Obama Has Until Aug. 31 to Formally Propose a 2014 Fed Pay Raise

Another federal pay raise deadline is looming.

Congress is in recess and Washington is (relatively) quiet, so it’s easy to forget that Aug. 31 is the deadline by which President Obama has to announce his 2014 pay raise proposal for federal employees.

If the president doesn’t inform Congress of his alternative pay plan for feds by that date, then the increase mandated by the 1990 Federal Employees Pay Comparability Act kicks in. Under FEPCA, the raise would be determined by the change in the Employment Cost Index minus 0.5 percent. For 2014, that equals 1.3 percent, a slightly higher increase than Obama’s proposal of 1 percent in his fiscal 2014 budget.

Obama’s recommendation should come this week or next. He is expected to formally propose a 1 percent across-the-board pay hike for civilians and keep locality pay rates at their current levels.

In 2012, Obama announced his proposal for the 2013 federal pay raise to congressional leaders in an Aug. 21 letter. Congress eventually rejected Obama’s proposed 0.5 percent raise for feds in 2013 in March, as part of the continuing resolution to keep the government open.

Presidents largely have ignored the FEPCA formula in their federal pay raise proposals, preferring to offer their own figure. Congress created FEPCA, which provides an annual across-the-board salary boost and a locality pay adjustment for General Schedule employees, to close the public and private sector pay gap. The latest Federal Salary Council report concluded that federal employees are underpaid relative to private sector workers by approximately 34.6 percent.

The reality, however, is that Congress will end up determining whether federal employees receive a pay raise next year; civilian workers have been under a pay freeze since 2010.

So far, lawmakers have not shown much enthusiasm for ending the three-year freeze on federal employees, despite Obama’s repeated calls to do so. None of the House fiscal 2014 spending bills to date contain funds for a civilian pay raise. The House has passed four of the 12 spending bills for fiscal 2014: Defense; Energy and Water Development; Homeland Security; and Military Construction, Veterans Affairs and Related Agencies. The Homeland Security and Military Construction-VA bills did not endorse a civilian pay raise, but didn’t forbid it either.

“The committee does not include requested funding for a civilian pay increase,” lawmakers wrote in both of those spending bills. “Should the president provide a civilian pay raise for fiscal year 2014, it is assumed that the cost of such a pay raise will be absorbed within existing appropriations for fiscal year 2014.”

The House Defense spending bill also does not include money for a civilian pay raise next year. The current House and Senate Financial Services and General Government spending bills, typically the vehicle for federal pay provisions, leave the decision to Obama by omitting language related to an across-the-board raise for government workers. The Senate Defense spending bill, which the Appropriations Committee approved before the congressional recess, contains a 1 percent raise in 2014 for Defense civilian employees.

FEPCA allows the president through an executive order to set a pay raise for government employees if Congress doesn’t specify one and doesn’t pass legislation prohibiting it. But there’s still plenty of time left in 2013 for lawmakers to extend the federal pay freeze for another year, one way or another.