U.S.C. 7512
and 7701, he retains that protection. In addi-
tion, If he was paid under the General Sched-
ule, he will be paid in the future in the
same manner under section 2(b) of the bill
rather than under the new 5 U.S.C. 3139 ap-
plicable to members of the Federal Executive
Service.
Subsection (a) (3) of section 2 authorizes
the Civil Service Commission to prescribe
regulations to carry out the purposes of sec-
tion 2. The subsection expressly requires that
the regulations include an appellate proce-
dure so that an employee who believes his
agency has not given him a right to which
he believes he was entitled tinder the section
will be able to have an outside authority
review the matter and, when warranted, di-
rect that appropriate corrective action be
made. Agencies are required, by section 2(a)
(3), to take whatever corrrective action the
Commission recommends in an appeal under
the section.
Subsection (b) of section 2 (except the
provision concerning the Federal Bureau of
Investigation) establishes a temporary pay-
fixing authority for incumbents of positions
that were In, or paid at a rate of, 08-16,
17, 18, and P.L. 313-type positions immediate-
ly before the effective date of the bill, but
who choose not ,o enter the Federal Execu-
tive Service or en agency program of execu-
tive management or who are occupying posi-
tions in the excepted service which were not
brought under the FES or an agency pro-
gram by the agency. The subsection is re-
quired because after the effective date there
Approved For Release 2004/12/15 : CIA-RDP74B00415R000600070040-1
 February 8, Ypproved For8e
will be no General Schedule grades above
GS-15.
Paragraph (1) of subsection (b) defines
the coverage of the subsection and paragraph
(2) constitutes the necessary express au-
thority to allow agencies with administrative
pay-fixing authority to continue that au-
thority after the bill is enacted for the posi-
-tions covered.
'Subsection (b) (2) (B) Is a special pay-
fixing authority for the Federal Bureau of
Investigation which allows the Director of
that Bureau to fix the pay of 140 positions
in the Bureau by administrative determina-
tion without regard to the other provisions
of the Act ,put within the. same rate limits,
In lieu of GS-16, 17, and 18, paragraph (3)
of subsection (b) creates three new grades
(Grade 16, Grade 17, and Grade 18) which
have identical annual rates and steps to those
in the present GS-16, 17, and 18. It is essential
to keep in mind that this provision (indeed
all of section 2 and section 3 of the bill except
those provisions referring to the Federal Bu-
reau of Investigation) is temporary legisla-
tion-not part of title 5, United States Code,
which contains only permanent legislation-
which will remain in effect only so long as
positions of the type referred to in paragraph
(1) of subsection (a) exist.
The remainder of paragraph (3) of sub-
section (b) of section 2 is designed to con-
tinue the pay-fixing system for the former
GS-16, 17, and 18 positions so long as they
exist and are filled. These positions require
the Civil Service Commission to issue regula-
tions establishing a pay-fixing system so that
employees who occupy positions in Grades
16, 17, and 18 after the effective date will
continue to be paid in the same manner. as
they were before that effective date. These
regulations will have the full weight and
effect of statute and pay determinations
made in accordance with the regulations will
be binding on all administrative, certifying,
payroll, disbursing, and .accounting officials.
In the regulations, the Commission will in-
clude provisions that will govern employees
in Grades 16, 17, and 18 with respect to the
rate of pay on change of position or change
in type of appointment, periodic and addi-
tional step increases, and pay saving. Each
of these regulatory provisions will give to
the Gracie 16, 17, or 18 employee the same
rights and benefits he had when he was
paid under the General Schedule. It is .the
legislative purpose in including section 2 (b)
to ensure that the employees who are placed
in Grades 16, 17, and 18 by the enactment of
this bill will continue to be paid on the
same basis and under an identical pay-fixing
system as they were being paid under _the
General Schedule immediately before the.ef-
fective date of the bill.
Section 3
Section 3(a) repeals all statutes and other
authorities which authorized positions in, or
paid at a rate of GS-16, 17, and 18, and posi-
tions of a P.L. 313-type, imnieddately be-
fore the effective date of the Act, and con-
currently, authorizes each such position to
be continued under the authority of this
subsection (a). These positions are to be
continued under the authority of section 3
('a) until they are brought into the Federal
Executive Service or under an agency pro-
gram of executive management. Most of the
positions to which this section refers are
positions held by employees immediately be-
fore the effective date in 08-16, 17, and 18, or
in the C$-16, 17, or 18, pay range, who, under
authority of section 2 of the bill, elect not
to enter the Federal laixecutive Service,but,
instead, retained their position in the new
Grade 16, 17, or 18. When those, employees
leave these positions, the duties of these
positions will be performed by members of
the Federal Executive Service or employees
under an agency program of executive man-
agement, but until that occurs this section
Y~V j 74 *' 000600070040-1 11537
3(a) serves as the legal authority to continue
the position at whatever grade it was in (but
without the "GS" title) immediately before
the effective date of the Act. As expressly
provided in section 3(a) (2), subsection (a)
does not apply to the administrative pay-
fixing authority provided the Federal Bu-
reau of Investigation in section 2(b) (2) (B)
of the bill.
Subsection (b) of section 3 is an "account-
ing" provision which requires a report on
the positions continued under section 3(a).
This report will disclose to the Civil Service
Commission the exact number of these posi-
tions-and the former authority under which
they existed before the effective date of the
bill-so that control can be maintained over
them in the fuutre. By the use of this sub-
section the Commission will be able to deter-
mine just when all these positions are elimi-
nated.
Section 4
Section 4 is included to make positive that
the enactment of the bill will not decrease
the pay, allowances, compensation, or an-
nuity of any person.
Section 5
Section 5 is the usual severability provi-
sion.
Section 6
Section 6(a) sets the general effective date
of the Act at the start of the first fiscal year
that begins 270 days following the date of
enactment. This period of time is needed to
allow the Civil Service Commission and the
agencies time to prepare for the changes that
will he brought about in the area of execu-
tive management by the enactment of the
bill. During this period the Commission will
establish Qualifications Boards required by
the new 5 U.S.C. 3138. Also, during this pe-
riod the Commission will prepare the regula-
tions authorized by section 2(b) which will
govern pay fixing for the newly created
Grades 16, 17, and 18 and do such other
things as are necessary to make the bill
operational.
Section 6(b) sets the effective date of the
stewardship reporting provisions 90 days ear-
lier than the general effective date of the Act.
This earlier effective date for those provisions
will enable the Civil Service Commission and
the agencies having regulatory programs of
executive management to prepare and submit
the required report prior to the general effec-
tive date so that on that general effective date
the necessary number of executive appoint-
ments, ratios, and executive pay averages
will be authorized.
FASCELL PROPOSES AMENDMENT
FOR DIRECT ELECTIONS
(Mr. FASCELL asked and was given
permission to address the House for 1
minute and to revise and extend his
remarks.)
Mr. FASCELL. Mr. Speaker, I am to-
day again introducing legislation de-
signed to avert the kind of constitutional
crisis which threatened our Nation in
the last presidential election. The
amendment to the Constitution which I
am proposing would provide for the di-
rect election of the President and the
Vice President of the United States.
Our colleagues will recall that this
measure was approved in the House by a
significant margin of 339 to 70 in the
last session of Congress. In fact, few is-
sues have commanded the widespread
support which the direct election amend-
ment has enjoyed, and yet not been en-
acted.
Polls show that over 80 percent of the
American people favor this reform. The
President of the United States has said
that he supports direct election and
would urge the States to ratify an
amendment to that end if the bill won
congressional approval. And even such
diverse interests as the U.S. Chamber of
Commerce and the AFL-CIO have joined
in backing this legislation.
There is good reason for the unity of
feeling.
In 1968, the shift of just a few thou-
sand votes in selected areas of the coun-
try, out of a total of more than 68 mil-
lion cast, would have thrown the presi-
dential election into the House of Repre-
sentatives. We could again have had a
President who did not receive the great-
est number of votes cast. Or we could
have a President who was the winner in
popular votes, but still indebted to a
third candidate for his victory in the
electoral college.
Fortunately these possibilities did not
become realities, but 'there could be no
more graphic demonstration of the de-
gree to which the electoral college has
outlived its usefulness and, indeed, mu-
tated into a potentially antidemocratic
institution.
Mr. Speaker, let me congratulate our
colleagues for their wisdom in approving
this proposal by an overwhelming mar-
gin in the 91st Congress.
For those who have opposed this
amendment in the past for whatever
reasons, let me offer the observation that
we have flirted with disaster and been
spared.
For everyone concerned with making
government more democratic and re-
sponsive to the will of the people, let us
join in the support of this necessary and
overdue reform.
(Mr. HANLEY asked and was given
permission to extend his remarks at this
point in the RECORD and to include ex-
traneous matter.)
Mr. HANLEY. Mr. Speaker, one of the
interesting habits of people from the cen-
tral New York and Syracuse areas, es-
pecially when traveling, is the quick in-
spection of the bottom of their dinner
plates. Actually, this small gesture has
become the trademark of people looking
for a trademark. It is a matter of con-
siderable pride to these central New
Yorkers that Syracuse china has become
the hallmark of fine dinner service
throughout the Nation.
This year Syracuse china, the first and
finest in true American chinaware, cele-
brates its centennial year. The story of
its development dates from very modest
beginnings over 100 years ago, long be-
fore true, vitrified china was produced
in America.
Back in 1841, W. H. Farrar started a
small pottery on what is now called West
Genesee Street, in Syracuse. By using
local clays, Mr. Farrar produced whiskey
jugs, butter crocks and mixing bowls in
stoneware, along with clay animals in
brown glazed pottery. Withing a few
years the Empire Pottery Co. was orga-
nized to take over the Farrar Pottery, and
"white ware" for table use was added to
the line.
Approved For Release 2004/12/15 :-CIA-RDP74B00415R000600070040-1
 Approved For Release 2004/12/15 : CIA-RDP74B00415R000600070040-1
H 538 CONGRESSIONAL RECORD - HOUSE Febiiuar'y 8, 1971
But ..t was not until 1871 that the
Onondaga Pottery Co. was organized to
take over the Empire Pottery Co. This
was the company that was destined to
become the Syracuse China Corp., and
gain in';ernational fame within the cen-
tury.
The new company started by pro-
ducing a heavy duty earthenware called
ironstone in a small factory on Fayette
Street..ks acceptance of its product grew,
the company found it necessary to im-
prove aad enlarge its manufacturing fa-
cilities. In 1880, a new plant was built
on the site of the old. This was enlarged
on three successive occasions, trebling
the factory's capacity.
Things really began to happen in the
1880's. In 1885, semiporcelain ware was
produced which guaranteed no crackle or
craze-he such china made in the
United States. And, by 1891, Onondaga
Pottery went into full production of thin
translucent dinnerware-marketed for
the first time as Syracuse china. As
America's first true vitrified china, the
new Syracuse china was heralded
throughout the country. At the World
Columbian Exposition in 1893 it received
the High Award Medal and 11 years later
the Grand Prize Medal was awarded to
Syracuse china at the Louisiana Pur-
chase Exposition in St. Louis.
As the business pace picked up the
company branched out further and built
its third and final addition at the Fay-
ette Street site. In 1921, construction of
a new plant, on Court Street, was begun.
Here china was produced for commercial
use, in restaurants, hotels, hospitals, col-
leges, and universities.
In 1928, an ivory body dinner and
hotelwa.re was perfected and the com-
pany's commercialware division was on
the way to its present standing as leader
in the industry. "Econo-Rim" produc-
tion and the Syratone process of decorat-
ing followed in 1933.
From this point on, a never ending
program, of research and experimenta-
tion yielded scores of new techniques in
design[: g, making, and decorating both
household ` and commercial chinaware.
Such research even. made possible a uni-
que wartime product. During World War
II the company developed a completely
nondetsctable landmine and fuse, using
Syracu;e china as one of its basic com-
ponents. The first of its kind to be per-
fected, this outstanding contribution to
the defense effort was recognized by a
special citation from the War Depart-
ment.
The defense effort did not. retard re-
search or production of goods for the
consumer, however. By 1945, the com-
pany came out wjth Airlite china, the
first e-ier used on passenger airlines.
Since that time the company has con-
tinued to be a major supplier and in-
novator to the airline food service.
Since World War II, major innovations
in the industry have come from the top-
notch ceramic engineers and research
personnel at Syracuse China. Principal
among these was the introduction of the
Winthrop shape, a completely new con-
cept for the industry. The Winthrop
shape, introduced in 1950, marked the
first time any manufacturer produced
the interrupted edge to the commercial
market, a design feature that up to then
was limited to the production of house-
hold ware.
By this time Syracuse China was the
recognized leader in the industry. In fact,
the product name had become so well
known and widely accepted, that the
company's name was officially changed
to Syracuse China Corp, in 1966, and the
longstanding name of Onondaga Pottery
Co., became a matter of historical record.
One hundred years after the founding
of the Onondaga Pottery Co., Syracuse
China covers some 21 acres and holds the
uncontested first place in the commercial
chinaware industry. As the largest man-
ufacturer of commercial chinaware in
the United States, its quality products
can be seen throughout the, United States
and Canada-in the finest restaurants.
well-known colleges and universities.
and various health care centers. Its fa-
mous ceramic engineers and research
personnel continually test products and
formulas and investigate product devel-
opment. stresses and strains on products
and the design of new shapes. According
to President William R. Salisbury, the
Syracuse China Corp. looks on 1971, not
only as a year for centennial celebration,
but, as the "beginning of further growth
and leadership in quality products, cus-
tomer service, product design, innova-
tions, and technical know-how."
THE BUDGET OF THE UNITED
STATES
(Mr. BURKE of Massachusetts asked
and was given permission to address the
House for 1 minute, to revise and extend
his remarks and to include extraneous
matter.)
Mr. BURKE of Massachusetts. Mr.
Speaker, if someone were to tell me that
the budget of the United States would
make interesting reading-indeed excit-
ing reading-then I think I would be
understandably skeptical. Even more so
if someone were to argue that the budget
made interesting bedtime reading. I have
always thought I was safe in assuming
that there was quite a difference between
ham facts and cold figures and a work
of fiction. Most people would agree that
a budget should be a matte[ of hard facts
and cold figures than a work of fiction.
Now, however, after reading the Presi-
dent's economic message and going over
his budget, I am forced to reeaxmine
these traditional and supposedly safe as-
sumptions. Apparently what was uni-
versally true a week ago, can no longer
be taken for granted. The truth is that
in all likelihood, Mr. Nixon's budget will
go down in history more' as a work of
fiction than anything else-albeit not a
work of first rank and definitely not to be
confused with' a work of art.
Already the book reviews are describ-
ing the budget as being more Alice in
Wonderland than a realistic projection
of likely income and blueprint of reason-
able expenditures. While at first hearing,
such a combination as Lewis Carroll
and a Republican administration budget
might seem incongruous, closer exam-
ination reveals the budget is clearly a
mixture of relatively few hard figures
and many soft dreamns---to borrow from
another review. Another way of putting
it is that the budget is long on promises
and short on concrete and realistic as-
sumptions.
Now, lest this get a little forced, let me
admit at the outset that much of this
discussion would be unnecessary if the
President had been willing to describe
and admit the budge[. to be what it was-
a plan of deficit spending for an economy
in deep trouble--instead of trying to re-
sort to the elaborate disguise of referring
to it as a self-fulfilling budget. When the
President goes so far as to deny that his
budget will create the $11.6 billion deficit
that it is clearly creating, if followed,
the President invites upon himself this
kind of treatment. The President creates
a new credibility gap each time he argues
that the budget will spend itself so silly
that it will end up in the black instead
of the red.
Oh, I know it must be `difficult for a
Republican President, presiding ' once
again in this century over a serious eco-
nomic situation, to admit that he is
resorting to nothing more than old-
fashioned New Deal pump priming and
relying on-horror of horrors-such a
subversive and un-American device as
neo-Keynesian, post-Galbraithian deficit
spending. Even if important party con-
tributors were to accept this revolution-
ary situation for what it is worth, the
President is still understandably embar-
rassed about having to make such a com-
plete turnabout from his slavish devotion
a short 12 months ago to a rigidly bal-
anced budget to his crusading zeal for a
deliberately unbalanced budget. Thus.
this elaborate attempt to cover up what
has taken place-nothing more than a
refusal to admit defeat. Instead of con-
fessing that by spending the ways the
budget recommends, the Nation runs the
serious risk of adding to its already siz-
able debt burden, the President prefers
to confuse his pious hopes with reason-
able expectations. Instead of being hon-
est and admitting that by spending
money the Government does not have-
and worse, the Government will not have
in the foreseeable future based on the
economic facts of life-he is hopeful of
turning things around economically and
sparking off a much-needed economic
upturn, the President tries to perform a
sleight of hand, substituting a 4-percent
unemployment figure for the existing
6-percent-plus figure (of the moment.
After deliberately conducting his eco-
nomic policy for 2 years in such a way
as to insure ia. higher hovel of unemploy-
ment in this country than when he took
office, the President is now wishing away
his hard-won unemplov,nent figures with
the drop of a few billion dollars into the
economy. Just wishing for a full employ-
ment surplus does not, bring it about.
Just puliing a $1.065 trillion figure for
the gross national product out of the
air does not mean there is any real like-
lihood that it can be achieved this com-
ing fiscal year. The consensus outside the
rarified atmosphere of close administra-
tion circles tends to settle on a more
realistic figure, in the neighborhood of
$1.045 or $1.050 trillion. Similarly, pull-
ing a $229.3 billion revenue figure out
Approved For Release 2004/12/15 : CIA-RDP74B00415R000600070040-1