Pay raise fray

The battle over the 2002 federal pay raise began in October 2000. That's when the Labor Department issued the Employment Cost Index measuring the change in labor costs from September 1999 to September 2000. Under the 1990 Federal Employees Pay Comparability Act, the base federal pay increase is calculated by subtracting 0.5 percent from the ECI. Based on the change in the ECI announced on Oct. 26, the base pay raise for federal workers in January 2002 would be 3.6 percent. During part of his tenure, President Clinton added an average 1 percent to the raise for the 31 metropolitan areas that received locality-based increases, so a 4.6 percent average pay raise for federal workers in 2002 seemed likely. Military raises are calculated by adding 0.5 percent to the ECI, so a 4.6 percent raise for military personnel was also predicted. On the campaign trail, President Bush promised big military pay raises. In February, a few weeks after he took office, Bush pledged $1.4 billion for military pay increases, enough for a 4.6 percent across-the-board raise plus targeted raises for certain ranks or certain hard-to-fill job categories. Washington-area lawmakers then sent a letter to Bush urging him to be generous with civilian federal pay raises as well. At the end of February, Bush issued a budget blueprint reiterating the plan for a 4.6 percent military raise. The blueprint never mentioned the amount of the civilian pay raise, but administration officials said that agencies had been instructed to assume a 3.6 percent average civilian pay raise in their budget calculations. Officials also said they had not decided on a pay raise yet and would make a final decision by April. In March and early April, the House and Senate passed a budget resolution calling for pay parity between military and civilian personnel and a 4.6 percent raise for both groups. Then on April 10, the Bush administration issued its budget proposal and officially endorsed a 3.6 percent average civilian pay raise, setting the stage for a battle with Congress. Office of Management and Budget officials said the lower civilian raise was justified because federal workers, unlike military personnel, had received several enhancements in benefits in recent years. Pre-tax health benefits, lowered retirement plan contributions and mental health care benefits were all cited. In addition, a 3.6 percent raise would cost $900 million less than a 4.6 percent raise, according to OMB. Many federal workers challenged the OMB officials' rationale on benefits, arguing that military personnel get better benefits than civilian personnel. Lawmakers, including Sen. Fred Thompson, R-Tenn., spoke out for a 4.6 percent average raise for federal workers, and in May, House and Senate negotiators issued a final budget resolution calling for a 4.6 percent raise for military and civilian personnel. House appropriators then began budgeting for a 4.6 percent average civilian pay raise in some of the 13 annual spending bills that fund the government. That prompted a protest from the Bush administration in June. "We do not believe that military pay and civilian pay raises should necessarily be automatically linked," Bush officials said in a statement that was issued on several appropriations bills. At the end of June, the Bush administration announced that it would give military personnel a 4.6 percent across-the-board raise and then spread targeted raises totalling $1 billion among the troops. Every service member would get a raise of between 5 percent and 10 percent. In July, Rep. Steny Hoyer, D-Md., introduced an amendment to the 2002 Treasury-Postal appropriations bill that would force Bush to give federal employees a 4.6 percent average pay raise next year. The Bush administration again announced its opposition to the higher raise. But the House approved the bill with the 4.6 percent raise anyway, and the Senate began moving in that direction just before lawmakers left Washington for their August recess. If the full Senate approves a 2002 Treasury-Postal spending bill with the higher raise, Senate and House negotiators will likely issue a final version of the bill that includes the 4.6 percent raise. President Bush could veto the bill because of the provision, or force the provision out in back-room negotiations over next year's appropriations level. Or he could let it slide and accept the 4.6 percent average raise for civilian workers next year. Buyout Watch

The Defense Department would be able to offer buyouts to civilian employees in fiscal years 2002 and 2003 under the 2002 National Defense Authorization bill (S. 1155). The Agency for International Development could offer buyouts to employees in Washington, D.C. in 2002 under the 2002 Foreign Operations spending bill (H.R. 2506). And under the 2002 legislative appropriations bill, the Government Printing Office would be able to offer buyouts during the next three fiscal years (H.R. 2647).