181. Letter From the Under Secretary of State for Management (Read) to the Director of the Office of Management and Budget (McIntyre)1

Dear Jim:

I am writing to provide the views of the Department of State on H.R. 6790, an enrolled bill to “promote the foreign policy of the United States by strengthening and improving the Foreign Service of the United States, and for other purposes.”2

The enrolled enactment represents the culmination of a two-year effort by the Administration to obtain legislation that will serve for the Foreign Service as a landmark comparable to the Civil Service Reform Act of 1978. The last comprehensive revision of Foreign Service legislation was contained in the Foreign Service Act of 1946. While many of the concepts embodied in the 1946 Act remain valid, H.R. 6790 builds on those basic concepts in ways that will substantially improve the efficiency and the effectiveness of the Foreign Service. In particular:

—It provides a clear distinction between Foreign Service and Civil Service employment, and eliminates the anomalous “domestic” Foreign Service personnel category;

—It simplifies and rationalizes the various categories of Foreign Service personnel, and authorizes a single Foreign Service salary schedule to be established by the President;

—It makes more uniform the statutory terms and conditions of Foreign Service employment among personnel categories and provides for maximum compatibility among the agencies employing Foreign Service personnel;

[Page 716]

—It establishes a Senior Foreign Service comparable to the Senior Executive Service, with rigorous entry and retention standards based on performance, and with performance pay for outstanding service;

—It provides a statutory basis for labor-management relations in the Foreign Service, strengthens individual employee rights in ways consistent with the Civil Service Reform Act, and gives renewed emphasis to the principles of equal employment opportunity; and

—It strengthens the criterion of quality performance as the basis for retention and advancement at all ranks in the Foreign Service, with decisions based on the comparative judgments of independent selection boards, and encourages a regular flow of recruitment, advancement and attrition in the officer corps to assure continuous improvement and vigor.

A draft bill for these purposes was transmitted to the Congress by Secretary Vance on May 19, 1979, on behalf of the Administration. After intensive deliberations by three committees of Congress and spirited debate on a number of issues in both the House and the Senate, the measure that has finally emerged contains all of the authorities requested in the Administration’s proposal. Several additional noteworthy issues were raised in the legislative process. These issues and their disposition are described below. A more complete analysis of the enrolled bill is enclosed.

Inspector General

Section 209 departs from the Administration proposal by conferring on the Inspector General of the Department of State and the Foreign Service authorities and responsibilities similar to those conferred on other agency Inspectors General by the Inspector General Act of 1978 (P.L. 95–452).

Chief of Mission Appointments

Section 302 requires that nominations of chiefs of mission be accompanied by a report to the Senate Foreign Relations Committee on the nominee’s demonstrated competence. It also requires advance reports to that committee before the President confers the personal rank of ambassador on any individual.


Section 403 authorizes the President to establish the salaries for a nine-class Foreign Service Schedule.3 The conference report makes clear that this provision represents acceptance by the Congress of the compromise pay schedule approved by the President last month.4 Section [Page 717] 2101 makes this new pay schedule effective from and after the beginning of the first pay period in October 1980.

Retirement Benefits for Former Spouses

Sections 806 and 814 go beyond the Administration’s proposals to provide pursuant to court order for the sharing of retirement annuities with, and conferral of survivor benefits on, former spouses of Foreign Service personnel. The bill provides for pro rata shares of these benefits for a former spouse who was married for ten years or more during an employee’s service, based on the number of years of marriage in relation to the length of the employee’s career. This formula, however, may be altered by agreement between the parties or by a court order at the time of divorce. Moreover, the formula will be applicable only in the case of divorces occurring after the bill’s effective date.

Mandatory Retirement

Section 812 retains the feature of a mandatory retirement age for the Foreign Service, as proposed by the Administration, but increases the mandatory retirement age from 60 to 65.

Mandatory Conversion

Section 2104 preserves the Administration proposal for mandatory conversion to the competitive service within three years of those employees who are presently in the Foreign Service personnel system, but who are available to serve only in the United States. The committee of conference rejected a Senate amendment which would have undercut this central feature of personnel reform by permitting domestic employees of the International Communication Agency to remain in the Foreign Service until they voluntarily converted to the competitive service or left their positions with that agency.

Overseas Differentials

Sections 2309 and 2311 provide authority for increasing the present maximum 25 per cent overseas differential which may be paid to Government employees who are assigned to foreign areas. Section 2309 authorizes a supplemental differential of up to 15 per cent of pay at posts where adverse conditions warrant an additional recruitment and retention incentive; section 2311 authorizes a danger pay allowance of up to 25 per cent at posts where wartime conditions threaten physical harm or imminent danger to health or well being. Authority to pay these new benefits is discretionary, and they may not be paid simultaneously so as to increase an employee’s basic pay by more than 25 per cent.

Cost Estimate

At this point our best estimate of the costs of implementing H.R. 6790 with respect to appropriation requirements of the Department [Page 718] of State, and without regard to inflation after fiscal year 1982, are as follows:

FY 1981 FY 1982 and beyond
(in millions)
Salary comparability and related items $ 22.5 $ 24.2
Allowances and miscellaneous items 2.5 3.6
Appropriations to FS Retirement Fund 12.0 12.2
Totals $ 37.0 $ 40.0


The Department of State recommends that the President approve the enrolled bill with an appropriate statement and ceremony to commemorate this major legislative accomplishment of his Administration.5 The signing of this bill gives the President an opportunity to reaffirm his commitment to personnel reform and effective and efficient government, and to demonstrate his recognition of the unique contributions and sacrifices made by the men and women of the Foreign Service. In this regard, we have transmitted under separate cover a favorable report and recommended signing statement on the proposed Hostage Relief Act of 1980 (H.R. 7085, an enrolled bill).6 That bill provides a variety of desirable benefits for American hostages captured in the attacks on United States embassies abroad, many of whom are members of the Foreign Service. Several members of Congress were instrumental in the passage of both bills, and we believe a ceremony for the signing of these two bills would be highly desirable. We would be pleased to coordinate with the White House staff on contingency arrangements for such a ceremony.


Ben H. Read7
[Page 719]

Enclosure 1

Paper Prepared in the Department of State8


The Act is divided into two titles. Title I, made up of eleven chapters, is a permanent body of law concerning the Foreign Service personnel system. Title II, made up of four additional chapters, contains transitional and technical provisions, and amendments to and repeals of other laws. The Act’s provisions are summarized below.



Chapter 1 contains a statement of findings and objectives, definitions, a description of Foreign Service personnel categories and functions, and a statement of the rights and protections of Foreign Service personnel. The statement of objectives reaffirms the principles of merit and impartiality set out in the 1946 Act, and refers as well to the current objectives. The definitions are primarily adapted from the 1946 Act.

The description of Foreign Service personnel categories omits the previous distinction between “Reserve officers” and “Staff officers and employees.” The bill seeks to avoid distinctions which imply preferential status to one category or another, and refers to Foreign Service personnel throughout as “members of the Service” rather than as “officers” and “employees.” The description of functions of the Service includes reference to the Vienna Conventions on Diplomatic and Consular Relations, which are codifications of modern international practice. It also contains a new reference to the role of the Service in providing guidance in the field of foreign relations.

A final section in the chapter emphasizes employee rights, drawing together and emphasizing current law with respect to the applicability of merit principles, protection against discrimination and reprisals for members of the Service, and equal employment opportunity.


Chapter 2 begins by identifying the officers who have primary responsibility for the management of the Service. Chief among these [Page 720] is the Secretary of State, who is responsible for administration of the Service under the direction of the President. It notes that there are certain functions that only the Secretary of State may perform, which are expressly vested in the Secretary of State by the Act, e.g., issuance of government-wide regulations, administration of the Foreign Service Retirement and Disability System, and designation of posts as diplomatic or consular in nature.

The Act also authorizes the Director of the International Communication Agency, the Director of the United States International Development Cooperation Agency and, in more limited fashion, the Secretaries of Agriculture and Commerce (and other agency heads when authorized by law) to utilize the provisions of the Act for their Foreign Service personnel. Chapter 2 incorporates existing law on the authority and responsibilities of chiefs of diplomatic missions with respect to government agencies and personnel, which has not previously been a part of the Foreign Service Act.

Chapter 2 requires that the Foreign Service be administered so as to assure maximum compatibility among agencies authorized by law to utilize the Foreign Service personnel system. It encourages among such agencies the development of uniform policies and procedures and consolidation of personnel functions. It continues the existing statutory directive for compatibility between the Foreign Service and other Federal government personnel systems.

This chapter also provides a statutory basis for two officers who will have significant roles in the administration of the Foreign Service. These are the Director General and the Inspector General, both of whom are to be appointed by the President, by and with the advice and consent of the Senate. The Director General is to assist the Secretary generally in the management of the Service, including interagency coordination. The Inspector General will inspect the operations of posts abroad and offices and bureaus in the Department of State, as well as carrying out functions assigned to Inspectors General in most other departments under the Inspector General Act of 1978.

Chapter 2 also provides that the President will establish an interagency Board of the Foreign Service to advise the Secretary on matters relating to the Service, including matters concerning interagency compatibility. The Board will be chaired by a career member of the Senior Foreign Service, and will include one or more senior representatives of concerned federal agencies.

Finally, this chapter provides for a Board of Examiners for the Foreign Service to develop and supervise examinations to be given candidates for appointment in the Service. The Board is required to review examinations periodically for possible bias and to report its findings annually to the Secretary of State. It will have at least five [Page 721] members from outside the government chosen for expertise and knowledge in the fields of testing or equal employment opportunity.


Chapter 3 provides the authority for appointments in the Foreign Service, and describes the types of appointments which can be made. Appointment as a chief of mission, ambassador-at-large, minister, career member of the Senior Foreign Service (SFS) or Foreign Service officer (FSO) may be made only by the President, by and with the advice and consent of the Senate. Other appointments in the Service may be made by the Secretary; these include limited SFS appointments, FSO candidates, and appointments (limited and career) of all other American and foreign national personnel.

This chapter is intended to strengthen the career nature of the Foreign Service. In particular, it limits non-career membership in the Senior Foreign Service to not more than five percent, and retains the present maximum of five years on limited appointments to the Service.

Chapter 3 strengthens previous expressions of Congressional policy on the desirability of appointing career Foreign Service personnel as chiefs of mission. It also requires additional reporting to Congress on the qualifications of prospective ambassadors, on steps taken to gain needed language competence, and on designations of individuals to serve with the personal rank of ambassador.

All candidates for career appointments must first serve under limited appointments (as is now the case for Foreign Service officers and Reserve officers). The duration of these probationary periods will vary, but may not exceed five years. For the Senior Foreign Service, they will be at least four years. Records of performance by career candidates will be reviewed by boards composed primarily of career personnel before career appointments are granted. Retired members of the Service may be recalled and former career members may be reemployed without undergoing this process.


Chapter 4 governs the basic salaries of Foreign Service personnel, as well as additional compensation based on performance or conditions of service. Chiefs of mission will continue to receive salaries at one of the annual rates specified for levels II through V of the Executive Salary Schedule. However, career SFS personnel who are appointed as chiefs of mission may elect to continue to receive their normal Foreign Service salary and continue to compete for performance pay.

The President will establish a salary range for the SFS comparable to the salaries established by the President for the SES under the Civil Service Reform Act. Below this level, a single nine-class Foreign Service [Page 722] salary schedule for American personnel will supersede the two overlapping schedules that now exist for Foreign Service officers and Reserve officers on the one hand and staff officers and employees on the other. Linkages to the General Schedule will be set by the President. Within-class salary increases, if performance is satisfactory, will be annual for steps 2–10 and every two years for steps 11–14. Provisions are included for use of multiple step increases for outstanding performance, and for withholding them for mediocre performance. Foreign national employees and consular agents will be paid on the basis of locally prevailing compensation practices.

Members of the SFS will be appointed to a salary class, and their promotions will be effected by reappointment to a higher class. Foreign Service officers below the senior threshold, however, will be assigned to an appropriate salary class by the Secretary, and their promotions will be effected without interruption in their Presidential appointments. This change will permit all Foreign Service personnel of comparable rank who are promoted to have their salaries adjusted at the same time under a single procedure.

Chapter 4 establishes a performance pay plan for the SFS similar to that provided by the Civil Service Reform Act for the SES. Recommendations concerning awards of performance pay will be made to the Secretary by selection boards. Additional awards for especially meritorious or distinguished service may be made by the President, as is the case for the SES.

The bill retains the prohibition on premium pay for FSOs, but has new provisions which permit compensatory time off, and which require a report to Congress if any limitation is contemplated on the special differential in lieu of overtime, in terms of numbers eligible or amounts paid.


Chapter 5 continues the existing authority of the Secretary to classify Foreign Service positions in the Department and at posts abroad, and to assign Foreign Service personnel to those positions. A new subsection requires that members of the Service not be assigned to a post in a particular geographic region solely on the basis of race, ethnicity, or religion.

This chapter also facilitates interchange with the Civil Service by authorizing the assignment of non-Foreign Service personnel to Foreign Service positions for specified tours of duty and the assignment of Foreign Service personnel to Civil Service positions. A new feature of the bill is a limitation of four years on the assignment of members of the Foreign Service to non-Foreign Service positions.

[Page 723]

Chapter 5 retains the existing eight-year limitation on the assignment of Foreign Service personnel to duty within the United States, but allows for shorter periods to be set for specific groups by regulation. In addition, it requires that all career Foreign Service personnel accept the obligation to serve abroad as a condition of employment.

At the same time, the bill recognizes the need for periodic service by Foreign Service personnel within the United States. It directs the Secretary to seek to assign all career personnel in the Service to duty within the United States at least once during each fifteen years of service.


Chapter 6 retains the basic concepts of promotion and retention in the Foreign Service based upon demonstrated merit.

This chapter extends the Selection Board process (now applicable by statute only to Foreign Service officers) to all American personnel. Selection Boards, which must include public members, women and members of minority groups, will rank the members of each class on a comparative basis for purposes of promotion, award of performance pay, retention in the senior ranks, and separation of members whose performance falls below the standard of their class.

Chapter 6 also specifically provides a rigorous threshold for entry into the Senior Foreign Service and authorizes the Secretary to prescribe the period during which members of the Service may be considered for entry into the SFS. Promotions into the SFS must be based upon long-term projections of personnel flows and needs designed to provide more predictable recruitment, advancement and career development. A report to Congress on steps taken to insure this predictable flow is required annually.

This chapter continues the authority for retirement based on expiration of time-in-class and extends that authority to all members of the Service who receive salaries comparable to those of Foreign Service officers and who are in occupational categories designated by the Secretary. It eliminates the exemption of those in the top rank from the time-in-class limitations, while providing that those members whose maximum time-in-class expires after they have attained the highest class for their respective personnel categories may continue to serve under renewable limited extensions of their career appointments. At the same time, it provides protection against politicization by statements of Congressional purpose, that time in each senior class before the extension mechanism comes into play shall not be less than 3 years. The grant and any renewal of such an extension would be in accordance with Selection Board recommendations.

Chapter 6 continues the Secretary’s authority to separate a member of the Service for cause, after a hearing. The bill provides that such a [Page 724] hearing will be conducted by the Foreign Service Grievance Board, which will assure appropriate due process protections. This hearing would be in lieu of any other administrative procedure.

This chapter also directs the establishment of a Foreign Service awards system to supplement the Government-wide incentive awards program and to recognize exceptional service to the nation by members of the Foreign Service.


Chapter 7 continues the authority of the Secretary to maintain the Foreign Service Institute and to provide training and counseling. This chapter makes only minimal changes from existing law, but adds a strong new section requiring systematic career development programs for members of the Service. Primarily, it vests authority for the operation of the Institute in the Secretary of State, consolidates in a single chapter various existing authorities for training, career development and counseling, and makes explicit reference to training for family members of Foreign Service personnel.


Chapter 8 continues the Foreign Service Retirement and Disability System as it has existed under Title VIII of the 1946 Act, and incorporates voluntary and mandatory retirement features now in Title VI of that Act, except that the mandatory retirement age becomes 65 on the date of enactment. Those reaching age 60 on or after October 1, 1981 will be covered by this new provision. Changes have been made primarily in style and terminology, and to maintain existing conformity of the Foreign Service Retirement and Disability System. Recent statutory changes to the latter system have been incorporated into the bill in accordance with existing law authorizing such conforming changes.

New provisions have been added to protect the interests of former spouses. Specifically, the Act provides for an automatic pro rata division of retirement annuities and retirement benefits for qualifying former spouses (those married for 10 years or more while the employee was in the Service), unless a court orders a different division within one year of the divorce. This provision will apply only in the case of those who become former spouses after the effective date of the Act. In a related provision, an individual who, prior to the effective date, has a former spouse, may elect to provide a survivor benefit for that former spouse (Sec. 2109). Finally, a spousal agreement may be entered into by affected parties with respect to their respective rights under [Page 725] chapter 8. Such an agreement will be given the same effect as a court order, so the parties may adjust their respective rights without the necessity of obtaining such an order.


Chapter 9 continues the Secretary’s authority to pay travel and related expenses, and to provide for home leave and health care for Foreign Service personnel and their families. The following new discretionary authorities have been added:

—Authority to pay relocation allowances to members of the Foreign Service on domestic transfers.

—Authority to grant an additional R&R trip in extraordinary circumstances.

—Authority to authorize travel for a child when a parent is medically evacuated and the child is unable to remain at post alone.

—Authority to provide one round-trip per year between post abroad and nearest port of entry in the U.S. for children of divorced member of the Service to visit the parent with whom they do not normally reside.

—Authority to authorize travel for family to accompany members on extended travel orders, whether or not such travel is in connection with a reassignment.

—Provision for payment of representation allowance to family members when authorized, as well as to employees.


Chapter 10 draws from the existing system in the Foreign Service established by Executive Order 116369 as well as Title VII of the Civil Service Reform Act which governs Labor-Management relations in the Civil Service. This chapter authorizes collective bargaining on conditions of employment in the Foreign Service, subject to certain excluded areas of management rights comparable to those matters excluded from bargaining under Title VII. This chapter continues the present arrangement of a single agency-wide bargaining unit, and the inclusion of many employees who perform supervisory functions.

Chapter 10 establishes a Foreign Service Labor Relations Board, as an entity under the Federal Labor Relations Authority, to manage this new statutory program. The Board would be chaired by the Chairman of the Federal Labor Relations Authority and would have two public members appointed from nominees approved by the agencies and the [Page 726] exclusive representatives. In addition to the Board, Chapter 10 would retain the disputes panel as constituted under E.O. 11636. However, a major difference is the authority of the panel to make final and binding decisions on negotiation impasses. This chapter also introduces a new, independent third party, the General Counsel of the Federal Labor Relations Authority. The General Counsel would investigate alleged unfair labor practices and would file and prosecute such complaints. The chapter also provides for appeals to the Foreign Service Grievance Board, under negotiated procedures, in disputes arising out of the implementation of collective bargaining agreements.


Chapter 11 follows the major features of the 1946 Act for the resolution of grievances by individuals within the Foreign Service, including appeals from internal agency procedures to the independent Foreign Service Grievance Board. The Board has broad authority to establish its own procedures (which must include a hearing in any case involving separation or other disciplinary action), compel the production of evidence and the attendance of witnesses, and direct remedial action by the Department.

The chapter provides that every grievant has a right to representation of his or her own choice, both at the agency level and before the Grievance Board. The exclusive employee representative, however, is allowed to appear at all grievance proceedings involving members of the bargaining unit.

Also added is the authority of the Grievance Board to direct payment of reasonable attorney fees as may be required by Section 7701(g) of Title 5, United States Code. Deleted from chapter 11 is the authority of the Secretary to reject a recommendation of the Grievance Board on grounds that the recommendation would substantially impair the efficiency of the Service.



Chapter 1 governs the transition of all Foreign Service personnel to the new categories and salary schedules established by Title I of the bill. For pay purposes, all FSO, FSR, FSRU and FSS personnel will be paid as if converted to the new pay schedules, effective the first day of the first pay period beginning after October 1, 1980. It provides that on the effective date of the Act (February 15, 1981) personnel who are already obligated to worldwide availability will convert automatically to the Foreign Service schedule or have the option to join the Senior Foreign Service, depending on their current rank. Personnel not so [Page 727] committed will convert only after they have undertaken an obligation to serve abroad and the Department has certified that there is a need for their services in the Foreign Service. Those “domestic” personnel who are not converted to one of the new Foreign Service categories will be converted into the Civil Service without loss of salary or grade, within 3 years, or otherwise leave the Foreign Service.

This chapter provides that all conversions will be without loss of salary or grade (including protection from downgrading as long as not voluntarily leaving one’s current position), and that persons covered by the Foreign Service Retirement and Disability System may elect to continue to participate in that system.

The Act’s provisions for conversion of “domestic” Foreign Service personnel to Civil Service status will be deferred with respect to the International Communication Agency (ICA), until July 1, 1981, in view of a pre-existing agreement with the labor organization representing the employees who would otherwise be affected on the effective date.


Chapter 2 contains amendments to statutes concerning the Foreign Affairs agencies required by Title I of the bill. These include the relocation of provisions in the 1946 Act which deal with subjects other than Foreign Service personnel, such as the State Department’s authority to accept gifts. This chapter also contains conforming amendments to the authority of other agency heads to utilize the Foreign Service personnel system. In addition, it modifies the basic authority of the Department to allow payment of additional subsistence expenses of security officers on authorized protective missions, and members of the Foreign Service and Department generally when required to spend extraordinary amounts of time in travel status. This chapter also contains necessary conforming amendments to other laws relating to Foreign Service personnel, e.g., the Peace Corps Act and the Arms Control and Disarmament Act.10 The Peace Corps will continue to be authorized to use Foreign Service personnel authorities for its headquarters staff. A new provision requires the Secretary to designate at least two Foreign Service posts or model Foreign competence posts.


This chapter contains a number of amendments to laws applicable to the Government as a whole as they relate to the Foreign Service. These changes include explicit reemployment rights for employees of [Page 728] any agency who accept limited appointment in the Foreign Service, provision of a statutory salary base for Ambassadors at Large, authority to pay advance pay upon any departure from an overseas post when the Secretary determines this to be in the national interest (rather than as currently, only when an evacuation is ordered), authority to pay a separate maintenance allowance at the request of a member of the Service, rather than, as presently, only for the convenience of the government. This chapter also extends to the Foreign Service provisions of existing law regarding attorney’s fees in unfair labor practice and grievance cases, and conforms accumulation of SFS annual leave with the exemption for SES personnel.

For posts where a special incentive for service is determined to be necessary due to especially adverse conditions, the post differential could be as high as 40% of base pay, rather than the current 25% ceiling. A separate new allowance authority would allow a danger pay allowance of up to 25% of base pay, at posts where civil insurrection, civil war, terrorism, or wartime conditions threaten physical harm or imminent danger. However, the increased post differential and danger pay could not be paid simultaneously.


Chapter 4 provides that actions taken under the authority of the Foreign Service Act of 1946 or any other law repealed, modified, or affected by the new Act shall continue in full force unless modified or revoked by current authority. It requires annual reports on steps taken to insure maximum compatibility among agencies employing the Foreign Service personnel system, on conversion of individuals under the Act, concerning the upper and lower limits planned by each agency for recruitment, advancement and retention of members of the Service, for each of the five succeeding years, and the number, names and grades of members of the Service assigned more than one grade higher or lower than personal rank. Finally, it provides that the effective date of the new Act will be February 15, 1981, with certain limited exceptions. These exceptions include: mandatory retirement age is raised to 65 on date of enactment; pay under the new FS schedules begins with the first pay period beginning after October 1, 1980; the five per cent limitation on non-career SFS members for Commerce is deferred until October 1, 1985, with a maximum of ten non-career SFS members in Commerce in the interim; and personnel actions (e.g., awards of performance pay for SFS) may take place on basis of the current evaluation cycle, as if the Act had been in effect at the beginning of that cycle.

  1. Source: National Archives, RG 59, Records of the Under Secretary for Management (M), 1980, Box 7, Chron October 6–10, 1980. No classification marking.
  2. H.R. 6790 was introduced on March 12. The Senate and House agreed to the conference report on September 30 and October 1, respectively. The bill was not enrolled until October 8.
  3. Telegram 263626 to all diplomatic and consular posts, October 2, discusses the “New F.S. Pay Schedule.” (National Archives, RG 59, Central Foreign Policy File, 1979)
  4. Not found.
  5. A proposed signing statement is attached but not printed.
  6. Not found.
  7. Read signed “Ben” above this typed signature.
  8. No classification marking.
  9. See footnote 4, Document 164.
  10. P.L. 87–293 and P.L. 87–297, respectively.