1.3 Percent Pay Raise On the Horizon For Feds Next Year

It’s looking increasingly likely that federal civilian employees will receive a 1.3 percent pay raise in 2016, since lawmakers so far have done nothing to block President Obama’s recommendation.

Although there is plenty of time for things to change, the current House version of the fiscal 2016 Financial Services and General Government bill, which an appropriations subcommittee will consider on Thursday, is silent on a pay raise for feds in 2016. It doesn’t include money for one, but it also leaves out language that would prohibit it. The bill does, however, prohibit pay raises for the vice president and other senior political appointees.

The financial services bill, as lawmakers refer to it, typically is the vehicle for such federal pay provisions. It funds the Treasury Department, Executive Office of the President, the Judiciary, District of Columbia, Small Business Administration, General Services Administration, Securities and Exchange Commission, and several other independent agencies.

The House to date has passed five of 12 fiscal 2016 spending bills; none of them contain any language related to an across-the-board cost-of-living pay boost for civilian feds next year. Lawmakers did the same thing last year, and federal workers ended up with the 1 percent pay increase that Obama recommended for 2015. The Senate has not yet passed any fiscal 2016 spending bills. The current fiscal year ends on Sept. 30.

If there is no specific legislative language that provides funds or prohibits an across-the-board raise in any bills -- either stand-alone or omnibus legislation -- then the president has the authority to determine a pay raise based on the Employment Cost Index.

The president has until Aug. 31 to formally announce his 2016 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 2016, that is around 1.8 percent.

Presidents, however, largely have ignored the FEPCA formula in their federal pay raise proposals, preferring to offer their own figure, which they are allowed to do under law. 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.

Obama also has proposed a 1.3 percent pay boost for service members next year, but the House fiscal 2016 Defense spending bill, approved by the Appropriations Committee earlier this month, calls for a 2.3 percent increase for troops. The House version of the Defense authorization bill, which authorizes funds for Defense spending, was silent on a pay raise for service members. By not suggesting an alternative, committee members are embracing an automatic cost-of-living adjustment of 2.3 percent for service members in 2016, but also tacitly allowing Obama to intervene. The Senate’s fiscal 2016 Defense authorization bill, which the chamber is debating on the floor this week, specifically calls for a 1.3 percent pay raise for service members.

Service members received a 1 percent raise in 2014 and 2015.

The formula for determining service members’ annual pay increase is based on the Employment Cost Index and the growth in private-sector wages. But under the law (Title 37, Chapter 19, Section 1009) the president has the authority to set an alternate pay raise for military personnel, citing a national emergency or fiscal concerns, if Congress doesn’t pass legislation adjusting the amount or canceling it.

The fiscal 2016 Legislative Branch appropriations bill, which the House passed in May, freezes lawmakers’ pay again. A freeze on salaries for members of Congress has been in effect since 2010.

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