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Washington, D.C.—It’s no wonder the government is experiencing a human capital crisis that threatens to worsen significantly, given the barrage of negative messages federal employees are getting regarding not just their pay and benefits but their job security as well.

That was the thrust of a message delivered by President Colleen M. Kelley of the National Treasury Employees Union (NTEU) in testimony to a joint hearing of the Senate Subcommittee on Oversight of Government Management and the House Subcommittee on Civil Service.

“For entirely too long now,” President Kelley said, “too little attention and too few resources have been spent on the federal government and its employees. The crisis we face today is the result of that failure.”

Among the key problems, the NTEU leader said, are inadequate pay, rising health care costs, a lack of congressional commitment to providing agencies with adequate resources, and the constant concern that government jobs will be turned over to the private sector.

“The unfortunate message so many of today’s federal employees receive is that even as they struggle to perform to the best of their abilities,” President Kelley said, “the leadership of their agencies may be plotting to contract their positions out from under them.” NTEU has been leading the

fight against the administration’s drive to contract out as many as 850,000 federal jobs.

“Employees have told me,” she said, “that the message they believe their agencies are conveying to them is this: we may hire you, we may train you, we may even promote you, but when it comes time to meet our contracting out quotas, we may eliminate your job in order to meet our targets.”

She added: “What private sector employer sends such a message to employees it is trying to either recruit or retain?”

Kelley also was sharply critical of the administration’s proposal to create a $500 million Human Capital Performance Fund. “Funding for this new gimmick comes at the expense of the 2004 federal pay raise,” she said, noting that the administration has proposed only a two percent federal civilian pay raise for next year, while proposing an average 4.1 percent raise for members of the military. NTEU supports pay between civilian and military employees.

“Rather than putting this $500 million toward a more appropriate pay raise,” she said, “the administration would give managers unfettered discretion to give incentive pay to a fraction of the federal workforce. The only thing this is likely to accomplish is a further decline in employee morale.”

Kelley added that the proposed fund “should not be another excuse not to close the pay gap” between public and private sector pay.

She urged a joint committee focus on employee benefits, particularly the importance of the Federal Employees Health Benefits Program (FEHBP) in attracting and retain quality workers. She said FEHBP “is in crisis,” pointing out that the 11.2 percent premium increase in 2003 marked the fifth year in a row of “exorbitant rate increases” in federal health care.

President Kelley said private sector employees pay, on average, less for their health care, both in terms of percent of premium and monthly cost, than do federal workers. She pressed for passage of legislation that would raise the government’s share of FEHBP premiums from the current average of 72 percent to an average of 80 percent. That would bring the federal government “more in line” with private employers, and state and local governments with which it competes for employees, she said.

As the largest independent federal union, NTEU represents some 150,000 federal employees in 29 agencies and departments.