Biden’s 2% raise more likely upon advancement of Senate defense policy bill

It’s only June, but federal employees’ chances of receiving a pay raise larger than President Biden’s proposed 2% average increase are already waning.

Last week, House appropriators advanced their Financial Services and General Government spending bill for fiscal 2025. Though the measure is typically the avenue for overriding a president’s pay raise plan for civilian employees, it is silent on federal employee compensation, effectively endorsing the president’s proposal.

When Biden released his fiscal 2025 budget plan in March, he called for a 2% average increase to federal employee pay next year. Although Biden did not specify how that figure would be split between across-the-board increases in basic pay and an average boost to locality pay, traditionally presidents have set aside 0.5% of the overall raise figure for locality adjustments.

Another signal that lawmakers are reticent to override the president’s pay plan came last week, as the Senate Armed Services Committee marked up and advanced by a 22-3 vote its annual must-pass bill: the 2025 National Defense Authorization Act. The Senate version of that bill confirms affirms Biden’s pay raise policy for 2025: civilian Defense Department workers would receive a 2.0% average increase, while military service members are in line for a 4.5% increase.

The bill also provides a boost to the basic pay of servicemembers in the E-1 through E-3 pay grades. And it codifies in law federal agencies’ authority to hire military spouses through a non-competitive hiring process, as spelled out in Office of Personnel Management guidance last November.

Biden’s pay raise plan raised eyebrows when he first released it in March. Not only was the 2% average raise for civilian feds well below his previous pay raise plans as president, it fell short of the long-time Democratic principle of providing pay parity across the federal government’s civilian and military workforces.

There is still time for lawmakers to amend Biden’s plan. The Senate Appropriations Committee has yet to publicly weigh in on any of the annual funding bills, and House Democrats, such as Rep. Gerry Connolly, D-Va., who has introduced legislation to increase federal worker pay by 7.4%  on average in 2025, can still file amendments ahead of the House Financial Service and General Government spending bill’s floor debate.

On the Biden administration’s side, the president must formalize his alternative pay plan by the end of August. Otherwise, automatic spikes to locality pay will kick in, as formulated by the Federal Employee Pay Comparability Act. For decades, presidents have used this tool to avoid much larger pay increases from taking effect.