Least some folk think we pick on the Sandbox Kids, we aren’t alone. 80 percent of the general public agrees with us.

Gallup's latest poll finds only one in five Americans approving of the job Congress is doing at this time. The public's rating of Congress had shown a very slight improvement in recent months, but the current rating is down again and is among the lowest that Gallup has ever measured dating back to 1974.

Americans' assessment of the job President George W. Bush is doing is also quite negative and has shown little change over the past two months but is almost 1/3rd higher than that of the Congress. About one in three Americans expressing approval of him.

Congressional Job Approval

By historical standards, the current 20% approval rating is among the lowest Gallup has ever recorded. In fact, in the 173 times since 1974 that Gallup has asked Americans to rate the job Congress is doing, Congress' approval rating has been at or below 20% only four times.
Republicans and Democrats do not differ much in their ratings of Congress at this time. About 66% of Democrats say they disapprove of the job Congress is doing, while 73% of Republicans disapprove. Independents' approval rating is poor as well, 74% disapprove of the job they are doing..

Incumbents ought to really be worrying!

Pay Raise - 2008

With all this bickering and back-biting has the 2008 pay raise passed? Nope. Working Fed-Folks are still on track for 3.5%, but don’t spend it yet. It’s not over till the kids make up their minds and the President signs it.

And........ I really hate to say this, but it’s possible that Congress won't be able to reach agreement with the White House on at least some spending bills and that those might be carried over into next year.

If the bill containing the 2008 pay raise is one of them, there could be a repeat of what happened in late 2002, 2003 and 2006 when no appropriations measure specifying a raise was enacted by the end of the calendar year. In those years a raise took effect under a federal pay law formula. Congress acted early in 2003 and 2004 to boost the amount retroactive to the first pay period of the year. Unfortunately the newly elected democrat Congress did not do so early this year, leaving a 2.2 percent increase in place rather than the 2.7 percent figure that had been under consideration for much of last year.
Should the 2008 raise fall under the federal pay law formula, the 2008 raise would be 2.5 percent, according to a congressional analysis. If that happens, the sand-kicking-congress will have cost the average GS-11 about $1,000 over the 2 year life of the raises. Something to remember next year.

Because Congress has not acted on the raise, the President faces a deadline of this Friday, set by a 1990 federal pay law, to decide whether to issue a pay plan for federal employees.

If the President fails to send Congress an alternative plan, the law would require a substantial pay raise -- a base pay increase of 2.5 percent and locality pay increases that would average 12.5 percent. Not a likely happening.

What will no doubt happen is that the president will sidestep the law's requirements by making an emergency declaration and setting out an alternative plan. In some previous years, Bush and former president Bill Clinton have used this discretion to provide raises lower than those stipulated by the law.

COLA?

That’s a different story. Federal retirees will be getting a 2.3 percent increase. While some Fed-Folks refer to their annual raise as a "COLA increase," the reality is that the working Fed-Folks pay raise is determined through the political process.

The annual cost of living increase for retirees is determined through a formula based on statistics from the Department of Labor. Those under the FERS system will be getting a smaller increase but the stalemate and the political battle in Washington won't impact anyone’s retirement check.

Citing escalating trading costs, officials overseeing the Thrift Savings Plan are preparing to restrict the number of interfund transfers that participants can conduct each month.

At the monthly Federal Retirement Thrift Investment Board meeting on last Monday, officials overseeing the 401(k)-style plan said they would begin allowing participants only two interfund transfers per month. Thereafter, additional transfers would be allowed only into the government securities (G) fund.

The change is a result of a recent analysis by TSP officials of the impact of trading activity on fund management and transaction expenses. Officials studied the fund with the highest costs, the international (I) fund, and found that in September and October, the average daily trade amount was $224 million, far above the daily trade amounts of $49 million in 2006 and $27 million in 2005.

Even more compelling, officials noted, was that 63 percent of the $224 million was attributable to participants who had traded eight or more times in the previous 60 days. And 48 percent was attributable to participants who had traded 12 or more times in the previous 60 days.

"Trade volume is up significantly, and the majority of this increased volume is attributable to less than 3,000 TSP participants engaged in frequent trading," said Tracey Ray, chief investment officer of the plan. TSP has more than 3.6 million participants.

Ray noted that on Oct. 19, $371 million was transferred into the I Fund. Three days later, she said, $391 million was transferred back out of the I Fund, and 2,018 of the participants transferring out were ones who had transferred in on Oct. 19. Additionally, in the previous 60 days, 323 of the 2,018 traders had completed 5,804 exchanges of the I Fund for a total trade amount of $1.9 billion.

"What we have here is a small group of people who are making an awful lot of transactions, destructing the ability to manage the fund and creating expenses," said TSP Executive Director Gregory Long.
As a result, the Federal Retirement Thrift Investment Board voted unanimously to limit the number of monthly transactions. Officials plan to announce the new restrictions in a letter that accompanies the annual statement to participants, which is scheduled to be mailed in early February. Implementation will occur in March or April, officials said.

In the interim, however, officials said they would mail letters to the 3,000 participants who are frequent traders, requiring them to stop their activity or face being restricted to requesting interfund transfers via mail until the automated curbs take effect. 

These restrictions are in line with what most large mutual funds have enforced since a trading scandal in 2002, officials said. Some companies have elected to curb frequent trading by creating financial penalties for such behavior, charging redemption fees for shares held less than 30, 60 or 90 days, officials said.

But Long said charging redemption fees for excessive trading is not in the plans for TSP, noting that officials are not trying to punish participants or generate revenue. The goal, Long said, is to reduce transaction costs to the benefit of all.
"Those 3,000 participants will not be happy," Long said. "But my job is to take care of all participants, and this is clearly in the interest of all participants."

Long said the TSP will discuss the plan with the Employee Thrift Advisory Council before moving forward.

President Bush said last week he intends to nominate Douglas Shulman, a top U.S. securities brokerage regulator, to be commissioner of the IRS.

If confirmed by the Senate, Shulman will face pressure to close the $345 billion gap between taxes that are owed to the federal government and those that are actually paid. The IRS has come under criticism for its use of private collection firms to collect on delinquent taxes, a job that can be done more efficiently by IRS employees.
Shulman would replace acting commissioner Linda Stiff, who took over for Mark W. Everson when he resigned (that’s a kind word) earlier this year to become president of the American Red Cross.