Pay Raise Prospects

It's only July and already the House has passed a 3.5 percent pay raise for civilian federal employees for 2008. The Senate appears to be on track to back a similar adjustment. But does that mean federal employees will receive their raises on time next year? Not necessarily.

The House moved quickly to pass the pay raise just before the July recess, as part of the 2008 financial services spending bill. And Tuesday, a Senate Appropriations subcommittee backed the 3.5 percent pay hike in its version of the financial services bill.

But for federal employees to see the result in their paychecks at the start of 2008, a number of steps still must be completed. Once the Senate finishes the financial services legislation, members of each chamber will have to work out the differences between the two versions. After the conference committee reaches agreement, each chamber must pass the final version and President Bush must sign it.

"The Senate has yet to pass any of their appropriations bills, so it's hard to say when we'll get to conference," said Stephanie Lundberg, a spokeswoman for House Majority Leader Steny Hoyer, D-Md.

The target adjournment date for Congress is Oct. 26, and the last possible moment Congress and the president can finish their work on time is Dec. 31. Then the pay increase could go directly into effect for the 2008 calendar year.

If there is a delay in Congress, however, employees will receive part of their raise retroactively. This is what happened in 2003 and 2004, when workers received their raises at least three months late.

The failure of Congress to enact an appropriations bill including the pay raise last year before it adjourned resulted in President Bush putting his recommendation for a 2.2 percent 2007 raise into effect by way of executive order. Labor unions and some lawmakers have said it was the lowest in almost 20 years.

Lundberg said that one foreseeable obstacle to timely approval of the 2008 raise is President Bush's threat to veto the bill over unrelated provisions regarding sanctions against Cuba and changing policies on abortion.

In addition, the president has objected to the 3.5 percent adjustment itself, arguing that it exceeds the average increase in private sector pay measured by the Labor Department's Employment Cost Index. The change in the ECI from September 2005 to September 2006 was 3 percent, the figure the president proposed in his 2008 budget request.

Colleen Kelley, president of the National Treasury Employees Union, said that year after year, NTEU reminds employees that the pay raise is not a guarantee. "This is an annual fight," she said, "especially when the administration continues to say it doesn't agree on parity and tries to act on lesser raises for civilian employees."

Kelley added, however, that the 2008 raise appears to be on track. "The support is there in both the House and Senate," she said, "and now it's just a matter of ensuring that the financial services bill gets passed in time."