A 2023 Pay Raise Update, and More

A House panel on Wednesday unveiled its fiscal 2023 appropriations bill for financial services and general government, providing insight as to where lawmakers are headed on a potential 2023 pay raise for federal employees.

The House Appropriations Committee’s subcommittee on financial services and general government has scheduled a markup for the bill Thursday, when members will have the opportunity to propose amendments to the package before it heads to the House floor. The bill includes a $9 million increase to the White House Office of Administration over fiscal 2022, in part to pay for newly paid internships in the Executive Office of the President, a $1 billion increase to the Internal Revenue Service, as well as $75 million increase to the budget of the Office of Personnel Management.

The bill also serves as the vehicle by which Congress may overrule the president’s pay raise plan for federal workers. But at least in the initial version of the bill, it makes no mention of changes to federal employee compensation, effectively endorsing President Biden’s pay plan.

In March, Biden released his fiscal 2023 budget proposal, which includes an average 4.6% pay raise for federal civilian employees. It is unclear how that would be divvied up between an across-the-board increase to basic pay and an average increase in locality pay—traditionally, 0.5% of an overall pay raise figure has been set aside for locality pay—but the figure marks the largest pay increase federal workers have seen since 2002.

Although House appropriators appear content with Biden’s 4.6% raise proposal for now, that view is not shared by all House Democrats. In April, 62 lawmakers urged leaders on the appropriations committee to provide federal employees with a 5.1% average pay raise next year, in line with legislation introduced by Rep. Gerry Connolly, D-Va., and Sen. Brian Schatz, D-Hawaii, citing feds’ tireless work during the pandemic as well as rising inflation.

A mid-year gas mileage reimbursement adjustment

The Internal Revenue Service announced last week that it would increase the maximum gas mileage rate that is allowed to be deducted as a business expense for the rest of 2022, a move that effectively increases the amount federal employees can be reimbursed for official travel conducted in a personal automobile.

The General Services Administration’s gas reimbursement rate for employees driving their own cars for work purposes tracks the IRS’ mileage rate. Last December, the IRS set that rate at 58.5 cents per mile for 2022, but that increase came before Russia invaded Ukraine, which, combined with inflation, caused gas prices to skyrocket.

Last week, the National Treasury Employees Union urged IRS Commissioner Charles Rettig to issue a rare mid-year increase to the reimbursement rates. And on June 9, the IRS announced it would increase the rate by an additional 4 cents from the start of 2022, to 62.5 cents per mile, beginning July 1.

“The IRS is adjusting the standard mileage rates to better reflect the recent increase in fuel prices,” Rettig said in a statement. “We are aware a number of unusual factors have come into play involving fuel costs, and we are taking this special step to help taxpayers, businesses and others who use this rate.”