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Mr. Chairman and Members of the Subcommittee, I am pleased to participate in your review of the government's experience with the voluntary separation incentives authorized by the Federal Workforce Restructuring Act of 1994. Since the authority of civilian agencies to offer incentives under that act expired in March, pressure may mount to reinstate that authority as agencies face the prospect of further employment cuts.

In accord with the Chairman's letter of invitation, my testimony today will focus on three concerns.

• Are separation incentives an effective way to reduce federal employment?
  
  
• What are the costs and savings of the other methods by which the government may reduce staff?
  
  
• How will the separation incentives affect the financing of the retirement system?

My answers to these questions will be drawn largely from the 1993 Congressional Budget Office (CBO) study Reducing the Size of the Federal Civilian Work Force. The report examined the costs, savings, and other consequences of separation incentives and the various other methods the government can use to separate employees and reduce federal employment.

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