WASHINGTON, D.C. — On Thursday Rep. Joe Barton (R-TX), Chairman Emeritus of the House Committee on Energy and Commerce and Rep. Cliff Stearns (R-FL), Chairman of the Subcommittee on Oversight and Investigations introduced the HHS Employee Compensation Reform Act of 2012. The legislation would rein in the use of the flexible pay mechanism (frequently cited as Title 42) in the Public Health Service Act, which has allowed some employees of the Department of Health and Human Services (HHS) to make as much as $350,000. The Environmental Protection Agency (EPA) has also used Title 42 to pay some employees upwards of $250,000 and this is all done without guidelines or congressional oversight. The hiring and determination of the salaries of these employees are within the sole discretion of the Secretary of HHS and the Assistant Administrator for Research and Development at the EPA.

The Energy and Commerce Committee has been investigating the use of Title 42 for several years. Our investigative work and a recent GAO Report (Click here to read) illustrate the need to reform the use of this section to ensure that the original intent of the law is followed more closely.

“This is commonsense legislation that will rein in this runaway program. Title 42 was designed to help HHS, and HHS only, hire and retain the best and brightest minds in medical research. But now, it appears to be a loophole that allows the government to pay over 6,400 employees enlarged salaries up to $350,000. The EPA is using the program to compensate dozens of employees as well. With no guidelines and no oversight, it looks like bureaucrats at these agencies have been inflating their salaries at taxpayer expense. These agencies should be responsible for explaining why they are forking over so many six figure salaries,” the lawmakers said in a joint statement.

The HHS Employee Compensation Reform Act of 2012 does the following:

(1) Limits the use of this hiring mechanism to only the Department of Health and Human Services, (2) Limits the total number of Title 42 employees at HHS to five percent of total employees, (3) Limits the pay of Title 42 employees by designating a salary cap equal to 150 percent of the annual rate of pay for Level I of the Executive Schedule, (4) Requires HHS to annually report to Congress the number of Title 42 employees and break the numbers down by agency, and (5) At any time, up to 50 individuals serving pursuant to this subsection may be paid without regard to the limitation on compensation if the Secretary finds that each such individual’s service is vital to support the activities of the Department of Health and Human Services.