GovernmentExecutive.com

President Bush has moved to limit the pay increase for white-collar civilian federal employees under the General Schedule to 3.1 percent next year, with no additional pay for workers based on labor costs in the areas where they work.

Under federal law, the president had until the end of November to propose an alternative to pay levels set under procedures laid out in the 1990 Federal Employees Pay Comparability Act. Under the law, employees would have been due the 3.1 percent raise next year, plus locality pay increases averaging 18.6 percent.

On Friday, Bush sent a letter to House and Senate leaders saying that he would implement an alternative pay plan, providing just the 3.1 percent across-the-board raise, with no locality pay.

"A national emergency has existed since Sept. 11, 2001," Bush wrote in the letter. "Full statutory civilian pay increases in 2003 would interfere with our nation's ability to pursue the war on terrorism. They would cost about $13.6 billion in 2003 alone - $11.2 billion more than the 2.6 percent overall federal civilian pay increase I proposed in my 2003 budget - and would build in later years. Such cost increases would threaten our efforts against terrorism or force deep cuts in discretionary spending or federal employment to stay within budget."

Members of Congress have worked since Bush released his budget to provide a 4.1 percent raise for civilian workers in 2003, the same amount that uniformed members of the armed services will receive.

The House in July approved a 4.1 percent average raise for civilian employees as part of the fiscal 2003 Treasury-Postal appropriations bill. The Senate Appropriations Committee also approved the pay raise in its version of the fiscal 2003 Treasury-Postal bill, but the full Senate didn't vote on the measure before adjourning for the year.

When the House and Senate return in early January to finish fiscal 2003 spending bills, they could vote to provide the 4.1 percent raise.

In October, the Federal Salary Council issued recommended locality-based raises based on the 4.1 percent raise then working its way through Congress. The council assumed a 3.1 percent across-the-board increase and tacked on an average 1 percent locality-based raise on top of that. Under the council's recommendations, raises would vary from 4.03 percent in places like Huntsville, Ala., and Indianapolis, to 4.87 percent in San Francisco. (For a full list, click here).

The council's recommendations have been adopted in past years, but Bush chose to overrule them this year.

Bush said he did not believe his decision would "materially affect" the government's ability to attract and retain a quality workforce. "Inflation, as measured by the Consumer Price Index, is at 2.1 percent, well below the 3.1 percent across-the-board pay increase already mandated by current law, and federal quit rates are at an all-time low of 2.1 percent per year, well below the overall average quit rate in private enterprise," he wrote in his letter.

COMMENTS

• Wa, wa, wa. This is the anthem of many federal workers in this day. You have a job. Count yourself fortunate and suck it up. Many of my neighbors are ex-Sprint, ex-Farm Land, ex-airline, ex-this and that. These people wonder how they will keep their homes and feed their families. Many are at an age where they will be lucky to find new employment. The federal worker is fortunate to have good pay, health and life insurance, and a secure retirement program while others have neither. You are in a much more stable environment than many others. So put a sock in it. Warren Norris Posted March 17, 2003 11:58 AM
• As a 29-year federal employee, I am appalled by the comments berating the 3.1 percent pay raise as inappropriate. We are not entitled to a raise every year, although I do appreciate them. It is apparent that the "me" generation is in full force in the federal workplace. Furthermore, federal employees as a whole do not wake up in the middle of the night wondering if they will still have a job next week. They do not worry about salary cuts or loss in benefits— although we may gripe a bit about insurance costs, etc. But most importantly, when the economy is slow or in recession, federal employees do not participate as our neighbors in the private sector do. We still have our jobs and or pay is not reduced. Sign me as one who truly appreciates the president recognizing the work that dedicated federal workers perform by approving a 3.1 percent pay raise. Shem Peachey Posted March 3, 2003 12:04 PM
• I read with interest the letter from the SESer who decided that the difference between a 3.1 percent and 4.1 percent raise was insignificant for most federal workers. In the short term, he’s pretty much correct. Unfortunately, President Bush announced a 2 percent raise for 2004 (a .7 percent decrease). This takes all creditability away from the SESer's argument because, over time, the impact of these reductions can be costly. Let's look at an example: Assuming a worker is a GS-12 step 1 with 25 years of service remaining and receives a 4.1 percent increase in each year resulting in career earnings of $2,825,084. If the worker received a 3.1 percent increase this year and an increase of 4.1 percent for the remaining 24 years they would earn $2,798,483, a difference of $26,602. Not real significant? What if the same worker received a 1% reduction each year for 25 years (3.1 percent instead of 4.1 percent)? Career earnings would be reduced to $2,478,431, a difference of $320,051. Of course this analysis does not cover the effects of locality pay, lost pension contributions or the time value of money. You can juggle the numbers all you want, but the bottom line is that to ensure their long-term financial health, federal workers should fight for every percentage point. Anonymous Posted March 3, 2003 12:04 PM