Obama Issues Plan to Give Feds a 1 Percent Pay Raise

President Obama issued an alternative pay plan late Friday, setting an across-the-board increase for civilian federal employees of 1 percent in 2015.

The figure matches the amount the president requested in his fiscal 2015 budget proposal. Obama issued a separate plan providing a 1 percent boost in monthly basic pay rates for military service members. 

Obama alluded to a desire to give feds a larger raise, but said he was not at liberty to do so due to budgetary concerns.

“Civilian Federal employees have already made significant sacrifices as a result of a three-year pay freeze that ended in January 2014 with the implementation of a 1.0 percent pay increase -- an amount lower than the private sector pay increases and statutory formula for adjustments to the base General Schedule. However, as the country's economic recovery continues, we must maintain efforts to keep our Nation on a sustainable fiscal course. This is an effort that continues to require tough choices and each of us to do our fair share."

Under Obama’s plan, locality pay levels would remain at their 2014 levels. Locality pay has been frozen since 2010.

Obama declared that his pay proposal “will not materially affect the federal government's ability to attract and retain a well-qualified federal workforce.”

Federal labor unions had supported measures in both the House and Senate that would have given feds a 3.3 percent raise, though those measure have not yet received a vote in either house.

If the president had not informed Congress of his alternative pay plan for feds by the end of August, then the increase mandated by the 1990 Federal Employees Pay Comparability Act would have kicked in. Under FEPCA, the raise would be determined by the change in the Employment Cost Index minus 0.5 percent. 

Presidents largely have ignored the FEPCA formula in their federal pay raise proposals, preferring to offer their own figure. Congress created FEPCA, which provides an annual across-the-board salary boost and a locality pay adjustment for General Schedule employees, to close the public and private sector pay gap. The Federal Salary Council has said that federal employees are underpaid relative to private sector workers by approximately 34.6 percent.

The reality, however, is that Congress will end up determining whether federal employees receive a pay raise next year.

So far, lawmakers have remained mum on the issue of a federal employee pay raise. The House has passed a bill that would allow a 1 percent raise to go into effect. Unless Congress proactively alters the proposal, Obama’s 1 percent recommendation will become law. 

(Image via Abel Tumik/Shutterstock.com)