Bush advisers send early word on 2007 pay raise

President Bush's advisers have sent him a report on federal pay indicating that if a statutory formula were followed, the across-the-board 2007 white-collar pay raise would be 1.7 percent.

But the formula used to come up with the figure, which is included in the annual report from the President's Pay Agent, comes with an important caveat: the president is under no obligation to use it.

The figure is one piece of information that will be taken into consideration when President Bush develops his 2007 budget request, which he will unveil next week.

If the civilian raise figure that ends up in the budget turns out to be less than the amount the president recommends that military service members receive, members of Congress are likely to push for both groups to receive the higher raise. Some lawmakers already have issued a call for pay parity next year.

The President's Pay Agent is a group made up of Office of Personnel Management Director Linda Springer, Labor Secretary Elaine Chao, and Office of Management and Budget Director Josh Bolten. Its report was submitted to the president on Dec. 13, 2005, and was released by OPM Monday.

The group devised its pay raise figure according to Labor Department statistics and formulas set up in the 1990 Federal Employees Pay Comparability Act, a bill designed to close the wage gap between private and public sector employees. If the full provisions of FEPCA were followed, the president and Congress would have to provide staggering locality pay raises to close the gap between federal and nonfederal salaries across the country. For example, the 2007 locality adjustment for Washington-area employees would be 31.4 percent. But the locality portion of FEPCA has never been close to fully implemented.

Springer, Chao and Bolten suggested circumventing the locality pay increase that would be required under the law because of a "national emergency." The "national emergency" clause has been invoked every year since the law has passed.

"In keeping with this statutory requirement, this report shows the adjustments we would recommend for January 2007 if the methodology and rates required by current law were to be implemented," Bush's advisers stated in the report. "Given the current national emergency, however, we believe it would be unwise to allow the locality pay increases shown in this report to take effect in January 2007."

The group not only advised sidestepping the law; it used the report as a platform to reiterate its support for pay reform across government.

"The Pay Agent has serious concerns about the utility of a process that requires a single percentage adjustment in the pay of all white-collar civilian federal employees in each locality pay area without regard to the differing labor markets for major occupational groups or the performance of individual employees," the advisers wrote.

Market-based compensation is one of the mainstays in administration proposals to reform federal personnel policy, such as the draft Working for America Act. The proposed bill has been floating around Capitol Hill since the summer, but no lawmaker has offered to introduce it.

The Pay Agent also recommended keeping the locality pay areas that were in place for 2006, rejecting the idea of adding Austin, Texas; Memphis, Tenn.; and Louisville, Ky., to the list.