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Government Workers See Benefit in Federal Buyout Program

March 31, 1994

WASHINGTON (AP) _ A plan offering federal workers up to $25,000 to quit their jobs could mean fewer bosses and less bureaucracy by trimming middle-management positions, unions say.

That was one of the unions’ goals when they suggested an employee buyout program last year when Vice President Al Gore was studying the federal structure for his National Performance Review.

″We said one of the problems with the current system is the cumbersome layers of middle management,″ said Diane Witiak of the American Federation of Government Employees, which has 700,000 members.

President Clinton signed legislation Wednesday allowing buyouts as part of a program to reduce the federal payroll, currently just over 2 million, by about 273,000 workers over the next five years. Some workers would be offered up to $25,000 to resign or retire early. Between 60,000 and 100,000 people are expected to accept.

″I’ll leave this job tomorrow. I’m gone,″ said Jose Lopez, a docket clerk in federal court in New York City. ″I’m here seven years and all I have is debt.″

But Lopez said he would definitely leave only if he were entitled to the $25,000 buyout and it is tax-free.

With a $33,000 annual salary and seven years on the job, Lopez would be entitled to about $4,500. He would have to pay taxes on it.

″After all the rhetoric about cutting the size and cost of government, our administration has done the hard work and made the tough choices,″ Clinton said in a statement from Coronado, Calif., where he is vacationing.

Some government managers said they did not expect the offer to prompt a mass exodus of government workers.

″My expectation is people who were considering retirement anyway certainly would want to take a look at it. It might speed up their timetable,″ said Jim Sims, district manager of the Bureau of Land Management in Tulsa, Okla. ″I don’t really see a lot of incentive for people with substantial time left in their careers.″

Pat Schmidt, a federal probation officer in Bismarck, N.D., said he would not be interested in the buyout.

″I love my job,″ Schmidt said. ″I think the people who are going to take advantage of it are probably the ones who are closest to retirement.″

The goal of the legislation is to trim the fulltime federal work force to 1.88 million by the end of fiscal year 1999 in a more compassionate and less costly way than involuntary layoffs, which would require severance pay.

″Federal agencies may not have to resort to disruptive, inhumane and demoralizing reductions in force to reduce unemployment levels,″ said Jim King, director of the Office of Personnel Management.

The government’s current severance package gives a worker one week of pay for each of the first 10 years of service and two weeks of pay for each year beyond 10 years.

Under that formula, a worker with 15 years of service who makes $500 a week would receive $10,000. While the severance package for a 20-year employee paid $1,400 a week would be $42,000, the buyout would be the maximum $25,000. The money would be paid in one lump sum. Only workers with 12 months continuous service would be eligible for a buyout.

Agency heads can target buyouts only at occupational categories, offices and work units, not specific individuals.

Sheila Velazco, president of the 150,000-member National Federation of Federal Employees, said the program was ″very good for federal workers and for the federal government as a whole because it allows agencies to manage how they are going to achieve cutbacks.″

The buyout plan gained wide bipartisan support in Congress after it became evident that the reduction goals would not be reached through other means like attrition or involuntary dismissals. Congressional investigators concluded that minorities and women would be disproportionately affected by layoffs.

The buyouts will be available until March 31, 1995. An existing program at the Defense Department has reduced its work force by about 30,000.

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