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Washington, D.C.?Fewer and fewer of the brightest graduates of the nation's most prestigious schools of public service are choosing employment with the federal government, a long?term trend the leader of the nation's largest independent union of federal employees said inevitably will lead to a serious decline in the quality of service provided America's taxpayers.

The reason for the disturbing trend, President Colleen M. Kelley of the National Treasury Employees Union (NTEU) told a Senate Subcommittee, is that the federal compensation package ?including the critical elements of pay, retirement and health benefits?lags farther and farther behind the private sector.

"Federal employees, just like their private sector counterparts, must believe that substantial rewards exist for excellence and productivity," Kelley told the Subcommittee on Government Management of the Senate Committee on Governmental Affairs.

Without appropriate compensation and incentives, she said, the federal government "will find it increasingly difficult to remain competitive" with private employers.

The NTEU president cited studies, including one by the government's General Accounting Office (GAO) going back to 1994, and more recent analyses by Harvard's John F. Kennedy School of Government and the George Washington University public administration department, showing lagging interest in employment with the federal government.

The single most important and pressing step, she said, would be "a decision to fully implement" the 1994 Federal Employees Pay Comparability Act (FEPCA), which called for the closing, in stages over 10 years, of the public?private pay gap. "That would do more to address recruitment and retention in the federal government than all remaining incentive programs combined," she said.

Since its enactment, however, no annual federal pay raise has been even close to the level called for under the FEPCA formula, and the pay gap continues to be sizeable, she said.

Beyond implementing FEPCA, Kelley said, Congress needs to "provide adequate discretionary funding" to agencies to allow them to implement various programs in existing law, including recruitment, retention and relocation bonuses and awards programs recognizing various aspects of excellence in performance.

"Agencies simply do not have the resources to adequately fund these important incentives," she said. "They are constantly forced to rob Peter to pay Paul."

The union leader urged more federal sector use of "family?friendly programs" such as alternative work schedules, telecommuting options, flexiplace, leave banks, child care subsidies and the chance to use personal sick leave to care for ill family members.

"These benefits provide a sense of community both inside and outside the office," she said, emphasizing the positive impact on agency performance of reduced absenteeism, increased morale and motivation and higher rates of employee retention.

NTEU represents some 155,000 employees in 24 agencies and departments, and has long been the leader in the fight for higher pay and a broader range of benefits for federal employees.