The political will to make changes to the federal General Schedule pay system may be lacking at a time when the government is facing a difficult budget environment, panelists critical of the GS system agreed during a recent forum on federal pay.

Speaking at an event organized by the Coalition for Effective Change and held at the Partnership for Public Service, Doris Hausser, a special policy advisor to the director of the Office of Personnel Management when she retired from the federal government in 2007, said she believes the GS system needs to be replaced with a more performance-oriented system.

The law extending the GS system to most white-collar federal employees was passed in 1949, but parts of the system were developed more than 100 years ago, when the federal government consisted primarily of clerical employees whose work output was easily measured, Hausser said. Today, she said, federal managers need additional latitude to make complex performance distinctions and to make the adjustments necessary to attract and retain employees in mission-critical professions.

But the GS system is "a great cost-control mechanism" because federal salaries rise by predictable amounts each year, Hausser said.

"That's one of the main reasons, this is my opinion, why OMB has very little interest in doing away with it. It controls costs - you know what's going to happen," she said, referring to the Office of Management and Budget, the White House agency responsible for ensuring that federal agencies implement the president's budget commitments and priorities. Replacing the GS system would require not only action from OMB but also approval from federal lawmakers.

Hausser added that drawing significantly sharper performance distinctions through a new pay system may not make sense when budget levels are low, because there may not be enough funding to properly compensate top performers while adequately compensating other employees.

Howard Risher, a pay and performance consultant who has done work for OPM, agreed that changing the GS system may not be feasible at this time, although he said the system is antiquated and "has to be scrapped." Instituting pay-for-performance would represent a "complex organizational change" for the federal government that among other things would require significant monetary investments for training managers and employees, Risher said.

"I'm not sure how we get there, quite frankly," he said of ending the GS system.

Jacque Simon, public policy director for the American Federation of Government Employees and the third panel member at the CEC event, defended the GS system, pointing to numerous updates and arguing that federal managers have the flexibility they need to manage employees effectively. "It's actually a very, very good system, . . . [and] it's changed a lot over the years," she said.

But Simon's defense seemed almost beside the point, since the other two panelists had pretty much acknowledged by the end of the event that the federal pay system is not likely to see a wide-ranging overhaul anytime soon. If even its critics are acknowledging the GS system's staying power, maybe it has another 50 or 100 years left in it after all.

In other public sector news:

• Congress approved the Whistleblower Protection Enhancement Act (S. 743), which will strengthen whistleblower protections for federal employees by amending the 1989 Whistleblower Protection Act for the first time since 1994. President Obama is expected to sign the measure into law.

• The U.S. Postal Service announced that it ended fiscal year 2012 with a record net loss of $15.9 billion, compared with a net loss of $5.1 billion for the same period last year.

• A group representing Chicago business leaders warned in a memorandum that Illinois's mounting unfunded pension liabilities have become an "unfixable" problem.

• Unions representing health care workers in Massachusetts and a hospital association in the state disagreed over the significance of a state ban on mandatory overtime for nurses that was signed into law last summer (S. 2400), including the definition of "emergency situation" under the new law.