Pay Raise Proposed by Bush Would Be Smallest in 18 Years

About 1.8 million federal employees would receive a 1.7 percent increase in their basic pay and a 0.5 percent average increase in their locality pay next year under a plan that President Bush sent to Congress yesterday, administration officials said.

Bush recommended a 2.2 percent average raise in his fiscal 2007 budget, released in February. Under a 1990 pay law, yesterday was the deadline for the president to authorize an alternative plan if Congress had not stipulated a raise.

If federal employees receive an average raise of 2.2 percent next year, it would be their lowest annual salary increase in 18 years, according to congressional aides.

House and Senate spending bills propose a 2.7 percent average raise for federal employees, but the bills seem unlikely to pass in the lame-duck session. Congress, meanwhile, has voted for a 2.2 percent raise for the military, raising the prospect that lawmakers will go along with the smaller increase for the civil service when they wrap up their budget bills.

The president’s plan would give higher locality adjustments to the metropolitan areas with the largest “pay gaps,” as determined by Labor Department surveys comparing federal jobs with their private-sector counterparts.

Under the formula in the president’s plan, federal employees in the Washington-Baltimore area would receive a 2.64 percent pay raise next year, starting with the first full pay period in January, officials at the Office of Personnel Management said.

The highest adjustment would go to federal employees in the New York City area — 3.02 percent. In contrast, the majority of federal employees, who work outside the big cities and are lumped in a “rest of U.S.” category, would receive a raise of 1.81 percent.

Colleen M. Kelley, president of the National Treasury Employees Union, objected to the pay formula at a meeting of the Federal Salary Council in October, saying she was concerned that most federal employees would receive a raise of less than 2 percent.

The council, an advisory group, pulled back from approving the pay plan, and Kelley yesterday called the decision to go ahead with the formula “inappropriate” and “very disappointing.”
She said “an awful lot of unknowns” swirl around next year’s federal pay raise because of disagreements on Capitol Hill over whether to keep the government open on short-term funding or to bundle spending bills into a year-long omnibus measure.

“As far as we are concerned, the 2.7 percent raise is in play and we are going to do all we can to keep that alive,” Kelley said.

By sending Congress his pay plan yesterday, Bush avoided triggering a part of the 1990 law that would have provided federal employees with an overall pay raise of 8.6 percent, which would have met a congressional goal of narrowing differences in salaries between the government and the private sector. Bush said a raise of that size would have cost $8.8 billion, an outlay that he said would interfere with higher priorities, such as maintaining the war against terrorism.

Officials said the pay plan would not be effective until Bush issues an executive order, probably late this month.