Bush administration mulls 2 percent raise in 2004

Federal employees would get a 2 percent pay raise in 2004, the smallest increase in a decade, under plans being weighed by the Bush administration.

A 2 percent raise would also fall below the raise called for under federal law. The formula for across-the-board pay raises for federal workers calls for a 2.7 percent base pay raise in January 2004. If recent practice were followed, employees would get an additional 1 percent average locality pay hike, for a total raise of 3.7 percent.

Instead, the Bush administration would base the federal raise on inflation, rather than on the statutory formula. Inflation, as measured by the Labor Department, was about 2 percent from October 2001 to October 2002.

Richard Emery, assistant director for budget review at the Office of Management and Budget, told federal budget officers at a Nov. 20 meeting that the 2004 raise would be based on inflation and that he expects the raise will be 2 percent, according to minutes of the meeting.

OMB spokeswoman Amy Call said President Bush has not yet made decisions on the 2004 budget, which will be released in February. The president usually recommends a federal pay raise in his budget proposal. "It's premature to speculate on what his decision will be," Call said.

The Bush administration has taken heat from federal employee unions and Washington-area lawmakers in recent months over the 2003 pay raise. The administration proposed a 2.6 percent pay raise for 2003 in its budget last February. The House and a Senate panel approved a 4.1 percent pay raise this summer, but Congress failed to set that figure in law before it adjourned. Last month, President Bush said federal employees would get a 3.1 percent pay raise in January. Rep. Steny Hoyer, D-Md., and other lawmakers have promised to pass a retroactive raise of 4.1 percent when Congress reconvenes next year.

Diane Witiak, a spokeswoman for the American Federation of Government Employees, said a 2 percent pay raise in 2004 would be insufficient.

"These types of increases are just pretty much meaningless," Witiak said. "AFGE is going to be fighting very hard to come up with a decent pay system that recognizes federal employees for the dedicated professionals they are and compensates them accordingly."

Once President Bush proposes a 2004 pay raise in his budget in February, Congress will have the opportunity to overrule him through legislation.

Federal pay raises since 1994 have ranged from a low of 2.4 percent in 1996 to a high of 4.8 percent in 2000.