Bush moves to limit pay raise to 3.1 percent next year

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.