Federal Employees' Compensation Reform Act of 2011

Mr. President, I rise this evening to introduce the Federal Employees Compensation Reform Act of 2011. This bill would preserve the essential purpose of the Federal Workers' Compensation Program, which is to ensure income for injured Federal and postal workers, while at the same time it would protect the program from fraud and abuse.

The Federal Employees Compensation Act, which is known as FECA, provides benefits that serve as a safety net for Federal employees and postal employees who are injured on the job, providing income until the healing process and rehabilitation allowed them to return to work. Obviously, we want to support those employees until they can return to work. That is both humane and just.

Over the years, however, this program has unintentionally morphed into an alternative retirement program that is far more financially lucrative for recipients than the standard Federal retirement system. Because of the way the program is structured, for some individuals, FECA has become a gold-plated retirement system, tainted by unfairness, perverse incentives, and the potential for abuse and fraud.

This program pays monthly benefits to about 49,000 recipients. Those are recipients who have suffered a work-related injury and have been approved for workers' comp benefits.

In the past fiscal year, this program cost $2.78 billion. Of that amount, nearly $1.1 billion went to Postal Service employees receiving these benefits.

This program has become increasingly expensive and requires some commonsense reforms--reforms that many States have already implemented in their own workers' comp programs.

As it currently operates, FECA includes a perverse financial incentive that encourages older employees who otherwise would have retired to continue to receive workers' comp benefits.

Remember, these payments are designed as a bridge to help injured workers until they are able to return to work. That is the important phrase--``return to work.'' This program was never intended to serve as a higher paying alternative to the Federal retirement system.

Federal employees on FECA receive an average of 73 percent of their gross pay. Moreover, these workers' comp benefits are tax free--another substantial benefit.

By contrast, a Federal employee, with 30 years of service under the Civil Service Retirement System, would average slightly more than 56 percent of his or her gross pay as a retirement benefit, and these retirement benefits are taxed. It pays then to stay on workers' comp for as long as possible, since many recipients receive more money under that program than they would if they were to retire.

Let me again emphasize that these workers' comp payments are tax free--another big difference.

In fact, according to the numbers produced by the Department of Labor, nearly 30 percent of the current workers' comp recipients are age 66 and older, while the average retirement age for both Federal employees and postal workers is age 60.

With no mandatory Federal retirement age, FECA recipients are allowed to stay on workers' comp rolls for their entire lifetimes, even when there is no expectation that they will return to work because of their advanced age.

Some employees have continued to receive Federal workers' comp benefits into their hundreds. For the U.S. Postal Service alone, let's look at the statistics.

As we can see, there are more than 15,000 recipients in total. Of those, more than 2,000 recipients are age 70 or older; 927 recipients are age 80 or older; 132 recipients are age 90 or older; and astonishingly enough, 3 postal employees receiving workers' comp are age 98 or older.

Mr. President, it is obvious these workers are not going back to work. They clearly should be transitioned to the retirement system. I must ask the obvious question: Is there any likelihood at all these recipients are ever going to return to the workforce? No. Then why aren't they transitioning to the retirement system when they reach retirement age? Think how unfair that is to the worker who does retire, say, at age 65 and gets a lesser amount.

Right now, the way the system is structured it does not encourage people to go back to work or to transfer to retirement at an age when most of their fellow workers would have retired. To prevent this continued abuse, my bill would convert retirement-eligible postal and Federal employees on workers' compensation to the retirement system when they reach age 65.

Now, that is generous, Mr. President, because we know the average retirement age is actually 60. I would choose age 65. This is a commonsense change that would save millions of dollars that the Postal Service, the Federal Government, and the American taxpayer cannot afford to spend. It is also a matter of fairness, Mr. President. But we must also examine other elements of the FECA program to determine whether there are some additional improvements that are necessary.

Unlike many State programs, the Federal workers' compensation program has no cap nor time limits on benefits. Moreover, the Federal Department of Labor acknowledges a 2- to 3-percent fraud rate in the program. I suspect it may be even higher. We need to reduce this rate of fraud by examining whether the medical certification requirements and other internal controls should be strengthened. Are we doing medical reviews to see if these individuals could go back to work?

For example, a former postal worker was sentenced just a week or so ago to 5 months in jail after pleading guilty to workers' compensation fraud. The employee claimed he was unable to walk from his parked car to the post

office. But at the same time he was receiving tax-free workers' compensation benefits, he was also operating a snow removal and lawn care business.

In addition, about 100 other claimants per year are prosecuted by the Department of Labor's Office of Inspector General because they received workers' compensation and their retirement pay. These are the so-called ``double-dippers.''

Mr. President, as part of my effort to strengthen oversight of this program, I have asked the Government Accountability Office, along with Senator Coburn and Senator McCaskill, to audit the FECA program and report on the length of time individuals remain on the program, the number of recipients who exceed the standard Federal retirement age, and how the Federal program compares to State workers' compensation best practices. I expect these findings will lead to additional reform proposals as the bill proceeds through the Senate.

I also intend to work with stakeholders to determine if changes in the Federal Employees Retirement System, the FERS system, as opposed to the old Civil Service Retirement System are necessary to make sure that workers' compensation recipients would be treated fairly when they are converted to FERS retirement benefits under this bill.

For example, this may require the Department of Labor to administer the Thrift Savings Plan contributions for recipients or to require Social Security contributions from workers' compensation recipients.

What is clear, however, is that this program is in need of urgent reform. The program is costing too much, injured workers are not being monitored sufficiently and helped to return to productive work, recipients who should be in the retirement system are instead receiving tax-free benefits, and some agencies have high claim rates, suggesting that safety improvements are needed.

For the sake of fairness and fiscal responsibility, we must reform this program now. Not doing so is an affront to the thousands of Federal employees who enter the retirement system. It is a disservice to those Federal and postal employees who truly need workers' compensation benefits, and it is an unnecessary burden on taxpayers.

Mr. President, I rise this evening to introduce the Federal Employees Compensation Reform Act of 2011. This bill would preserve the essential purpose of the Federal Workers' Compensation Program, which is to ensure income for injured Federal and postal workers, while at the same time it would protect the program from fraud and abuse.

The Federal Employees Compensation Act, which is known as FECA, provides benefits that serve as a safety net for Federal employees and postal employees who are injured on the job, providing income until the healing process and rehabilitation allowed them to return to work. Obviously, we want to support those employees until they can return to work. That is both humane and just.

Over the years, however, this program has unintentionally morphed into an alternative retirement program that is far more financially lucrative for recipients than the standard Federal retirement system. Because of the way the program is structured, for some individuals, FECA has become a gold-plated retirement system, tainted by unfairness, perverse incentives, and the potential for abuse and fraud.

This program pays monthly benefits to about 49,000 recipients. Those are recipients who have suffered a work-related injury and have been approved for workers' comp benefits.

In the past fiscal year, this program cost $2.78 billion. Of that amount, nearly $1.1 billion went to Postal Service employees receiving these benefits.

This program has become increasingly expensive and requires some commonsense reforms--reforms that many States have already implemented in their own workers' comp programs.

As it currently operates, FECA includes a perverse financial incentive that encourages older employees who otherwise would have retired to continue to receive workers' comp benefits.

Remember, these payments are designed as a bridge to help injured workers until they are able to return to work. That is the important phrase--``return to work.'' This program was never intended to serve as a higher paying alternative to the Federal retirement system.

Federal employees on FECA receive an average of 73 percent of their gross pay. Moreover, these workers' comp benefits are tax free--another substantial benefit.

By contrast, a Federal employee, with 30 years of service under the Civil Service Retirement System, would average slightly more than 56 percent of his or her gross pay as a retirement benefit, and these retirement benefits are taxed. It pays then to stay on workers' comp for as long as possible, since many recipients receive more money under that program than they would if they were to retire.

Let me again emphasize that these workers' comp payments are tax free--another big difference.

In fact, according to the numbers produced by the Department of Labor, nearly 30 percent of the current workers' comp recipients are age 66 and older, while the average retirement age for both Federal employees and postal workers is age 60.

With no mandatory Federal retirement age, FECA recipients are allowed to stay on workers' comp rolls for their entire lifetimes, even when there is no expectation that they will return to work because of their advanced age.

Some employees have continued to receive Federal workers' comp benefits into their hundreds. For the U.S. Postal Service alone, let's look at the statistics.

As we can see, there are more than 15,000 recipients in total. Of those, more than 2,000 recipients are age 70 or older; 927 recipients are age 80 or older; 132 recipients are age 90 or older; and astonishingly enough, 3 postal employees receiving workers' comp are age 98 or older.

Mr. President, it is obvious these workers are not going back to work. They clearly should be transitioned to the retirement system. I must ask the obvious question: Is there any likelihood at all these recipients are ever going to return to the workforce? No. Then why aren't they transitioning to the retirement system when they reach retirement age? Think how unfair that is to the worker who does retire, say, at age 65 and gets a lesser amount.

Right now, the way the system is structured it does not encourage people to go back to work or to transfer to retirement at an age when most of their fellow workers would have retired. To prevent this continued abuse, my bill would convert retirement-eligible postal and Federal employees on workers' compensation to the retirement system when they reach age 65.

Now, that is generous, Mr. President, because we know the average retirement age is actually 60. I would choose age 65. This is a commonsense change that would save millions of dollars that the Postal Service, the Federal Government, and the American taxpayer cannot afford to spend. It is also a matter of fairness, Mr. President. But we must also examine other elements of the FECA program to determine whether there are some additional improvements that are necessary.

Unlike many State programs, the Federal workers' compensation program has no cap nor time limits on benefits. Moreover, the Federal Department of Labor acknowledges a 2- to 3-percent fraud rate in the program. I suspect it may be even higher. We need to reduce this rate of fraud by examining whether the medical certification requirements and other internal controls should be strengthened. Are we doing medical reviews to see if these individuals could go back to work?

For example, a former postal worker was sentenced just a week or so ago to 5 months in jail after pleading guilty to workers' compensation fraud. The employee claimed he was unable to walk from his parked car to the post

office. But at the same time he was receiving tax-free workers' compensation benefits, he was also operating a snow removal and lawn care business.

In addition, about 100 other claimants per year are prosecuted by the Department of Labor's Office of Inspector General because they received workers' compensation and their retirement pay. These are the so-called ``double-dippers.''

Mr. President, as part of my effort to strengthen oversight of this program, I have asked the Government Accountability Office, along with Senator Coburn and Senator McCaskill, to audit the FECA program and report on the length of time individuals remain on the program, the number of recipients who exceed the standard Federal retirement age, and how the Federal program compares to State workers' compensation best practices. I expect these findings will lead to additional reform proposals as the bill proceeds through the Senate.

I also intend to work with stakeholders to determine if changes in the Federal Employees Retirement System, the FERS system, as opposed to the old Civil Service Retirement System are necessary to make sure that workers' compensation recipients would be treated fairly when they are converted to FERS retirement benefits under this bill.

For example, this may require the Department of Labor to administer the Thrift Savings Plan contributions for recipients or to require Social Security contributions from workers' compensation recipients.

What is clear, however, is that this program is in need of urgent reform. The program is costing too much, injured workers are not being monitored sufficiently and helped to return to productive work, recipients who should be in the retirement system are instead receiving tax-free benefits, and some agencies have high claim rates, suggesting that safety improvements are needed.

For the sake of fairness and fiscal responsibility, we must reform this program now. Not doing so is an affront to the thousands of Federal employees who enter the retirement system. It is a disservice to those Federal and postal employees who truly need workers' compensation benefits, and it is an unnecessary burden on taxpayers.

Mr. President, I rise today to express my support for instituting biennial budgeting within the U.S. Government. We should reform the Federal budget process by converting it from an annual spending process to a 2-year cycle, with 1 year for appropriating Federal dollars and the following year devoted to oversight of Federal programs.

Under the current budget process, Congress almost never finishes the appropriations bills by October 1 and is forced to consider omnibus legislation composed of individual appropriations bills that were never considered on the Senate floor. Worse still is that we are often unable to amend an omnibus appropriations bill and are forced to accept provisions that may be objectionable. Because we are constantly racing against the clock to finish appropriations, authorizing committees are hampered in their ability to conduct effective oversight. This means that we have trouble learning about what spending programs work and which must be modified or eliminated. Budget reforms are much needed and long overdue.

The amendment that I filed today would require the President to submit a 2-year budget at the beginning of the first session of a Congress. Members of Congress would then need to adopt a 2-year budget resolution, a reconciliation bill if necessary and 2-year appropriations bills during that first session. The legislation ensures the enactment

of 2-year appropriations bills by providing a new majority point of order against consideration of an appropriations bill that fails to cover 2 years. The second session of a Congress would then be devoted to the consideration of authorization bills and oversight of Federal programs. The result is enhanced oversight that will provide greater accountability of government programs and a superior budget process.

Each year, approximately 40 percent of Congress's debating time is spent on appropriations, on the resolution and on the reconciliation process. In some years, that number is as high as 60 percent, not even reflecting the time that the budget process consumes the entire Federal bureaucracy. Moreover through February 18 of this year, House lawmakers spent 61 hours over 4 days debating 162 of the nearly 600 amendments filed on the 359-page measure to fund government until September. And after all the debate and consideration last year, Congress failed to adopt the budget or pass any of the 13 appropriations bills for the first time since the landmark Budget Act of 1974.

It is no wonder that the American people are dismayed because all they have seen is the chaotic nature of the budgetary process and the failure of Congress time and time again to meet statutory deadlines.

It is important to have a biennial budget because it will allow the President--as well as Congress--in the second year to fine-tune the budget, revisit issues, improve oversight activities, and--if necessary--respond to a downturn in the economy, such as a recession. And it would also immeasurably add to accountability to the American taxpayer. If you ask the American taxpayer, ``Do you think your Federal dollars are being spent wisely and efficiently?''--the response is a resounding ``no'' as reflected in many polls and public opinion surveys. Only if we improve oversight activities and examine every program and agency, will we restore the confidence of the American taxpayer in how government spends hard-earned tax dollars.

Unfortunately, the battle to get the biennial budget passed is not new. I have been advocating for budget reform for years and have pursued shifting the federal budgeting process to a biennial system throughout my tenure in the Senate. In 1997--the year that led to record surpluses--I cosponsored the Biennial Budgeting and Appropriations Act, S. 261, to amend the Congressional Budget Act of 1974 to revise the Federal and congressional budget processes by establishing a two-year budgeting and appropriations cycle and timetable. That bill sat dormant in a Senate committee--as did the next four bills of this kind that I have cosponsored since.

So we find ourselves with record deficits, a complicated and time consuming budget process that gives Americans little confidence in their government, lack of congressional oversight over the many programs and agencies that dispense taxpayer's funds, and the surpluses of the 1998-2001 nowhere to be found. If that does not tell us that the system is broken, I do not know what does.

The biennial budget would free up Senate floor time for other matters, help us avoid having to consider an end-of-year omnibus bill, and provide authorizing committees more time to carry out their oversight responsibilities. Biennial budgeting would make us more effective legislators and enable us to make more informed choices on behalf of our constituents.

Biennial budgeting is necessary to return us to the path of fiscal sustainability and to allow Congress time to engage in meaningful oversight of government spending. As such, this legislation is long overdue and it is my hope that Congress will finally institute this much needed reform.

Mr. President, I ask unanimous consent to set aside any pending amendment and call up amendment No. 8.

Mr. President, I ask unanimous consent to waive further reading of the amendment.

Mr. President, I rise to speak in support of this amendment I have offered with Senators Kirk, Boxer, Durbin, Casey, Menendez, and Schumer to secure aircraft cockpits against lasers. This commonsense and bipartisan amendment would protect passengers and pilots by making it a Federal criminal offense to knowingly aim the beam of a laser at an aircraft.

As explained in a recent article in the New York Times, ``a beam that is \1/25\ of an inch wide at its origin can be 2 to 3 feet wide by the time it reaches an airliner approaching or departing an airport.'' As a result, when targeted at aircraft, laser stripes can instantly flash across the cockpit, temporarily blinding the pilot and the crew. One pilot described the feeling of being hit by a laser like this:

It immediately lit up the whole cockpit and it hit both of

my eyes and burned both of my corneas. Instantly, I was

blinded. It felt like I was hit in the face with a baseball

bat--just an intense burning pain.

FAA Administrator Randy Babbitt similarly recently warned that lasers can ``damage a pilot's eyes or cause temporary blindness.'' Indeed, pilots have described the need to hand control of their aircraft to a copilot as a result of one of these incidents.

It goes without saying that such a threat to a pilot's sight, particularly during the critical phases of takeoff and landing, poses an unacceptable risk to the traveling public, to our pilots, and to citizens on the ground. For this reason, Secretary of Transportation Ray LaHood recently described laser incidents as ``a serious safety issue.''

The problem is growing. According to a recent report by the Federal Aviation Administration, 2,836 pilots reported that they were targeted with lasers in 2010, nearly double the number in 2009. In other words, every day, eight pilots and the passengers they fly are put at risk in the manner I described. The problem affects airports of all sizes across the country.

At T.F. Green Airport, for instance, in my home State of Rhode Island, there were 12 such reported incidents just in the last year. The problem also is worsening as new and more powerful lasers become commercially available. These new lasers emit an increasingly bright beam that can reach aircraft miles away from the airport.

Current Federal law does not provide prosecutors with ready tools to prosecute and thus deter this dangerous conduct. Ill-fitting existing statutes occasionally can be used, but only in limited cases, leaving even identified perpetrators to go unpunished. My amendment would solve this problem by creating a criminal offense that clearly and distinctly covers this harmful conduct. It would explicitly criminalize knowingly aiming the beam of a laser pointer at an aircraft. Violations would lead to punishment of imprisonment for up to 5 years or fines of up to $250,000.

The legislation would exempt valid uses of lasers in the aviation context, such as designated research and development activities, flight test operations, training, and emergency signaling. Prosecutors would gain a new, valuable tool to protect air safety without any burden being imposed on the legitimate use of lasers.

Comparable bipartisan legislation has previously passed the House of Representatives and was reported favorably out of the House Judiciary Committee this year. It is widely supported. For example, this amendment is supported by the Airline Pilots Association and the National Association of Police Organizations.

Mr. President, I ask unanimous consent to have printed in the Record letters from those organizations.

Mr. President, I thank Senators Kirk, Boxer, Durbin,

Casey, Menendez, and Schumer for their leadership on this issue. I also thank our partners in the House for their work, and let me thank Chairman Rockefeller and Ranking Member Hutchison for considering this amendment.

I hope Senators on both sides of the aisle will join me in voting for this amendment that will protect our public safety against this new hazard.

Mr. President, I yield the floor.

I thank the distinguished chairman for his very kind words. Let me thank him for his efforts to support this amendment. His cosponsorship is extremely important. I look forward to working with whatever I can bring to get this amendment successfully adopted into the bill and to get the bill successfully passed. I very much appreciate the chairman's distinguished leadership.

Mr. President, we know we need to focus on cutting our spending. We know we need to focus on the tax reform effort. I think everybody generally agrees on that. Although they may disagree on what the particulars would be, they agree we need to do those two things. The third thing we also must do is to focus on the economy and jobs. This is something that we have seen in this country over the last 2\1/ 2\ years, where we have gone through a very harsh, very difficult recession and we have seen an unemployment number that stays stubbornly high. We have seen a lot of topsy-turvy economic numbers over the last 2\1/2\ years, and I believe the Congress--the House and Senate--and the White House need to set the table for job creation and economic growth in this country, and we need to do it in a very smart way.

Today, I am here to talk about the angel investment tax credit bill I am introducing. I want to encourage my colleagues to consider reading the bill and becoming cosponsors. I would love to be working on this over the next few weeks to get a broad base of support and to get as much emphasis on this effort as possible right now. It is one of many job-creating pieces of legislation I am interested in in this Congress, but I would love to get as many colleagues as possible interested now to look at this and see if it is something we could pass sooner, rather than later, around here.

The angel investment tax credit is modeled after the new market tax credit, and it would provide a 25-percent Federal income tax credit for investing in qualified early-stage small businesses. The focus will be on advanced manufacturing, aerospace, biotechnology, clean energy, and transportation. The bill would provide that up to $2 million per year in tax credit-eligible cash equity investments could be made, with a total of $10 million per small company. The goal would be that for every $1 we put in, there would be $4 of private-sector stimulus.

This is the private sector getting back on its feet with a little bit of grease provided by the government to get things going in the right direction through the Tax Code. The bill I have written would authorize $500 million per year for 5 years for these tax credits. As I said, this proposal is expected to stimulate $2 billion per year in new capital formation.

Let me give one quick example of how this can work. All these companies on this chart here started with an angel investment to get over the hump. What happens is someone will have a good idea. They think they can innovate, they think they can produce, they think they can have value in the marketplace, but they can't get the capital in order to get established. They can't quite get over the hump. J. B. Hunt company is now a $5 billion company. It employs 14,500 people and has 400 facilities in 48 States. In 1961, J. B. Hunt had an idea and he went to five poultry company executives with his hat in his hand asking for money. They gave him $25,000 in seed money, and that is what he has done with that company throughout the course of his lifetime.

There are lots of examples of folks like that--HP; there is a company in Arkansas called NanoMech, BlueInGreen, and other companies we have seen do this. But many of these companies are very much household names--Google, Facebook, Amazon, eBay, and Apple. All of these companies started with angel investment to get them through what they call the valley of death. The valley of death is usually that period where something has gone from the idea stage to the marketplace. They usually need somewhere between $1 million and $4 million to get their ideas to market.

Our bill is designed to bridge that gap and cross that valley of death so we can see a lot of startup companies come into the marketplace. We are looking for the next J.B. Hunt, we are looking for the next Apple, or the next Amazon. We are trying to find the next HP, whoever is out there who has great ideas who wants to come in and invest. Angel investment led to the creation of 250,000 jobs in 2009 and 2009 wasn't a great year, but angel investment led to the creation of 250,000 jobs. This represented about 5 percent of all the new jobs in the United States, so this can have a measurable impact. This can move the needle in the right direction.

The time is now for us to work on this. I encourage my colleagues on both sides of the aisle to read the legislation. If they are interested, I would like to visit with them about it. I would love to get this bill moving through the system as quickly as possible.