February 28, 2006

Local 1923 News Release

Congratulations to all bargaining unit Department of Information Management (DOIM) employees located at the army base in Ft. Detrick, Maryland. They now have their very first negotiated Labor/Management Agreement.

DOIM officials were initially hesitant to begin negotiations last July because of pending National Security Personnel System (NSPS) reform. After the Federal Labor Relations Authority ordered contract negotiations to begin, both parties agreed to sit down at the table and work out a contract.

Negotiations were completed and an agreement to ratify the contract took place on February 28, 2006.

DOIM employees now have a contract to ensure that they are being treated fairly and equitably on the job.

Kudos goes to AFGE 4th District National Representative and Chief Negotiator, Carl Gentile, Local 1923 Vice President, Fred Holley and Local 1923 Representatives, Jill Rothhaupt and Mike Reese for their commitment and hard work at the negotiation table.

-Jody Perez

February 27, 2006

Judge overturns Defense labor relations reforms

By Karen Rutzick
Source: Gov Exec.com
A judge ruled Monday that the Defense Department's new personnel system unlawfully diminishes collective bargaining, blocking the labor relations portion of the system from moving forward.

Judge Emmet Sullivan of the U.S. District Court for the District of Columbia wrote in his decision that the department's regulations went beyond congressional intent.

"The design of these regulations appears to rest on the mistaken premise that Congress intended flexibility to trump collective bargaining rights," Sullivan said.
 
In the 2004 Defense authorization bill, Congress granted the department authority to create a new human resources system, based on the notion that the current system was too rigid and outdated to respond with agility to modern threats of terrorism.

The Pentagon issued regulations for its National Security Personnel System in November 2005, and a coalition of unions quickly filed a lawsuit over the labor relations portion of the plan.

Much of Sullivan's decision echoed, and even quoted from, an August 2005 decision issued by fellow District Judge Rosemary Collyer on the Homeland Security Department's similarly revamped labor relations system.

Collyer ruled that the DHS system was illegal because the department had the ability to override collective bargaining agreements by releasing so-called implementing issuances or documents from high-level officials amending the rules. Sullivan found that the Pentagon's system was similar enough to DHS' that much of Collyer's ruling applied.

"As was the case in [the DHS decision], this court concludes that . . . the new rule fails to ensure even minimal collective bargaining rights," Sullivan said. "As in [the DHS case], the regulations concerning management rights fail in this case because 'any collective bargaining negotiations pursuant to its terms are illusory: the secretary retains numerous avenues by which s/he can unilaterally declare contract terms null and void.' "

Sullivan went beyond Collyer's ruling in one area: He knocked down a new internal labor relations board, which would investigate and decide upon labor-management disputes in place of the governmentwide Federal Labor Relations Authority.

Collyer let DHS keep its board, but Sullivan ruled that the National Security Labor Relations Board, whose members would be appointed by the Defense secretary, "does not satisfy Congress' requirement for an 'independent third party' to review labor-management disputes."
Sullivan also ruled against the NSPS process for appealing personnel actions such as demotions, calling it "the antithesis of fairness." The judge cited the department's ability to reverse an appeal if it is found to affect the national security mission.

After Collyer issued her ruling, the Pentagon changed the standards by which the Merit Systems Protection Board could mitigate the penalty for employee misconduct. Originally the Pentagon followed DHS' lead and said the MSPB could not modify the department's penalties unless the action was found to be "wholly without justification." After the DHS ruling, the department changed its standard to "totally unwarranted in light of all pertinent circumstances."

But the change did not convince Sullivan: "The 'totally unwarranted' standard merely provides further evidence that this process fails to provide employees with fair treatment," he said.

Sullivan did rule in favor of the Pentagon in two areas. The unions argued that the department failed to meet its obligation to collaborate with them in creating the system. Sullivan said the department followed the law, however.

"While defendants may not have met Congress' requirements with enthusiasm, the court finds no evidence that defendants acted in bad faith," Sullivan said, citing numerous meet-and-confer sessions and the public comment period.

Also, the unions tried to argue that the department never had authority to broadly revamp the labor relations system beyond a couple of specific changes expressly stated by Congress. Sullivan found, though, that the "language of the statute" shows that "Congress clearly authorized defendants to establish a labor relations system that modifies" the current one.

Sullivan blocked implementation of the adverse action and appeals section of NSPS permanently, but he invited the government to submit a new labor-management relations proposal that complies with his ruling.

Both sides also have the right to appeal the parts of the decision that went against them, and both sides said their lawyers are reviewing the ruling to determine next steps.

In the DHS case, both sides chose to appeal unfavorable aspects of Collyer's decision. Lawyers had until Monday to file briefs in the appellate court, which will hear oral arguments April 6.

 

February 27, 2006

NSPS' LABOR COMPONENTS STRUCK DOWN
Source: fednews-online

A federal judge has ruled that various parts of the Department of Defense's National Security Personnel System violate the law that created the pay-for-performance based personnel system.

U.S. District Court Judge Emmet Sullivan issued a ruling Monday ordering DoD to halt implementation of the system's adverse actions, appeals and labor-management relations subparts.

NSPS is a performance-based human capital system that would affect approximately 700,000 DoD civilian employees pay and classification, performance management, hiring, workforce shaping, disciplinary matters, appeals procedures and labor-management relations.

NSPS was scheduled to be implemented in Spirals, with Spiral 1.1 slated to begin April 30. That start date is now in jeopardy.

"Our attorneys are reviewing Judge Sullivan's decision at this stage to determine what our next steps should be," said NSPS spokesperson Joyce Frank.

In February 2005, a coalition of unions, spearheaded by the American Federation of Government Employees, filed a suit that argued that DoD had not complied with Congressional intent. (NSPS was created in DoD's FY 2004 budget.)

Sullivan ruled in DoD's favor in two of the five contested issues: DoD satisfied its statutory obligation to collaborate with the unions and DoD legally departed from chapter 71 of the Federal Labor Relations Statute. Sullivan, however, found credence in three of AFGE's arguments:

* NSPS fails to ensure collective bargaining. DoD "eviscerated collective bargaining rights with regulations nearly identical to those invalidated by [NTEU v. Chertoff], despite virtually identical requirements by Congress that each human resources management system ensure collective bargaining," said Sullivan, whose opinion borrowed heavily from the recent case against the Department of Homeland Security's new personnel system, MaxHR. (See DHS ON MAXHR: WE'RE NOT DILLY-DALLYING http://www.fednews-online.com/view_publication.aspx?publicationId=8653.)

* The National Security Labor Relations Board does not meet Congress' requirement for "independent third party review" of labor relations decisions. Sullivan stated that though NSLRB decisions regarding unfair labor practices, artibtral awards and negotiability disputes are subject to Federal Labor Relations Authority' review, the Board, as currently constructed, does not have authority to decide negotiation impasses. "This is a crucial component of any third party's scope of review and Congress required that it be conducted by an independent third party," said Sullivan.

* The process for appealing adverse actions fails to provide employees with "fair treatment", as required by Congress. In its current form, NSPS would allow DoD to modify administrative judges' decisions, establish a "totally unwarranted" standard for appeal and impose guidelines on the Merit Systems Protection Board ability to issue penalties and establish "mandatory removal offenses" enforceable at the Defense Secretary's "discretion", among other stipulations. "Each of the regulations challenged by [AFGE] demonstrates that the appeals process is the antithesis of fairness," said Sullivan.

Sullivan argued that since the contested issues could not be severed from the subparts governing adverse actions and appeals, those subparts can not be implemented. He also stated that if DoD could strip the "offending provisions", from the labor-management relations subpart, the court would rehear the argument.

"Ironically, Judge Sullivan's ruling affirms AFGE's position on the one point we didn't win, whether or not DoD engaged unions in meaningful discussions of the proposed rules. Had DoD engaged in a meaningful meet and confer process, the unions could have helped DoD avoid this stinging defeat in the courts," said AFGE Assistant General Counsel Joe Goldberg.

Sullivan's opinion can be found at http://www.dcd.uscourts.gov/opinions/2006/Sullivan/2005-CV-2183~8:52:23~2-27-2006-a.pdf and his order can be found at http://www.dcd.uscourts.gov/opinions/2006/Sullivan/2005-CV-2183~8:52:

February 21, 2006

SSA Bows to AFGE Pressure on Hurricane Assistance

WASHINGTON —AFGE’s National Social Security Council today announced that the Social Security Administration (SSA) has bowed to AFGE pressure to provide financial support to employees who are victims of Hurricane Katrina.  According to Council President Witold Skwierczynski, because SSA failed in its responsibility to assist employees who were victims of Hurricanes Katrina, Rita and Wilma the Council filed a national grievance against the agency in December of last year.  Under federal guidelines employees of the U.S. government must request disaster assistance from their employer prior to seeking aid from FEMA.  In the days following Hurricane Katrina many federal agencies launched immediate assistance and outreach programs for affected employees, but not SSA. 

“At last the hundreds of Social Security employees and their family members who were impacted by Hurricane Katrina will receive the financial support they need, but were never provided,” said Skwierczynski.  “Now if only the agency will do the same for employees who were victims of Hurricanes Rita and Wilma.  Whether or not Americans receive disaster assistance should never depend on who their employer is or which disaster impacted them.”

SSA announced in a memo issued recently by Deputy Commissioner Dale W. Sopper that the agency would pay employees and members of their immediate family a per diem for up to 30 days and a special subsistence allowance for up to six months following Hurricane Katrina.  Skwierczynski explained that the memo resolves a portion of its national grievance.  Outstanding issues include financial assistance for employees who were impacted by Hurricanes Rita and Wilma; granting of administrative leave; payment of relocation and local commuting expenses; and health and safety concerns.

“While we are pleased that SSA finally has decided to fulfill its financial responsibility to some employees, serious issues have yet to be resolved.  Agencies like the Department of Veterans Affairs, the Department of Defense and the National Aeronautics and Space Administration deserve public accolades for their efforts to assist the public and employees.  It is unfortunate that SSA had to be shamed into taking responsible action,” said Skwierczynski.

February 17, 2006

DoD issues new rules for employee appraisals

By TIM KAUFFMAN

Defense Department supervisors will be required to rate employees based primarily on job objectives set out at the beginning of the year. And they will be rated themselves based on at least one supervisory objective. These are two elements of the department’s newly revised performance management system.

The new plan, outlined to union leaders Feb. 16, was developed because employees who had been trained on the initial plan complained it was too complex and difficult to understand. In January the department announced it would delay launching the new system from February to April 30 to allow for revising the system and training on it.

In assessing employees, supervisors will assign a rating of 1 to 5 for each job objective, with 1 indicating the employee failed to achieve the objective and 5 indicating the employee exceeded the objective and expectations.

The earlier plan required supervisors to use job objectives as an indicator of expected performance, but it didn’t require supervisors to rate each individual’s job objective. Instead, supervisors would have rated employees’ overall performance — using benchmarks of performance expectations for employees at different levels — based on how well they performed in areas such as technical proficiency, critical thinking, cooperation and teamwork, communication and achieving results.

Supervisors still will use those benchmarks to guide their ratings, but now they will be required to rate employees specifically on the job objectives they were expected to achieve.

Supervisors will be able to adjust individual job objective ratings by one point — up or down — based on what Defense calls contributing factors. These factors fall in two categories: solid performance benchmarks and superior benchmarks. Employees who achieve a job objective but perform below the solid benchmarks could have a point deducted from their rating, while those who perform at or above the superior benchmark could have a point added to it.

How the ratings are determined, and what they’re based on, are critical because the average rating from each of the employee’s job objectives will determine how much of a performance-based raise the employee will be eligible to receive.

In addition to briefing union leaders Feb. 16, Defense officials posted a 33-page outline of the revised management system on the National Security Personnel System Web site. Unions didn’t immediately comment publicly on the proposed revisions.

Rules detailing the changes are expected to be issued by the end of February, after Defense officials discuss them with unions, Defense officials said.

Defense officials said they expect to resume employee training on the system in March and remain on track for rolling out the new human resources system to the first group of employees April 30.

February 17, 2006

Senate Democrats call for more generous military pay raise

By Karen Rutzick

Ten Senate Democrats called Thursday for a higher military pay raise than the 2.2 percent President Bush proposed in his fiscal 2007 budget, opening the door once again for a battle to grant civilian federal employees pay parity.

The senators defended their position in a letter to Budget Committee Chairman Judd Gregg, R-N.H., and ranking member Kent Conrad, D-N.D. The committee is responsible for drafting a budget bill -- including the civilian and military pay raises -- based on the president's recommendations.

"As you begin consideration of the president's [fiscal] 2007 budget request, we urge you to include a pay increase that meets the needs and reflects the sacrifice of America's military personnel and their families," the senators stated in the letter.

They cited recruitment and retention as grounds for a larger pay increase, as well as a show of respect for the military in a time of war. The letter did not recommend a specific pay raise figure.

Not everyone agrees that 2.2 percent is too low. On the House side, Rep. Duncan Hunter, R-Calif., chairman of the House Armed Services Committee, told reporters in a Feb. 8 press briefing that the proposed pay raise is sufficient.

"My position on the thing is that the pay raise is higher than the current rate of inflation and the pay raises that we've executed for the last four years are, at this point I believe, [a] 29 percent increase [over five years]," Hunter said. "[That is a] very substantial increase."

Sen. John Kerry, D-Mass., who wrote the letter, noted in a statement that a 2.2 percent pay raise would be the smallest increase since 1994. Last year, both the military and civilian workforces received a 3.1 percent hike.

"Our troops are sacrificing so much, in every corner of the world," Kerry said. "Shortchanging them and the families who love them is a lousy way to say thanks."

Sen. Mark Dayton, D-Minn., who signed the letter, added: "President Bush's proposed pay increase for the courageous men and women in our Armed Forces is unacceptably small. Our brave troops, who are risking their lives around the world, deserved better from their commander-in chief."

In the letter, the senators noted that the Army, Army National Guard and the Army Reserve did not reach their recruitment targets in 2005: "Individuals choose to serve for many reasons: patriotism, a sense of duty, a desire to defend their country and make the world a better place. But we also know that adequate pay is one of the requirements of maintaining a professional, all-volunteer military."

This was the first year that President Bush proposed the same pay raise for both military and civilians. Previously, he had recommended a higher pay raise for the military and Congress boosted the civilian increase to match it.

With pay parity achieved, House Government Reform Chairman Tom Davis, R-Va. said there is likely less room to bargain for a higher civilian pay raise. If Congress boosts the military raise on its own, however, a pay parity debate could still ensue.

This pay raise proposal is equal to the Labor Department's Employment Cost Index. Previously, the formula for military pay raises was ECI plus 0.5 percent, which would bring the raise to 2.7 percent. But the fiscal 2004 National Defense Authorization Act called for pay raises from 2007 on to be equal to the ECI, without the extra 0.5 percent.

February 15, 2005

DOD TWEAKS NSPS
Source: FedNews Online

The Department of Defense has altered some of the core components of its National Security Personnel System.

NSPS is a performance-based human capital system that would affect approximately 700,000 DoD civilian employees' pay and classification, performance management, hiring, workforce shaping, disciplinary matters, appeals procedures and labor-management relations.

According to information posted on the NSPS Web site earlier this week, the changes emphasize job objectives and results. Under the current NSPS guidelines, "objectives will clearly create the 'line of sight' that shows how individual performance can contribute to organizational goals and will serve as the primary basis for employee ratings."

Employee ratings will directly affect pay raises, which "will be based on a range of shares tied to the performance rating."

DoD has yet to publish final NSPS implementing regulations, but the Department expects to release the regulations later this month.

DoD began NSPS last year, but suspended training in early January. (See DOD DELAYS NSPS TRAINING at http://www.fednews-online.com/?publicationId=8765.) The system remains scheduled to be implemented April 30.

Staggered via "Spirals", a vastly re-worked NSPS Spiral 1.1 will implement approximately 11,000 DoD employees into the system.

Under the latest timeframe:

* Spiral 1.1 will begin April 30, 2006. The rating cycle will extend through October 2006 and the NSPS payout will occur in January 2007.

* Spiral 1.2 will begin Oct. 1, 2006.

* Spiral 1.3 will begin January 2007.

Spiral 1.1 organizations, originally consisting of about 65,000 employees, were previously scheduled to transition employees to new performance standards beginning in January.

More information about NSPS can be found at http://www.cpms.osd.mil/nsps/.

February 10, 2006

MAXHR ORAL ARGUMENTS BEGIN IN APRIL
Source: FedNews Online

The U.S. Court of Appeals for the District of Columbia Circuit set April 6 as the date for oral arguments on an appeal of a district court decision blocking the Department of Homeland Security from implementing its new personnel regulations system.

The case on the personnel regulations system, MaxHR , will be heard by Senior Judge Harry T. Edwards and Circuit Judges A. Raymond Randolph and Thomas B. Griffith.

DHS's final brief on the appeal is due Feb. 13 and the National Treasury Employees Union and four other unions will file their final brief on Feb. 27.

More information about the ongoing litigation can be found at
http://www.fednews-online.com/view_publication.aspx?publicationId=8837

February 9, 2006

Cuts in Social Security appear likely to fizzle
GOP leaders not supportive of plan
BY DAVID ESPO
ASSOCIATED PRESS

WASHINGTON -- Congressional Republicans on Wednesday shunned President George W. Bush's election-year call to cut Social Security benefits, and the Senate Finance Committee chairman accused the administration of seeking to end "a pittance for widows and widowers."

"I have no plans to pursue these proposals," said Sen. Charles Grassley, R-Iowa, who leads that committee. The budget that Bush submitted to Congress on Monday proposes eliminating a $255 lump-sum death benefit that has been part of Social Security for more than 50 years. It also urges Congress to cut off monthly survivor benefits to 16- and 17-year-old high school dropouts, which would be reinstated when they turn 18. If approved, the proposals would save a combined $3.4 billion in the next decade, according to administration estimates. But based on early reaction, or lack of it, prospects for passage seemed remote.

Democrats hastened to criticize the proposals Tuesday and continued their attack into a second day. Both Senate Majority Leader Bill Frist, R-Tenn., and House Speaker Dennis Hastert, R-Ill., were quick to applaud Bush's overall budget proposals Monday, but their aides declined repeated requests over two days for comments on the president's suggested change in Social Security.

Rep. Bill Thomas, R-Calif., chairman of the House Ways and Means Committee, also offered no reaction. As the Finance Committee chairman, Grassley has jurisdiction over Social Security, and he made clear the administration's proposals would not be on the year's agenda.

"The administration didn't consult with me on these proposals. Even if someone had, I'd be hard-pessed to give them a second look," he said in a statement. Administration officials have described the $255 death benefit as an administrative burden because it is paid in some cases, but not all, and said its elimination is unlikely to cause hardship. They also say the provision relating to 16- and 17-year-olds is an incentive for them to remain in school.

By Karen Rutzick

Source: Fednews Online

Congressional support for a 2007 pay raise that exceeds President Bush's 2.2 percent request may wane because, in a break from past years, the president's proposal grants military-civilian pay parity.

President Bush's 2007 budget, released Monday, included an equal pay raise for military and civilian employees. But even with parity, a 2.2 percent civilian raise would be the lowest boost since 1988.

Until now, Bush has consistently proposed lower annual raises for white-collar civilian employees than he has for their military counterparts. Congress has responded with a call to make the two groups equal by bumping up the civilian raise.

As a result of this year's offer of pay parity, advocates for a higher federal raise may have lost at least one key ally in Rep. Tom Davis, R-Va.

Davis is chairman of the House Government Reform Committee, which has jurisdiction over federal employee issues. He represents a Virginia district with a large number of federal employees and has been a strong advocate of pay parity.

But Davis spokesman Rob White said the congressman is very pleased with the president's proposal for this year's raise.

"On first glance, the congressman believes [a higher raise] would be a tough fight this year now that we have parity," White said. "It would be a tough sell in Congress."

"Obviously, we look at all the federal employee issues pretty closely," White added, suggesting there is still a possibility for higher raises.

In a statement Davis hailed the president's pay proposal.

"I consider it a personal victory that, for the first time in recent history, the president has linked civilian and military pay raises," he said.

A number of Democrats who represent a large number of federal employees said they will fight for a higher raise despite the absence of a parity argument.

The 2.2 percent raise is "consistent with a low rate of inflation," said Rep. James Moran, D-Va., "but it's grossly insufficient to cover health insurance premiums, the additional cost of gas and heating oil -- in other words, energy costs -- and the cost of living in this area."

"I'm pleased with the parity, but I'm very dissatisfied with the rate," said Albert Wynn, D-Md. "I think 2.2 percent is inadequate if we're trying to keep federal employees and attract federal employees, so I think we've made one step forward and one step backwards."

Others, such as Rep. Benjamin Cardin, D-Md., and Sen. Daniel Akaka, D-Hawaii, ranking member of the Homeland Security and Governmental Affairs Committee's Subcommittee on the Federal Workforce, were more ambiguous about their positions, saying the federal pay raise needs a closer look.

Congress could move to increase the military's salary adjustment, which in turn could launch a pay parity debate even without the president's involvement. House Minority Whip Steny Hoyer, D-Md., said in a statement that 2.2 percent may not be sufficient, and that he will work on the issue with the committee that has jurisdiction over the military pay raise.

"In the weeks ahead, I intend to investigate the adequacy of next year's proposed salary adjustment, consulting with respected members of the House Armed Services Committee, Government Reform Committee, as well as representatives of the military and federal civilian workforce," Hoyer said.

"I'm sure that the Congress is going to want to increase the pay rate for the cost of living for military, so we would expect them to do the same for civilians," Moran said.

WASHINGTON — Social Security has been so overwhelmed helping seniors cope with the new Medicare drug program that other services are starting to suffer, a senior government official said in an internal e-mail released Friday.

A large backlog of cases is getting worse, and the agency is cutting cut back on audits that save the government money.

"It's not a rosy picture, and the news doesn't get better," Deputy Commissioner for Operations Linda S. McMahon wrote agency employees.

The agency is scrounging for money to pay overtime, McMahon said, and will have to cut back on other priorities, though monthly retirement checks for 48 million Social Security beneficiaries will not be affected.

"I won't try to kid you," McMahon wrote employees. "This is going to be a very difficult year."

About one in three callers to Social Security's 800 number get a busy signal, she explained.

The agency's 1,300 local offices have been getting as many as 60,000 extra visitors a day — a 40 percent increase from last fall.

McMahon's Jan. 21 e-mail was released by Rep. Henry A. Waxman, D-Calif. His office said it first verified the authenticity of the message, which is captioned "Difficult Times." Waxman called for immediate congressional action to restore a recently enacted cut of nearly $200 million in Social Security's administrative budget.

"The problems faced by the Medicare program in implementing the benefit are spilling over and having significant impacts on the Social Security program," he said.

McMahon testified on Thursday before the Senate Aging Committee about her agency's effort to assist Medicare with financial subsidies for low-income seniors called "extra help." More than 4 million people have applied for the aid, but only about 1.4 million qualified.

In her testimony, McMahon did not recite the litany of problems detailed in her e-mail. Instead, she thanked Congress for "providing (Social Security) with the resources we have needed to begin this challenging process."
In a statement issued Friday, the agency said: "As the Social Security Administration handles the increased phone calls and office visits associated with the new Medicare prescription drug program, we continue to provide (financial) benefits and assistance with timeliness and professionalism. As always, we remain dedicated to providing the best possible service to the American people."

While jammed phone lines at Medicare offices and at those of the private insurance plans administering the drug benefit have been widely reported, problems at Social Security have largely gone unnoticed.

In her e-mail, McMahon noted that some employees had warned that the agency would run into trouble trying to juggle its regular duties and the added task of helping seniors enroll for the complex prescription program.

"Those of you on the front line have been expressing your deep concern that (Social Security) is not positioned well to help people understand, enroll in and negotiate" the Medicare drug program, she wrote. "Now we are seeing the consequence of that fact. Our national 800 number network has been overwhelmed for weeks. . ."

Although the law that created the Medicare drug benefit provided extra funding for Social Security in 2004 and 2005, it earmarked no funds for this year, when the agency is facing its largest burdens, Waxman said.

Instead, Congress cut the agency's administrative budget from $9.3 billion in 2005 to $9.1 billion in 2006.

To free up staff, the agency has gotten White House permission to cut back on disability reviews, McMahon wrote. The reviews determine whether certain beneficiaries still qualify to receive monthly assistance. Such audits save the government money.

February 3, 2006

After receiving an internal e-mail indicating an extreme state of unrest at the Social Security Administration, Representative Henry Waxman (D-CA) has written Speaker Hastert regarding the situation.

Currently, nearly 50 million Americans rely on Social Security.

Waxman claims that other internal documents indicate a "hemorrhaging" at Social Security call centers, and a flood of inaccurate information to seniors regarding the prescription drug plan.

Attached to Waxman's letter was, in its entirety, a message sent from Deputy Commissioner of Operations Linda McMahon to all Social Security Administration Operations employees. The document paints a very dire picture of conditions at the agency.

Excerpts from that letter follow:

Ordinarily I would be sending you a Happy New Year note at this time, but the circumstances we are facing seem to call for a different message. I didn't want you to think I'm out of touch with reality and don't know about the significant challenges you are experiencing.

Ever since the Medicare Modernization Act passed, those of you on the front line have been expressing your deep concern that SSA is not positioned well to help people understand, enroll in and negotiate the new Medicare Part D Prescription Drug Program.

Now we are seeing the consequences of that fact. Our National 800 Number Network has been overwhelmed for weeks, with busy rates running above 35 percent many days. In the last few weeks, those folks who can't get us on the phone have been coming into our field offices in large numbers. In fact, during the first two weeks in January, we had nearly 200,000 visitors a day - as many as 60,000 more than we saw in the fall. We already had large backlogs in our Processing Centers, and those will be exacerbated by the need to put more people on the phone to bring down the busy rate and keep people from needing to visit field offices. Of course, if we aren't careful, we will generate more calls and visits from the folks whose actions will have to pend longer in the PCs.

It's not a rosy picture, and the news doesn't get better. Congress finally passed our FY06 budget in late December, and they gave us $300 million less than the President requested. That means we will not be able to replace all the employees we lose to retirement this year or accomplish all the automation projects we had intended to do to streamline work processes. At the same time, we have been given new mandates to do more thorough screening before we process Social Security Number applications and to include children under the age of one in that process.

So, where does that leave us? What are we going to do to cope with these problems? ...

I won't try to kid you. This is going to be a very difficult year, and the budget picture for next year doesn't look any better. I commit to you that I will continue to work with the Commissioner to tell our story and enhance our chances of getting a better budget. I will be closely monitoring the impact of our decisions and will make adjustments as necessary to ensure that we maximize the use of our resources and minimize the negative fallout from the shortfall. Of course, that means we will probably be changing priorities as the year unfolds, so please prepare yourselves mentally for that possibility.