New Medicare Agency Provisions of S. 1, as Passed by the Senate, and H.R. 1, as Passed by the House

New Medicare Agency Provisions of S. 1, as Passed by the Senate, and H.R. 1, as Passed by the House

Order Code RL32029
CRS Report for Congress
Received through the CRS Web
New Medicare Agency Provisions of S. 1,
as Passed by the Senate,
and H.R. 1, as Passed by the House
July 25, 2003
Jennifer Boulanger
Specialist in Social Legislation
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

New Medicare Agency Provisions of S. 1, as Passed by
the Senate, and H.R. 1, as Passed by the House
Summary
On June 27, 2003, the Senate passed the Prescription Drug and Medicare
Improvement Act of 2003 by a vote of 76-21. Later that same evening, the House
passed the Medicare Modernization and Prescription Drug Act of 2003 by a recorded
vote of 216-215 with one voting present.
Both bills would create a new agency within the Department of Health and
Human Services (HHS) to administer the new prescription drug benefit under the
new Part D of Medicare and the MedicareAdvantage program under Part C (formerly
the Medicare+Choice program). H.R. 1 would also have the new agency administer
the new Enhanced Fee-For-Service program under the new Part E of Medicare. In
general, the new agency provisions found in the Senate and House bills are similar.
Both bills would establish a presidentially-appointed Administrator who would
report directly to the Secretary of HHS and who would exercise all powers and duties
of the agency. The Administrator would negotiate, enter into, and enforce contracts
with MedicareAdvantage plans (and Enhanced Fee-For-Service, in H.R. 1) and with
the prescription drug plan offerors.
The new agency would also be responsible for informing beneficiaries about the
Medicare program (not just Parts C and D (and E)) and beneficiary appeal rights. S.
1 would also require the new agency to enroll beneficiaries into Medicare – a
responsibility currently handled by the Social Security Administration.
The Administrator would hire staff for the new agency. S. 1 would leave current
executive branch civil service laws in place. H.R. 1 would waive some personnel
requirements for the new agency – three of the 46 chapters of Title 5 would be
waived, in part. Specifically, sections of Chapters 31, 51 and 53 of Title 5 of the
U.S. Code that address the authority for employing staff, classification of positions
and pay rates and systems would not apply to the new agency. The new agency
would still be required to establish a plan for classifying positions (retained Section
5101) and for adhering to the general policy that federal pay be based on specified
principles (retained Section 5301).
S. 1 would fund the administrative expenses for implementing Part D through
mandatory appropriations, with the remainder of the new agency’s responsibilities
funded by the annual appropriations process. H.R. 1 would make the new agency’s
entire administrative funding subject to the annual appropriations process. The
Congressional Budget Office (CBO) estimates that the administrative costs to the
government for the administrative tasks implementing Parts C, and D (and E in H.R.
1) would be $3.6 billion from FY2004 through FY2008 and $10 billion from FY2004
through FY2013. However, because, depending upon the bill, most or all of these
funds are subject to appropriations, the appropriations committees have discretion to
determine the actual level at which these new requirements would be funded. This
report will be updated as events warrant.

Contents
Side-by-Side Comparison of the New Agency Provisions of
S. 1 and H.R. 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Establishes New Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Deputy Administrator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Chief Actuary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Duties and Administrative Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Staffing and Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Office of Beneficiary Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Beneficiary Ombudsman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Medicare Advisory Board (Board) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Authorizing Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Toll-free Number (1-800-medicare) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Medicare Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
CMS Administrator Pay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

New Medicare Agency Provisions of S. 1, as
Passed by the Senate, and H.R. 1, as
Passed by the House
On June 27, 2003, the Senate passed the Prescription Drug and Medicare
Improvement Act of 2003 by a vote of 76-21. Later that same evening, the House
passed the Medicare Modernization and Prescription Drug Act of 2003 by a recorded
vote of 216-215 with one voting present.
Both bills would create a new agency within the Department of Health and
Human Services (HHS) to administer the new prescription drug benefit under the
new Part D of Medicare and the MedicareAdvantage program under Part C (formerly
the Medicare+Choice program). H.R. 1 would also have the new agency administer
the new Enhanced Fee-For-Service program under the new Part E of Medicare. The
current Centers for Medicare and Medicaid Services (CMS) would continue to
administer fee-for-service Medicare, Medicaid, and other duties that have been
assigned to CMS. In general, the new agency provisions found in the Senate and
House bills are very similar.
S. 1 and H.R. 1 would establish a presidentially-appointed Administrator who
would report directly to the Secretary of HHS and who would exercise all powers and
duties of the agency. The Administrator of the new agency would negotiate, enter
into, and enforce contracts with MedicareAdvantage plans (and Enhanced Fee-For-
Service, in H.R. 1) and with the prescription drug plan offerors. The authority to
promulgate regulations for these new programs would be given to the new
Administrator (rather than the Secretary who currently is responsible for all Medicare
regulations and would continue to be responsible for fee-for-service regulations
under both bills). The new agency would also be responsible for informing
beneficiaries about the Medicare program (not just Parts C and D (and E)) and
beneficiary appeal rights. S. 1 would also require the new agency to enroll
beneficiaries into Medicare – a responsibility currently handled by the Social Security
Administration.
In both bills, the Administrator of the new agency would be appointed by the
President with the advice and consent of the Senate. In S. 1, the term of the
appointment would be 5 years; in H.R. 1 the term would be 4 years. The
appointment and term of office of the Deputy Administrator of the new agency would
vary by bill: S. 1 would have him be appointed by the Administrator for a term of 5
years; in H.R. 1, he would be appointed by the President with the advice and consent
of the Senate for a term of 4 years. As a result of the term appointments, the
Administrator and Deputy Administrator could bridge changes in Presidential
Administrations. In contrast, the Administrator of CMS is appointed by the President
and serves at his pleasure. The Deputy Administrator of CMS is not a Presidential

CRS-2
appointment. Both bills would set compensation for the new agency Administrator
at level III of the executive schedule and increase the compensation for the
Administrator of CMS from level IV to level III of the executive schedule.
In general, both bills seek to give the new agency some flexibility with pay rates
for personnel. Many observers believe that the federal employment system is
cumbersome and incapable of attracting and retaining staff with the outside
experience desired in running more competitive-style programs. However, it is
unclear how much of the flexibility would be implemented in a new agency. In
recent experience, the Department of Homeland Security was given more expansive
flexibility (many chapters of Title 5 were waived including Chapters 31, 51, and 53)
than the new agency would be and, according to a news report, may be considering
retaining the general schedule system because it is an existing classification system
with appeal rights and its use avoids disruption caused by switching to a new system.1
S. 1 would retain current executive branch civil service laws for the new agency
but would require the Administrator to establish the rate of pay for new agency staff
(up to a maximum rate of the highest rate of basic pay for the senior executive
service2 (SES)). S. 1 would give the Administrator, with the approval of the
Secretary, authority to employ management staff as determined appropriate.
H.R. 1 would give the new agency flexibility in hiring staff, classifying
positions, and with rates of pay. In general, the Administrator would be able to
establish different payment systems than are used in the executive branch. The new
agency would be exempted from portions of 3 of the 46 chapters of Title 5.
Specifically, sections of Chapters 31, 51 and 53 of Title 5 of the U.S. Code that
address the authority for employing staff, classification of positions and pay rates and
systems would not apply to the new agency. Twelve of the 21 sections of Chapter
31 would be retained: Sections 3102-3108, 3110-3113, 3136m, and 3151.3
1 Tanya Ballard, GovExec.com., “Homeland Security May Retain Standard Pay System,”
July 25, 2003 at [www.govexec.com/dailyfed/0703/072503t1.htm].
2 The highest rate of basic pay for the SES is level 6 (ES-6) and for 2003 that amount is
$134,000. In the Washington-Baltimore area, the locality pay adjustment boosts the pay
rate 12.74%, but pay is capped at level III of the executive schedule (EX-III), so the SES
level 6 is $142,500.
3 The 12 sections of Chapter 31 that would be retained are: 3102, permitting agencies to hire
personal assistants for handicapped employees; 3103, requiring employees to render services
in connection with and for the purposes of the appropriation from which the individual is
paid; 3104, permitting the Director of the Office of Personnel Management (OPM) to
establish, and revise, the maximum number of scientific or professional positions outside
of the General Schedule for carrying out research and development functions; 3105,
requiring agencies to appoint as many administrative law judges (ALJs) as are necessary for
hearings and other such proceedings; 3106, prohibiting agency heads from employing
private attorneys in litigation that is against the agency and requires the matter be referred
to the Department of Justice; 3107, prohibiting the employment of publicity experts unless
specifically appropriated for that purpose; 3108, prohibiting the employment of Pinkerton
Detective Agency employees or employees from similar organizations; 3110, prohibiting
the employment of relatives; 3111, permitting agencies to accept volunteer services of
(continued...)

CRS-3
Subchapter II of Chapter 31 which establishes the senior executive service (SES)
would be among the provisions waived.
All of Chapter 51 would be waived except 5101 which requires a plan for
classifying positions for the purposes of pay rates and ensuring that the principle of
equal pay for substantially equal work will be followed, and that variations in pay
rates will be in proportion to substantial differences in the difficulty, responsibility,
and qualification requirements. Section 5101 also requires grouping employees by
classes and grades in accordance with their duties, responsibilities, and qualifications.
Provisions that would be waived include Section 5104 that establishes the general
schedule (GS) as the basic classification system for positions covered under Chapter
51 and the requirement that agencies place each position in its appropriate class and
grade.
All of Chapter 53 would be waived except 5301 which establishes the general
policy that federal pay under the general schedule be based on four principles: equal
pay for substantially equal work within each local pay area; pay distinctions be
maintained within local pay areas for work and performance distinctions; pay rates
be comparable with non-federal pay rates for the same levels of work within the same
local pay area; and existing pay disparities between federal and non-federal
employees should be completely eliminated. Compensation would be capped at level
IV of the executive schedule.4 Provisions that would be waived include subchapter
II which establishes the executive schedule that is used to pay executive positions
other than the SES as well as the pay bands for the executive schedule, subchapter
III which defines the GS pay rates, and subchapter VIII which establishes pay for the
SES.
Both bills would establish an Office of Beneficiary Assistance within the new
agency to perform outreach and educational activities for beneficiaries. This office
would be required to disseminate programmatic and appeals information on the entire
Medicare program to Medicare beneficiaries. S. 1 would further require the office
to carry out functions relating to Medicare beneficiaries including eligibility
determinations and enrolling individuals in Medicare – a responsibility currently
performed by the Social Security Administration. Both bills would establish a
Medicare Beneficiary Ombudsman – S. 1 within the Office of Beneficiary
Assistance and H.R. 1 within HHS.
Both bills would create an advisory board to advise, consult with, and make
recommendations to the Administrator regarding Parts C and D (and E in H.R. 1) of
Medicare. Reports by the board would be exempt from any kind of review within the
Executive Branch and would be published in the Federal Register. H.R. 1 would
3 (...continued)
students; 3112, giving hiring preferences to veterans; 3113, barring federal re-employment
if the employee is convicted of certain specified crimes relating to bribery of a public
official and drug related crimes; 3136m, no such provision; and 3151, permitting the
Attorney General to establish a personnel system for senior executives in the FBI and DEA.
4 Level I of the executive schedule is the highest level (EX-I) and pay for 2003 is $171,900.
2003 pay for EX-IV is $134,000.

CRS-4
exempt the board from all of Chapters 31, 51, and 53 of Title 5 of the U.S. Code in
the appointment and compensation of board staff.
S. 1 would fund the administrative expenses for implementing Part D through
mandatory appropriations, with the remainder of the new agency’s responsibilities
funded by the annual, discretionary appropriations process. H.R. 1 would make the
new agency’s entire administrative funding subject to annual appropriations. The
Congressional Budget Office (CBO) estimates that the administrative costs to the
government for the administrative tasks implementing Parts C, and D (and E in H.R.
1) would be $3.6 billion from FY2004 through FY2008 and $10 billion from FY
2004 through FY2013. However, because, depending upon the bill, most or all of
these funds are subject to appropriations, the appropriations committees have
discretion to determine the actual level at which these new requirements would be
funded.
This report will be updated as events warrant.

CRS-5
Side-by-Side Comparison of the New Agency Provisions of S. 1 and H.R. 1
New Agency to Administer Parts C and D
Provisions
Current Law
S. 1
H.R. 1
Establishes New
No provision. The authority for
Section 301. A new section, Section 1808(a) would be
Section 801. A new section, Section 1809(a),
Agency
administering the Medicare program
created which would establish the Center for Medicare
which would establish the Medicare Benefits
resides with the Secretary of Health and
Choices (CMC) within the Department of Health and
Administration (MBA) within HHS.
Human Services. The Secretary
Human Services (HHS) by March 1, 2004. CMC would
originally created the agency that
be required to be separate from the Centers for Medicare
administers the Medicare and Medicaid
and Medicaid Services (CMS).
programs in 1977 under his
administrative authority.
Administrator
No provision. The CMS Administrator
Section 1808(b)(1). CMC would be headed by an
Section 1809(b)(1). Same as S. 1, except that the
is appointed by the President with the
Administrator who was appointed by the President with
term of the Administrator’s appointment would be
advice and consent of the Senate.
the advice and consent of the Senate for a 5-year
4 years.
Compensation for the Administrator of
appointment. Compensation would be at level III of the
CMS is set at the EX-IV level. The
Executive Schedule. The Administrator would have the
Secretary has the authority to prescribe
authority to prescribe such rules and regulations under
all Medicare regulations.
the Administrative Procedure Act as necessary to carry
out the functions of CMC.
Deputy
No provision.
Section 1808(b)(2). The CMC Deputy Administrator
Section 1809(b)(2). The MBA Deputy
Administrator
would be appointed by the Administrator. Compensation
Administrator would be appointed by the
would be at level IV of the Executive Schedule. The
President and with the advice and consent of the
Deputy Administrator would be appointed for 5 years.
Senate. Compensation would be the same as S.
1. The term of the appointment would be 4 years.

CRS-6
Provisions
Current Law
S. 1
H.R. 1
Chief Actuary
The Medicare statute requires that the
No provision.
Section 1809(b)(3). Would establish a Chief
CMS administrator appoint a Chief
Actuary position that reports directly to the
Actuary who reports directly to such
Administrator. Only removal for cause would be
administrator and is paid at the highest
permitted. Compensation would be at the highest
rate of basic pay for the Senior
level of the Senior Executive Service basic pay
Executive Service.
schedule.
Duties and
No provision.
Section 1808(c). The Administrator would carry out
Section 1809(c). Substantially the same as the
Administrative
parts C and D including negotiating, entering into, and
Senate but also includes part E. Rather than
Provisions
enforcing contracts with Medicare+Choice plans, Section
“eligible entities” uses term “[prescription drug
1876 cost contracts, and eligible entities for offering
plan] PDP sponsors.” Cost contracts are not
prescription drug plans. The Administrator would
included in the list of duties. Also would require
conduct demonstrations under parts C or D or any other
the Administrator to implement the prescription
duty provided for under those parts.
drug discount card.
In administering the drug benefit, the Administrator
The report to Congress and the President would
would be prohibited from requiring a particular
be required to address the administration of parts
formulary or instituting a price structure for the payment
C, D, and E during the previous fiscal year.
of covered drugs; interfering with negotiations between
eligible entities and Medicare+Choice organizations and
drug manufacturers, wholesalers, or other suppliers of
covered drugs; and otherwise interfering with the
competitive nature of providing drug coverage through
such entities and organizations. By March 31 of each
year, the Administrator would be required to report to
Congress and the President on the administration of the
voluntary prescription drug delivery program during the
previous fiscal year.

CRS-7
Provisions
Current Law
S. 1
H.R. 1
Staffing and
No provision.
Section 1808(c)(2). The Administrator, with
the
Section 1809(c)(2). The Administrator, with the
Compensation
approval of the Secretary, would be able to employ
approval of the Secretary, would be permitted to
management staff as determined appropriate. Managers
waive Chapter 31 of Title 5 of the United States
would be required to have demonstrated expertise in the
Code, except for Sections 3102 through 3108,
review, negotiation, and administration of health care
3110 through 3113, 3136m and 3151a in hiring
contracts; the design of health care benefit plans;
officers and employees.
actuarial sciences; compliance with health plan contracts;
and consumer education and decision making.
Flexibility for the compensation of MBA staff
would be provided by waiving Chapter 51 (except
The Administrator would be required to establish the rate
5101)b and Chapter 53 (except Section 5301) of
of pay for CMC staff. The maximum rate of
Title 5.c Compensation would be capped at level
compensation would be limited to the highest rate of
IV of the Executive Schedule.
basic pay for the Senior Executive Service.
The number of full-time equivalent (FTE)
employees in the CMC would be limited to the
number performing the function in CMS on the
date of enactment.
Office of Beneficiary
Medicare entitlement and enrollment
Section 1808(d)(1). The Secretary would be required to
Section 1809(d)(1). The Secretary would be
Assistance
activities are performed by the Social
establish within CMC an Office of Beneficiary
required to establish within the MBA an Office of
Security Administration with funding
Assistance to carry out functions relating to Medicare
Beneficiary Assistance to coordinate functions
from the Medicare Trust Fund.
beneficiaries under Title XVIII including eligibility
relating to outreach and education of Medicare
Information dissemination regarding
determinations and enrolling individuals in Medicare.
beneficiaries (under parts A, B, C, D, and E). The
the Medicare program (using the
The Office would be a separate operating division within
Office would be a separate operating division
Medicare handbook, 1-800-Medicare,
CMC. This office would also be required to disseminate
within MBA. This office would also be required
www.Medicare.gov, and other
programmatic and appeals information on the entire
to disseminate programmatic and appeals
methods) is performed by CMS (under
Medicare program to beneficiaries.
information on the entire Medicare program to
delegation from the Secretary).
beneficiaries.

CRS-8
Provisions
Current Law
S. 1
H.R. 1
Beneficiary
No provision.
Section 1808(d)(3)(A). A Medicare Ombudsman would
Section 923(b). In a new Section 1810, a
Ombudsman
be created within the Office of Beneficiary Assistance.
Medicare beneficiary ombudsman would be
The Ombudsman would receive complaints, grievances,
created within HHS appointed by the Secretary.
and requests for information and assist beneficiaries with
The specific requirements are substantially the
respect to complaints, grievances, and requests regarding
same as in S. 1. The Secretary would be required
any aspect of the Medicare program (parts A, B, C and
to appoint the ombudsman within 1 year from the
D). Also requires assistance to beneficiaries with
date of enactment.
problems relating to disenrollme n t fr om
MedicareAdvantage plans under part C or prescription
drug plans under part D. Further requires an annual
report to the Congress, the Secretary, and the Medicare
Competitive Policy Advisory Board. Requires the
ombudsman to coordinate with state medical
ombudsman programs and with state-and community-
based consumer organizations regarding Medicare
information and outreach to beneficiaries.
Authorization for ombudsman appropriation is part of
the overall authorization of appropriations for such sums
as are necessary for this section creating the CMC. [Sec.
1808(f).]
Medicare Advisory
No provision.
Section 1808(e)(1). The Medicare Competitive Policy
Section 1809(e)(1). Same as S. 1 except the
Board (Board)
Advisory Board would be established within CMC to
Board is called the Medicare Policy Advisory
advise, consult with, and make recommendations to the
Board and Medicare part E would be included.
Administrator regarding parts C and D of Medicare. The
Also, the board would be permitted to hire and
Board would be required to submit reports to Congress
compensate staff without regard to Chapters 31,
and the Administrator regarding the administration of
51, and 53 of Title 5 of the U.S. Code.
parts C and D, as the Board determines appropriate. The
reports would be published in the Federal Register and
could include recommendations for legislative or
administrative changes to improve the administration of
parts C and D. Reports would be submitted directly to
Congress and would be exempt from review by any
executive branch entity [such as HHS or the Office of
Management and Budget].

CRS-9
Provisions
Current Law
S. 1
H.R. 1
Not later than 90 days after the Board submits a report,
the Administrator would be required to submit to
Congress and the President an analysis of the
recommendations made by the Board and to publish the
analysis in the Federal Register.
The Board would consist of seven members with three
appointed by the President, two by the Speaker, two by
the President pro tempore. The members would be
required to have experience in health care benefits
management and could not be employees of the federal
government.
The Board chairperson would appoint a director who
would appoint staff as the director considers appropriate,
with the approval of the Board. The Board would be
able to contract with agencies or persons without regard
to Section 3709 of the Revised Statutes.
Authorizing
No provision.
Section 1808(f). Appropriations from the Medicare trust
Section 1809(f). Same as S. 1 Section 1808(f).
Appropriations
funds of such sums as needed to carry out this section
H.R. 1 does not contain language making any
would be authorized. New Section 1860D-25 (in Title
administrative expenses mandatory.
I) would make the administrative costs associated with
implementing new Part D mandatory and not subject to
appropriations.
Toll-free Number (1-
The Secretary is required to provide
Section 301(b). The provision would also require that
Section 923(e). Same as S. 1. Also would
800-medicare)
information on Medicare benefits via a
the Secretary provide 1-800-Medicare as a means by
require the General Accounting Office (GAO) to
toll-free telephone number. Medicare
which individuals seeking information about or
monitor the accuracy, consistency, and
benefit information is provided at 1-
assistance with Medicare can receive assistance. The
sufficiency of information provided to
800-Medicare. Claims information can
Secretary would be required to route calls to the
beneficiaries through 1-800-Medicare and report
be obtained through a 1-800 number
appropriate entity to provide the assistance or
to Congress.
maintained by the beneficiary’s
information. The 1-800-Medicare number would be
Medicare contractor and the
required to be published in the Medicare handbook in
contractor’s toll-free number is
place of the listing of phone numbers of individual
published in the Medicare handbook.
contractors.

CRS-10
Provisions
Current Law
S. 1
H.R. 1
Effective Date
No provision.
Section 1808(a). The Secretary would be required to
Section 801(b). Section 1808 would take effect
establish CMC by March 1, 2004.
on the date of enactment. The Administrator
would carry out enrollment, make eligibility
determinations, and carry out parts C and E of
Medicare beginning January 1, 2006. The
Secretary would be required to provide for the
conduct of any responsibilities of the
Administrator of MBA before the Administrator’s
appointment.
Medicare Trustees
The Board of Trustees of the Medicare
Section 302(a). The Administrator of CMC would
Section 801(c)(1). The Administrator of MBA
Trust Funds is composed of the
serve as Co-Secretary of the Board of Trustees of the
would be a member of the Medicare Trust Funds
Commissioner of Social Security, the
Medicare Trust Funds.
Board .
Secretary of the Treasury, the Secretary
of Labor, and the Secretary of Health
and Human Services and two members
of the public. The Administrator of the
Centers for Medicare & Medicaid
Services serves as the Secretary of the
Board of Trustees.
CMS Administrator
The pay level for the CMS
Section 302(b). The pay level for the Administrator of
Section 801(c)(2). Same as S. 1 but would begin
Pay
Administrator is at level IV of the
CMS would increase to level III of the Executive
January 1, 2004.
Executive Schedule.
Schedule, beginning March 1, 2004.
a Title 5 of the U. S. Code contains the provisions of law governing personnel employed by the executive branch as well as establishing the salaries for all three branches of the federal
government. Chapter 31 addresses authority for employment. The 12 sections of Chapter 31 that would be retained are: 3102, permitting agencies to hire personal assistants for
handicapped employees; 3103, requiring employees to render services in connection with and for the purposes of the appropriation from which the individual is paid; 3104, permitting
the Director of the Office of Personnel Management (OPM) to establish, and revise, the maximum number of scientific or professional positions outside of the General Schedule for
carrying out research and development functions; 3105, requiring agencies to appoint as many administrative law judges (ALJs) as are necessary for hearings and other such proceedings;
3106, prohibiting agency heads from employing private attorneys in litigation that is against the agency and requires the matter be referred to the Department of Justice; 3107, prohibiting
the employment of publicity experts unless specifically appropriated for that purpose; 3108, prohibiting the employment of Pinkerton Detective Agency employees or employees from
similar organizations; 3110, prohibiting the employment of relatives; 3111, permitting agencies to accept volunteer services of students; 3112, giving hiring preferences to veterans;
3113, barring federal re-employment if the employee is convicted of certain specified crimes relating to bribery of a public official and drug related crimes; 3136m, no such provision;
and 3151, permitting the Attorney General to establish a personnel system for senior executives in the FBI and DEA. Among the eight sections that would be waived are those
establishing the Senior Executive Service.

CRS-11
b Chapter 51 contains requirements about classification of jobs and establishes the general schedule. Section 5101 requires a plan for classifying positions for the purposes of pay rates
and ensuring that the principle of equal pay for substantially equal work will be followed, and that variations in pay rates will be in proportion to substantial differences in the difficulty,
responsibility, and qualification requirements. Section 5101 also requires grouping employees by classes and grades in accordance with their duties, responsibilities, and qualifications.
c Chapter 53 addresses pay rates and systems and establishes the executive schedule and general schedule pay rates. Section 5301, which would be retained, establishes the general
policy that federal pay under the general schedule be based on four principles: equal pay for substantially equal work within each local pay area; pay distinctions be maintained within
local pay areas for work and performance distinctions; pay rates be comparable with non-federal pay rates for the same levels of work within the same local pay area; and existing pay
disparities between federal and non-federal employees should be completely eliminated