Every time I look at these charts that run, for example, in U. S. News & World Report, they show at the very bottom of actual takehome pay in the terms of purchasing power, first at the very bottom, retired Federal employees and next, active Federal employees. Now, I do not know exactly how accurate these charts in U. S. News & World Report are but I have every reason to believe, unless they were substantially correct, they would be subject to very serious challenge and always at the very bottom in terms of purchasing power of their dollar, are retired Federal employees and at the next echelon, active Federal employees. I do not see how that can continue. Mr. MERRIAM. That of course is what you are meeting about today and we can only give you our best recommendation and analysis of the situation as we see it. There are, in our opinion, sufficient reasons on both of these scores-inflationary tendencies and inequities and conflicts to warrant recommending against an increase at this time. Senator NEUBERGER. Well, we certainly disagree on it, I will say that about it. Mr. Kerlin, do you have any more questions? Mr. KERLIN. Only one observation: A great deal has been said about the many pay systems in the Government. I think that has been overemphasized. Government has three basic pay systems: The postal pay system, Classification Act, and the wage-board system. Now, true, the Medical Division of the Veterans' Administration, the Foreign Service, and a few groups here and there are paid differently but basically we have three systems. One-third of those are under the wage board and are paid wages in accordance with industry. Two-thirds of the Federal family's pay is fixed by Congress and those two-thirds, presumably, in accordance with the reports, have not kept pace. These little side systems do not have a great deal of influence as they do not have a great number of employees. That is all. Senator NEUBERGER. Senator Morton, do you have any other questions of Mr. Merriam? Senator MORTON. No; I have not. I suppose, Mr. Chairman, that your subcommittee will get figures so that we, instead of arguing here the way we are, we will know. We should have a chart or a graph or something. I remember the U. S. News article. I think we should get something directly from those concerned so we can approach this thing more intelligently. (The chart mentioned above was subsequently submitted by E. C. Hallbeck and appears in his statement.) I also want to say, sir, in view of Senator Langer not being able to be here, the minority member, Senator Carlson, asked me to sit in. I appreciate your courtesy, sir. Senator NEUBERGER. We are sorry, of course, Senator Langer is not here but we are extremely appreciative of your presence and we are grateful to you for coming and sitting in with us. Thank you so much, Mr. Merriam. This is not a partisan question. We are trying to get the facts and do what is fair. I would just like to say for the record, I am informed by Mr. Kerlin, we do have permission to sit during the session of the Senate, which is now meeting and which began at 11 o'clock. Our next witness will be Mr. Abe McGregor Goff, General Counsel of the Post Office Department. We will be glad to hear from you. Mr. Goff is a former distinguished member of the Congress, as is Mr. Ellsworth, who testified earlier and we are going to try, if we can, to recess around noon or very shortly thereafter. STATEMENT OF ABE MCGREGOR GOFF, GENERAL COUNSEL, POST OFFICE DEPARTMENT; ACCOMPANIED BY E. J. WALSH, ASSISTANT COMPTROLLER, POST OFFICE DEPARTMENT Mr. GOFF. Mr. Chairman, I have some prepared statements here which I will be glad to have distributed. Senator NEUBERGER. Mr. Goff, we are glad you are here. Will you begin. Mr. GOFF. Senator Neuberger, as chairman of this committee, I regard it as a privilege to appear before this subcommittee to present the views of the Post Office Department with respect to S. 27, a bill to increase the rates of compensation of officers and employees in the field service of the Post Office Department. In his report to you, the Director of the Bureau of the Budget advised that legislation increasing generally the salaries of Federal employees was not within the program of the President. Attached to that report was a tabulation of the bills pending before the Senate to which the report specifically related. S. 27 was one of those included in this tabulation. The representative of the Bureau of the Budget, Mr. Merriam, has testified before you and has restated this position. In view of the position of the administration, the Post Office Department will confine its comments to the cost of this bill. We believe that there is in the Congress the executive department, and throughout the Nation, a movement which is designed to reduce, rather than increase the cost of Government and that you will be interested in learning these cost figures. This bill proposes to increase the basic compensation of all postal field employees covered by the Postal Field Service Compensation Act of 1955 which was approved June 10, 1955, except for the position PFS-20. The increases are to be made retroactive to January 1, 1957. The bill proposes to replace completely the salary schedules provided for the postal field service employees, rural carriers, and postmasters at offices of the fourth class. It increases substantially the basic compensation for all employees in all positions and levels except the top level PFS-20. It proposes to reduce the number of automatic steps in tht PFS, that is, postal field salaries; FOS, fourth class; and RCS, rural-class schedules from 7 to 4 for all positions except PFS-20, which is presently a single salary position. With the Postmaster General's report to you dated May 8, 1957, there was transmitted a table showing the estimated annual increase in the cost of operating the postal service under this proposed bill. I respectfully request that the report and the attachment be inserted in the record at this point. Senator NEUBERGER. Without objection, it will be included. (The above-mentioned document follows:) OFFICE OF THE POSTMASTER GENERAL, Hon. OLIN D. JOHNSTON, Chairman, Committee on Post Office and Civil Service, United States Senate. DEAR MR. CHAIRMAN: Reference is made to your request for a report on S. 27, a bill to increase the rates of basic compensation of officers and employees in the field service of the Post Office Department. This measure proposes to increase the basic compensation of all postal field employees covered by the Postal Field Service Compensation Act of 1955, approved June 10, 1955 (39 U. S. C., secs. 1951-1038). The increases would be retroactive to January 1, 1957. The proposed new schedules provide substantial increases in rates for employees in all positions and levels except PFS-20. In his report to the committee on this and other general pay legislation, the Director of the Bureau of the Budget advised that the enactment of general pay increase legislation would not be in accord with the program of the President. It is estimated that the additional per annum costs of this bill to the Post Office Department would approximate $1,039,093,000 beginning with the fiscal year 1958. The additional costs from the effective date, January 1, 1957, to June 30, 1957, would approximate $505,348,000. No additional man-year requirements would be involved. For your information there are attached copies of a schedule which gives a detailed summary of the costs of this legislation. This report has been approved by the Bureau of the Budget. Sincerely yours, MAURICE H. STANS, Deputy Postmaster General. SCHEDULE NO. 1.-Conversion of salary schedule of Public Law 68 to S. 27, postal field service employees SCHEDULE NO. 2.—Conversion of salary schedule of Public Law 68 to 8. 27, rural SCHEDULE NO. 3.-Conversion of salary schedule of Public Law 68 to 8. 27, 4th Mr. GOFF. The total estimated increase in cost of this bill from January 1, 1957, to June 30, 1957, is $505,347,211. The total increase in cost to the Department for the fiscal year 1958 and each of the following years will be at least $1,039,092,828. Mr. Walsh, who accompanies me here, Assistant Comptroller, of the Department, is prepared to answer any question which may go into the detail of these figures. In general, however, you will find from our schedule that the average annual increase for each rural carrier will be $1,731; for all postmasters at fourth-class offices $861. How ever, in the 2 top receipts category the average will be $1,138 and $1,234, respectively. The average increase for other employees in the field service is $1,793. The lowest average increase in this category is $1,695 for employees in the regional offices and post-office supervisors. The highest average increase is $1,990 for employees in the custodial services, supply center, and production and repair units. The basic salaries of substitutes will be increased by approximately 50 percent. This will increase the average rate of pay of substitutes by about $1,820. Mr. Chairman, that completes my statement and I thank you very much. I think you will probably want to talk to Mr. Walsh and ask some questions of him in regard to the cost figures that have been submitted here. Senator NEUBERGER. Senator Morton, do you have any questions? Senator MORTON. One thing, Mr. Goff, could you have someone, or perhaps Mr. Walsh has it this morning, but if not, could you have. someone prepare for us the mean figure, average mean figure that a postal employee received in January 1953 as compared to June 1956 or whatever your most recent figure is? Mr. WALSH. We do not have the exact figures here but we will get them. (The information requested follows:) Hon. RICHARD L. NEUBERGER, POST OFFICE DEPARTMENT, May 31, 1957. Chairman, Subcommittee on Federal Compensation, Committee on Post Office of Civil Service, United States Senate, Washington 25, D. C. DEAR MR. CHAIRMAN: During my appearance as a witness at the hearing on May 20, 1957, on S. 27, you requested that I file with the committee a comparison between the increases in cost of living and the salary increases given to postal employees since 1950 and a statement informing the committee as to what salary increase for postal employees would be acceptable to the Department at this time. You also requested that the average salaries of employees be stated as of January 1953 and the most recent data that such is available. On behalf of the administration, the Bureau of the Budget concluded that general salary increases were not advisable. As indicated by the Bureau of the Budget, added payroll expenditures of any magnitude will create additional economic pressure, and consideration of overall fiscal policy compel the conclusion that general pay increases at this time are not advisable. In addition, as you know, a study of the wage situation is being made by the President's committee. The study, as we understand it, will provide the necessary data on the relationship of the various pay systems to form the basis for recommendations concerning legislation that may be needed. Until the overall study has been completed, the Department is not in a position to make recommendations as to any changes in existing salary rates. On June 30, 1953, there were 125,411 regular clerks and mailhandlers on the rolls. The average salary was $4,009. On June 30, 1956, there were 130,551 regular clerks and mailhandlers on the rolls, and the average salary of these positions was $4,464. This is an increase of 8.9 percent. On June 30, 1953, there were 87,537 regular city delivery carriers on the rolls. The average salary was $4,069. On June 30, 1956, there were 94,692 regular carriers on the rolls, and the average salary for these positions was $4,383, an average increase of 7.7 percent. The average salary of carriers during the period was affected by the relatively large number of new positions to which appointments were made at lower grades. Since 1950, the Consumer Price Index, issued by the United States Department of Labor, has advanced 15.7 percent from 102.8 points to 118.9 points. Since 1950 the beginning salaries of post office clerks and letter carriers have been increased |