Nearly 4 years ago, in my Inaugural Address, I promised the American people that we would ``make government work.'' We are making some very important progress in keeping that promise with the enactment of the legislation I am signing.

The current merit pay system has been found seriously wanting by the Office of Personnel Management, the employing agencies, the Comptroller General, and, not least, the employees themselves. Further, the Grace commission report on the Government's personnel system found that we suffer from a ``failure to properly recognize excellent performance with incentive awards and additional step increases'' and that there is a ``lack of credibility in the performance award (bonus) program for career executives.''

This bill responds to criticisms of the present system and strengthens and improves merit pay in a meaningful way. It is the product of a lot of hard work on the part of this administration and key members of both parties in the Congress with a strong interest in improving the system of paying and rewarding our managers and executives, including Senators Paul Trible and John Warner and Congressmen Frank Wolf and Bill Dannemeyer.

The changes this bill will make in our merit pay system for managers are very important indeed. These changes will ensure that we recognize our very best performers with meaningful financial rewards, both through the annual performance appraisal process and through special awards. In addition, this new system will help pave the way toward applying these important changes in the incentive and reward system to the rest of the Federal white-collar work force in the near future. Then, finally, performance will become the central feature of the Government's personnel system.

Senior executives will find much in this legislation to cheer about, too, not least of which is a change that will enable them to receive all of a bonus or Presidential rank award, and not just the amount permitted under the pay ``cap.'' They will also have improved job security in case of reductions in force and will be given more notice than at present if they are to be reassigned to a different part of the country.

Finally, and very importantly, this measure contains significant changes that will improve equity for spouses under the Federal Government's employee retirement system. This set of changes embodies all of the major provisions of a bill that the administration submitted to the Congress. It permits former spouses of Federal employees to receive survivor benefits in accordance with orders from State courts. It also requires consent by a spouse before an employee can waive survivor benefits. These changes are similar to those enacted for private sector pension plans earlier this year with the active support of the administration.

I want to thank all of those who worked so hard to bring about passage of this bill this year and say to Federal employees: We want to give you all the encouragement we can to do your very best work, and we want to see that you are rewarded for it. This legislation should go a long way toward achieving that end and establishing an effective partnership for ``making government work.''

Note: As enacted, H.R. 2300 is Public Law 98 - 615, approved November 8.