Meeting With Federal
Government Employees Remarks and a Question-and-Answer Session With 13 Employees.
May 21, 1979

THE PRESIDENT. First of all, I would like to welcome you here to the Cabinet Room. We had a meeting this morning with some of your bosses. We meet here every 2 weeks with the full Cabinet and the major agency leaders, and then, in between, I have important meetings like this, when we discuss matters of domestic and foreign consequence to our Nation.

Today, however, is a special occasion for me to have a chance to meet with a broader, representative group of career civil servants in our Government. You have been chosen, I think almost every one of you, perhaps everyone, because of outstanding achievement. And you’ve received awards for a special contribution to make our own Federal Government more effective and more efficient and a greater credit to me and to the country.

I think it’s accurate to point out that in the last 2 1/2 years, I’ve been privileged to be part of the system which represents the American people in our Government, and I’ve recognized with a growing degree of appreciation the high quality and dedication. of the overwhelming majority of people in the civil service system and in the administrative positions as well.

I know that you represent the Armed Forces, you represent the farmers, you represent the children in the schools, you represent people who are handicapped, you represent those who are looking for good housing, you represent the taxpayers, and you represent others who have perhaps only one contact with the Federal Government as a principal source of advice and counsel if they are in a profession,and that’s the agencies like yourself and what you represent.

We are in a time, I believe, of concern, some troubled feeling on the part of the American people about energy, about inflation, about peace in the world, about taxation, about ethics. And you and I are partners in trying to address these troubled times, to meet the challenges and, also, take advantage of the exciting opportunities that we have to make a great nation’s government even greater.

American people are concerned about some of the things in government. When I campaigned around the country for 2 years, most of the expressions of concern about waste, redtape, overregulation, often came up in townhall meeting-type formats from government employees themselves. And those who work for government out in the field, actually delivering services to the people of America, see in a much more vivid way than the average citizen in private life that any such defect in the Government ought to be rooted out.

And I have tried since I’ve been in this office to form a partnership with you. When there is waste, we want it to be eliminated. Almost all of you have contributed substantially and have been rewarded for your contributions to elimination of waste. We’ve tried to reduce the redtape, get rid of unnecessary regulations, and on the rare occasions when there is fraud in government, I’ve tried to form a partnership with you to root out that fraud.

We have now gotten the Congress to pass legislation authorizing Inspectors General in the different agencies. And they will not only be a constant source of investigation and improvement and inspiration, but they’re also a place where you can go if you have a complaint or if you have a beneficial suggestion or if you have a report to make about a defect in Government. And you will be protected from any sort of punishment.

I think we need to have some protection for whistleblowers, who come forward in a courageous way and say, "This is wrong in our Government. This is something that’s been a defect for a long time and I want it rooted out." In the past, there have been cases where those kinds of people have been punished, and the example of that punishment has restrained others from coming forward in an effective way to improve the Government’s structure itself.

I was very pleased when the Congress passed the civil service reform legislation. That legislation was evolved by people like you, working with Alan Campbell, and that legislation, after it was evolved, was put forward to the Congress, and I think it passed in a very fine form.

We are now seeking to let the volunteers who want to come forward to take advantage of a senior executive service do so, and the overwhelming portion of the senior executives do, indeed, want to participate in the kind of career opportunity that lets their initiative and lets their ability and lets their drive and their competence be recognized. And it’s an inspiration to those who serve in government to do an even better job.

And I think that Alan has been very pleased at the vast percentage of those who do have that opportunity to want to leave the security which they formerly had when everybody moves in lockstep, no matter who does a good job and who doesn’t, to the kind of competitive world where excellence will be indeed rewarded.

The suggestions that have been made last year by more than 42,000 Federal employees and saved our Nation over $350 million is a very good example of a new spirit of enthusiasm and dedication onyour part and on the part of the other thousands of people like you. Some of them are very tiny savings, a few hundred dollars or maybe a few thousand dollars at most. I remember one by a NASA employee that saved our Government, I think, $30 million, when they recommended that when a space shuttle was launched, it might be launched not with a carefully designed, new type of engine, but launched from the top of a modified 747. And this kind of a saving is a very good step in the right direction.

I know that you have some concerns that you want to express to me this afternoon. This program being taped for television will let the other Federal employees know about our interrelationship with one another. And, of course, we have members of the press who will be in the room throughout the session this afternoon.

I think it’s good for me immediately to put your mind at ease about two or three rumors that have been floating throughout the civil service in the past.

There are absolutely no plans, for instance, to raise the minimum age at which Federal employees can be retired or can draw their retirement benefits. I don’t know where the rumor came from. We have never considered it. I had never heard of it before it was publicized in the paper. And several of the civil servants have come to Alan Campbell and to my staff and said, "Why are you planning to raise the minimum retirement age?" We have no plans to raise the minimum retirement age.

Another question has been raised about the prospect of the combining of social security retirement with civil service retirement systems. I have taken no position at all on this. The Congress mandated that a commission study the feasibility or advisability of this step, and this commission is now doing the assessment work. They will make a recommendation, I think, just before Christmas, December 20 or something of that kind. And when that recommendation is made, all of you will have access to it. The Congress will have access to it. Alan Campbell will have access to it; so will I. And following that, then decisions can be made accordingly.

But in no case will the vested rights of civil servants who have contributed to a retirement fund be lost. I can’t imagine any circumstance under which those vested retirement funds would be lost to you. This is a problem, I know, for many people who are concerned about security, to have the investigation going on. But I want to emphasize again that no decisions have been made. I have not taken a position on it. I do not intend to until I can very carefully study the report that will be concluded in December.

I might make two other points very quickly. We have established, and the Congress, as you know, has approved, the 5 1/2-percent pay cap. This was done under the intense pressure of nationwide inflation. Including fringe benefits, which is included in the guidelines for private employees, it amounts to more than a 6-percent increase for Federal employees. This is not as much as many employees would like, but our Nation is faced with a very serious prospect of increasing inflation.

As you well know, the members of the Cabinet, my own senior staff in the White House, have taken zero increase—not 5 1/2 or 6 percent, but zero increase. And I firmly believe, in spite of the fact some might not like the idea, that we in government ought to take the initiative in trying to constrain inflation. And a 1-percent difference between what the Federal employees get and the maximum limit underthe voluntary wage guidelines, I don’t think is too great a sacrifice to make to provide an example and also to let the people who support us with their tax moneys have confidence that we ourselves are willing to take action to control inflation in a time of trouble and challenge for our Nation.

The other point I’d like to make is that we have now under preparation—it has not been concluded and it has not yet come to my desk—a proposal to reform the compensation system. Alan Campbell will go over this in detail with you and the head of the unions and those who are interested. We must take action of this type in order to protect the comparability system. Otherwise, we’re going to be back in a position which the Government witnessed many years ago, when every year the Congress would decide whether or not to give a certain salary increase. And to bring the Federal employees pay scale into an accurate, comparable situation with employees in the private business and industry is a very important challenge for us all.

I’m determined to bring this about so that there will be stability, credibility, and predictability in the establishment of pay levels for Federal employees in the future.

Let me close by saying that I’m grateful that you would come. I recognize among you superior achievement. And because you are here and because your own fellow workers know what an excellent job you have done, I know they’ll look to you for advice and counsel and a report when you return back to your own jobs.

We’ve got an outstanding nation. The people look to us for leadership. In the past, and even now, they have sometimes been disappointed. I get my share of the criticism when the people are disturbed. You will have to share those criticisms with me. But that should just inspire us to work in a closer spirit of harmony and partnership and do an even better job to correct the defects and the problems that we all know do exist at times in the Federal Government and set an example for the rest of the Nation and restore the credibility and the trust that’s an integral part of strengthening our democratic system.

I’m very glad now, Alan, to hear from any of the people around the table. And I’d like to ask you to recognize them, if you don’t mind.

MR. CAMPBELL. Yes. Who would like to make a comment or ask the President the first question?

MR. WILLIAMS. Mr. President, we appreciate very much this opportunity to meet with you and appreciate your encouraging statements about the Federal employees. I hope that this meeting can serve to better communicate your positions and your concerns to the Federal employees throughout the country.

I think the Federal employees, over 2 million of them, look to you as their leader and the developer of the policies and the programs that affect their very welfare. We do get feedback, and there are concerns and perhaps perceptions by a number of employees that perhaps a number of steps taken by the administration have indicated an "anti" attitude towards employees, such as the comparability pay concept, the rumors about retirement changes, payment for parking for Federal employees, the overall ceiling on executive salaries or restructuring of the pay system, and so forth.

So, I think all of those collectively have created a great deal of misconception,perhaps, on the part of our employees. I wish you could perhaps comment generally on this, and do you see new positive programs on the horizon that will be favorable to the Federal employee area?

THE PRESIDENT. I think many of the things that we’ve already done have been indeed favorable. I don’t think anybody would deny that the new civil service legislation is favorable. It does provide more competition and it does provide, at the same time, a higher incentive for superb performance. But those are the kinds of characteristics that ought to pervade the feeling and the attitude of every employee, including the President of the United States. And it commensurately provides a higher degree of reward for those who are highly qualified and who are highly motivated and who do superior work. In my opinion, that is a major step in the right direction.

As I said before, I don’t believe that the little more than 6-percent increase in pay, plus fringe benefits, is too great a sacrifice to ask among the civil servants who work with me in government. When I checked among my own Cabinet officers and within the White House staff, the top staff members, they were completely willing not to have any increase in their salaries during the time of very high inflation when we need to address this issue in a forceful fashion and also set an example for the rest of the country. And as I said, the 7-percent limit is the maximum limit. There have been many settlements around the country at a much lower level than this.

I can’t do anything other than disavow the inaccurate reports that have been made about minimum age for retirement and so forth.

I forgot to mention a few minutes ago about the elimination of the right for free parking—as you know, this was a privilege that will be enjoyed until October, when it’ll begin to be phased out—that has been enjoyed by just a very small portion of the Federal employees.

And in a time of energy shortages, in a time of need for the conservation of energy, in a time of very high air pollution, I believe it’s a proper decision to have the Federal employees on the same basis as private employees, paying a very modest amount of parking fees, which will be an instigation to the sharing of an automobile by several employees, where most of them now come in, as you know, one person in an automobile. And also, it’ll tend to make the use of the new rapid transit system more effective and more attractive. But I don’t have any apology to make for that. It’s something that’s not highly popular, but I don’t think it’s an unwarranted sacrifice to ask.

MR. WILLIAMS. In the pay area, Mr. President, do you foresee that in the years ahead that Federal employees will be treated as well as employees in the private sector in terms of the cost of living?

THE PRESIDENT. Yes, I believe that if we can pass the reform compensation legislation that’s now in preparation, the idea there is to have the Federal employees, in a very predictable way, have pay schedules that are accurately comparable to those paid in the private sector. It also permits some flexibility from one community in our Nation to another, so that the salaries are indeed comparable. I think that’s the goal that we want to achieve.
MR. WILLIAMS. Thank you very much.
MR. CAMPBELL. Other questions? Mr. McDuffie.

MR. McDUFFIE. Last year, in January, , my people extended you an invitation to visit our establishment at Fort Belvoir. Asthe boss, I’d like to renew that invitation to you.

My concern, and for my people, is concerning contracts. We hear continuously everything is going on contract—complete DIO, Director of Industrial Operations, and one fort, I think someplace in Georgia, is supposed to go on a trial basis, everything on a contract.

My concern is the people who work for me and look to me for leadership. They are all old; they’re in the minority. When I say old—don’t tell them I said this—but they’re past 21. They are dedicated people, and most of them have over 20 years civil service behind them. Many of them are grandmothers who are working and striving to keep kids in college and keep homes together.

If things go on contract, my employees are the lowest paid in the wage rate system. They have no bumping rights to nobody. There’s only one place to go, is home, and down to HEW for a handout. And I use this word "handout" deliberately, because that’s what it amounts to when someone who has worked all of their life, their productive life, in civil service, and they go out.

Contract communications, I’m quite sure, is beneficial to the Government, and it should be. But if we are operating an installation where we are on a break-even basis, or close to break-even—in many cases in laundry, we aren’t showing a profit. In my particular case, we are operating on a profit, paper profit, of course.

So, what’s going to happen to these people? Now, short-term contracts, or contracts that can be bid on my operation-for example, he can lose money in the first year; the second year, he goes crazy, he becomes a millionaire. The seven laundries or the nine laundries in Europe are on contract at the present time, and the contracting cost ’has almost doubled in the third year. It started out at a little over $6 million, and now it’s almost $12 million for operating seven laundries. The loss in 1976, I believe it was, was just a little over $1 1/2 million. It is currently projected to be over $6 million loss by going on contract.

But really, my concern, primarily, is the people in laundries throughout the United States and overseas. What’s going to happen to these people when they don’t have a job, no bumping rights, and most of them are too old to go out and train again? There’s nothing there for them.

THE PRESIDENT. Well, I’m very concerned about the protection of the rights of employees of that kind, as you undoubtedly have known. When I was beginning our programs to reorganize the Government, to make it more efficient, more effective, I went into every agency, every major agency in the Washington area, personally, to answer questions. Sometimes five or six thousand people would come, and I would answer questions in the courtyards of the Pentagon and other places. And that was a frequent one asked: "Will you protect the jobs of people who might be affected when the Government is reorganized?" We have had six or seven or eight reorganization plans already approved. And I think that I can say that within the best of our ability, I think, successfully, we have protected the careers of those who might adversely have been affected.

The contracting part of decisions are made when the head of an agency is convinced, along with the Office of Management and Budget, that contracting itself can save indeed the taxpayers and the Federal Government substantial amounts of money. They make that recommendation then to me. And I have been extremely cautious in not putting forward my own approval of contracting outside,full-time employees, unless it is obvious that employees themselves will be protected and also that the Government will benefit by reduced cost for a given level of service.

If you have any information that would indicate that we have made a mistake in that respect, I wish you’d give it to me. I’ll be glad to have it. And I’ll discuss this with the Office of Management and Budget and also with Secretary of Defense Harold Brown and make sure that this does not ever occur anymore. And I’ll read these papers myself, and thank you very much.

MR. CAMPBELL. I’ll just add, if I might, Mr. President, that under the new guidelines that OMB has put out, which will go into effect May 30, any activity which currently is being done by the Government, there is a bias in favor of calculating the costs by giving a 10-percent advantage to continuing it in the Federal Government.

In addition to that, there are employee protections in situations where there is contracting out—I don’t mean to suggest for a moment there aren’t problems; there are indeed problems, and they’re very human problems. But I can assure you that both the agency and the Office of Personnel Management do everything possible to protect the rights of employees and to go a step ’beyond that and do everything possible to find them employment elsewhere in the system.

MR. CRIBBINS. May I add something, sir?

THE PRESIDENT. Please do.

MR. CRIBBINS. I am in the Pentagon, and I do quite a lot of work with contracting. Every one of these contracts are treated very specifically on a case-by-case basis. And all of the very things that Mr. Campbell is talking about are considered-personal rights, environmental impact, impact on a low-cost area or an area that’s in trouble economically. And there are occasions when we go on contract to find out that maybe it wasn’t the very best case, as Mr. McDuffie’s. But I would say that that was rather an exception. In general, I would say the programs are being very well monitored, from where I sit.

THE PRESIDENT. My impression has been, maybe from a biased point of view, that we are much more cautious now with the new regulations that, Alan, you described, than was the case 3 or 4 years ago—
MR. CRIBBINS. That’s correct, sir.

THE PRESIDENT. —protecting employees’ rights.
MR. CRIBBINS. That is correct; much more so.

MR. CAMPBELL. Who’s next?

MR. CRIBBINS. I would like to try once more, while I have the floor. You mentioned the word "ethics." And I would solicit your support for this, and I know that you have given some support to it. I think that the new conflict-of-interest [law] ¹ was needed. There wasn’t any doubt about it. The perception was coming over that some people didn’t care. But now I think maybe the pendulum has swung a bit far, and we are beginning to lose some really top-level people because of overly restrictive conflict-of-interest regulations.

¹ Printed in the transcript.

And I would suggest, sir, that I am concerned that in the future—and, incidentally, I don’t have that kind of future, so I’m not personally concerned—but in the future that we may deny ourselves some very good people, because these folk will be afraid that the very things they will do in government will preclude their followingthrough with a career outside of government.

THE PRESIDENT. This has been of concern to us. We’ve discussed it several times around this table when the full Cabinet was here. And as you know, there was one amendment added to the ethics legislation in the Senate that we did not support, that created a technical problem. And we are now working with the House and Senate to get those defects corrected, hopefully, before the first of July.

We have had a few people who have resigned from Government service because they felt that the new ethics legislation restricted them excessively in their future dealings with the Government, as it related to jobs that they were doing in the Government now. I think that it was necessary for some people to leave the Government because, in the past, there has been too much abuse by people who served in the Government for a limited period of time, got special knowledge or influence within the Government structure itself, went out and formed either a consulting firm or joined a legal firm, and came back and used improperly their former contacts in the Government. That kind of thing ought to be rooted out, and I’m determined to root it out.

MR. CRIBBIN. Great.

THE PRESIDENT. But the technical defect that was in the law, we are now trying to correct.
MR. CRIBBINS. Thank you, sir.

MR. MULHERN. Mr. President, I have three points I’d like to make. First of all, I understand we’re supposed to be here to give you feedback of how the Federal employees feel.

THE PRESIDENT. Exactly.
MR. MULHERN. The morale factor, I think, is a very significant one that we have to react to. And I don’t think that some of the things that Bill Williams brought up about why they are concerned also gets over into this area of appreciation for the work being done by the majority. We always come out and we say to them, "We think all of you do a good job, but there are others," and then we dwell on those others.

THE PRESIDENT. Yes. That’s true.
MR. MULHERN. I don’t know of one situation where we have gotten favorable publicity other than—to the degree that I think they should—than when we got on the shot to the Moon. People got up and said, "My God, look what they did."

THE PRESIDENT. Yes.

MR. MULHERN. And we have all these other things that these other departments are doing. And somehow we’ve got to get it out, so that the Federal employee out there feels inside, "what a great government that we have here," and his part in it.

So, I think that in addition to these items that come up of concern to them, they are concerned about this other situation, as to how they fit socially within the cities and towns of our country with respect to people. And it’s unfortunate we’re not communicating to them the real good that this Government does for our people.
The second one is that——

THE PRESIDENT. Let me respond to that one very briefly.
MR. MULHERN. Yes, sir.

THE PRESIDENT. What you say also concerns me. I’m the representative of the employees of the Government, and I’m the top employee in the Government. I would say, not quite facetiously, that anybody who thinks they are being criticized as an employee ought to pick up the newspaper every day and compare the criticismthey get to the criticism I get—every day. [Laughter] I don’t object to it, because I know that constructive criticism can make us do a better job and correct errors in Government or defects in the Government that we might not otherwise have known about.

The thing that I have tried to do is to acknowledge freely that there has been excessive regulation, excessive redtape, excessive waste, excessive bureaucratic confusion and, on rare occasions, excessive fraud, and to point out that the rooting out of those things is not by me against the 2 million Federal employees, but it’s me along with the overwhelming proportion of those Federal employees, all of us trying to improve the government mechanism together.

In other words, it’s not me and the public against the Federal employees, it’s me and the Federal employees, as partners, trying to make the Federal Government better.

And I very seldom make a speech anywhere in the agricultural area that I don’t point out the improvements that have been made in agriculture. The year before last, last year, again this year, we’re setting all-time records, for instance, in the export of agricultural products to foreign countries. This is something that everybody knows I didn’t do. But this has been done by the superb professional economists and advisers and foreign sales experts within the Department of Agriculture.

So, I think there is a great deal of natural appreciation for what Federal employees do. And the thing I want to do is to make us all not be satisfied and not wince or cry out loud when we are criticized, but say we’re trying to correct those defects and we’re trying to make it so that we are not subject to legitimate criticism in the future.

But I’m very pleased at how we have been courageous enough to tackle some problems that have long existed in government. And I believe that we have begun to convince the American people now that we are trying to root out those few instances of fraud and that we don’t try to cover up or hide those instances because we ourselves might be embarrassed.

It is somewhat of a reflection on me as President, having been in office for 2, 2 1/2 years, to find that there’s a person in the General Services Administration who is violating the law. But I would rather root that person out and let the public know we’re rooting him out than to leave that person there. And if I get part of the blame, I’m just willing to accept that. And I’m sure that most of the civil servants are in the same category.
Go ahead and cover your next point.

MR. MULHERN. The second point was that personnel ceilings have been here in my own agency since ’67.

THE PRESIDENT. Yes, I know.

MR. MULHERN. So, I know they’re popular with the press and others, but sustained personnel ceilings gets down to a point of where it becomes detrimental. And we have to be careful when we say that, because it sounds good, but first you start contracting and signing cooperative agreements, and soon you start to get feedback: "Now, look, this is costing more money than if you did it the other way." And I’m sure the Government wants to do it where it’s the most efficient. But sustained personnel ceilings is a real burden.

I think that that area needs to be examined very thoroughly to be sure that we’re not overdoing it, or that there needs to be adjustments in different departments or sections of departments.

THE PRESIDENT. I agree to some extent. Let me give it to you from my perspective.

I have tried to restrain the growth in total Federal employment, but I’ve tried to do it in such a way as to eliminate excessive employees, when a normal attrition takes place in areas where they’re not needed. In order to save time, just let me give you two quick examples.

Within the last 2 or 3 weeks, we’ve had two Ambassadors retire: one in Switzerland, one in Egypt. The one in Switzerland is a noncareer officer who’s a top businessman, very successful. The other one is a career officer, Hermann Eilts, who has served in the Mideast for 30 years.

Both of them, when I asked them on retirement, "What is your major suggestion for improvement in the ambassadorial service?" they said, "We have entirely too many people in the foreign embassies of our country, in Egypt and in Switzerland. We could do a much better job if we had half as many people."

So, I have already contacted the Secretary of State and the Office of Management and Budget, and we’re going to send a small team around to visit a representative number of embassies in foreign capitals. And if we can see there that we can do a better job with fewer people, that will be great. And then if we save 200 employees or 2,000 employees, if we can increase the number of agricultural experts who sell American grain overseas—

MR. MULHERN. Amen. Amen!

THE PRESIDENT. ——that’s a good change, right? [Laughter]
MR. MULHERN. That’s right.

THE PRESIDENT. That’s the kind of thing we’re trying to do. But we have not cut down overall levels of employment. We have tried to maintain them constant. But we’ve tried to focus the need and fill those needs, and we’ve tried to eliminate excessive employees where they are not needed.

MR. MULHERN. If the evaluation shows that it’s excess, I think everybody is in agreement.

THE PRESIDENT. That’s what we are trying to do.

MR. MULHERN. It’s when the evaluation is not even made and the decisions are made, that’s when we protest.

THE PRESIDENT. I can’t deny that sometimes we make a mistake, and sometimes the impositions are arbitrary. But I have really tried to look at it personally. Obviously, I have to take the recommendations of the head of your agencies and also of the Office of Management and Budget, but I get involved in it personally and try to make the best judgment I can.

MR. MULHERN. I don’t want to monopolize the time here.

MR. CAMPBELL. Since the President is allotted only a certain amount of time, we ought to at least get one question from one of the women.

THE PRESIDENT. Yes, I’d like that. [Laughter]

Ms. GIBSON. Well, Mr. President, I feel that many Federal employees are concerned about health insurance, health benefits. Specifically, will the new health insurance plan contain a clause to cover dentistry? The high cost of dentistry is not covered in most health insurances that we have in government. Has any provision been made for that?

MR. CAMPBELL. Should I respond to that, Mr. President?

THE PRESIDENT. I think I’d better let Alan respond. [Laughter] Please do.

MR. CAMPBELL Yes. We are working with the carriers now about the possibility of including dental coverage in healthplans. The difficulty is the dental coverage is very expensive, and health coverage in general is becoming much more expensive. We hope hospital cost containment will help in that regard.

But in order to include dental coverage, there would have to be a very substantial increase in cost of health insurance to both the employees and to the Government.

We are now looking very hard to see if there can be some cutback in some of the medical coverage in order to include dental, and then the employee can make a choice of the kind of package that he or she may want. We’re very aware of it. We hope very much we will be able to accomplish it. But within what we think are reasonable costs, it’s going to be very difficult.

THE PRESIDENT. And the choice would be made by the employee?

MR. CAMPBELL. Yes, the choice would be made by the employee.

MS. GARCIA. I’d like to get back to civil service reform, which I agree is an effective step forward. One major concern I’ve run into is the merit pay implementation. As a personnel director, I’m responsible for seeing that it’s implemented effectively. But I don’t think the employees feel that it can be done fair and equitably. I’d like to know your views. And following on that, do you plan to extend recommending merit pay to grade levels other than 13 through 15 supervisory and managerial levels?

THE PRESIDENT. Well, I’ll let Scotty Campbell comment after I do.

The concept of the civil service reform laws was understood by me fairly well when we had the debates and when I met with congressional committees and when I went out and met with all the employees in different agencies. And I think that the idea was to try it at those particular pay levels first and make sure that we did have a smoothly functioning program before we extended it to other pay levels.

I think Scotty Campbell, again who sits in a biased position, might very well comment on what he sees as the problems in the implementation, in prospect and already discerned. And maybe you could meet with Scotty later to see if you have any particular cases where you don’t think it has worked effectively. You could discuss them with him. Scotty, would you respond to that?

MR. CAMPBELL. Yes, very briefly. First, may I say, to reinforce what you said, Mr. President, about the Senior Executive Service, we are delighted that of the over 3,000 who already have agreed to join, only 7 had said no. This is in contrast to the predictions we got during the period of passage and, I think, speaks very well for the Federal employees at the top. They are willing to take risks. They are willing to be measured against their performance. And on the whole, I would argue that that is demonstration to the public and to all of us that we have a group of top managers in ,this Government that are willing to put their jobs on the line.

In relation to merit pay, there’s no question that since we’ve not had performance appraisal in the Federal Government that amounted to anything, there is a great deal of concern among those at grades 13 through 15. My own judgment is that we are making good progress. Many of the agencies are now giving training in how you do performance appraisal. And my guess is that, like the Senior Executive Service, after people get through the first fear of change, that there will be a general acceptance of it.

But it is difficult. It’s going to take time. The private sector people tell you how difficult it is. But none of the major companies are thinking of abandoning it, because if you don’t have performance appraisal, what do you base decisions on? And that means you make automatic decisions, and you lose what we hope will be brought out of it.

I can just assure you, Mr. President, that we are working very hard to provide training in how you do performance appraisal. We’re working with the employees in doing so. And I think a year and a half from now we will have the same kind of response to performance appraisal that we are now getting to the Senior Executive Service.

THE PRESIDENT. Scotty, how closely do you work with people like Ms. Garcia to make sure that the initial stages of it are working?

MR. CAMPBELL. We work very closely with the personnel directors across the Government, as well as with the Assistant Secretaries. And I must say, we learn as much from them as they learn from us as we attempt to put these systems into place.

THE PRESIDENT. Well, Scotty, our time has run out, but let me say this: As we get into the program on merit pay more thoroughly in the weeks and months ahead, I hope that if a problem does evolve where you and the personnel directors agree that we’ve got an unforeseen problem, that you will come to me and let me know about it. And we’ll see what we can do to alleviate the problem.
MR. CAMPBELL. I certainly will.

THE PRESIDENT. I think that the principle, as you know, is very similar to the Senior Executive Service, that within a certain reservoir of funds, the ones who do superior work get a higher level of pay. And that, I think, will be an incentive for us all to try to do a better job, to let the American people be truly proud of the outstanding work that we hope to continue to do in Federal Government service.

I’m part of you, and I’m very pleased today to have you representatives of the different agencies and also the different pay levels and also the different careers come and meet with me. I’ve learned a lot in preparing for this meeting, and I’ve also learned a lot from your comments and questions. I wish you well in the future, and I know you wish me the same. We’ll do a good job for the taxpayers of our country.
Thank you very much.
MR. CAMPBELL. Thank you.

NOTE: The session began at 2:10 p.m. in the Cabinet Room at the White House.

Alan K. Campbell is Director of the Office of Personnel Management. Questioners were William E. Williams, Deputy Commissioner of the Internal Revenue Service; Rudolph F. McDuffie, manager of laundry for the Army Engineer Center at Fort Belvoir, Va.; Joseph P. Cribbins, a technical adviser on aviation logistics with the Department of the Army; Dr. Francis J. Mulhern, a veterinarian in the Bureau of Animal Industry, Department of Agriculture; Audrey N. Gibson, chief of the Secretary’s Correspondence Unit at the Department of Housing and Urban Development; and Angelina Garcia, Director of Personnel Services at the International Communication Agency.