GovernmentExecutive.com

A House panel on Wednesday authorized a 3.5 percent pay increase for members of the military and approved language that would significantly scale back a controversial personnel system at the Defense Department.

The House Armed Services Committee backed the portion of the 2008 Defense authorization bill containing the 3.5 percent increase during a markup session that lasted into the night. That figure, which is half a percent higher than the raise proposed by the Bush administration, likely will give federal labor unions an edge in pushing for an equivalent raise for civilian federal employees.

House Majority Leader Steny Hoyer, D-Md., hailed the approval of the raise Wednesday, and added that he would urge his colleagues to back an equal increase for federal civilian employees.

"In keeping with the long-standing bipartisan principle of pay parity, the 3.5 percent pay adjustment should also extend to federal civilian employees," Hoyer said. "Federal employees make significant contributions to the progress of this nation, and they too deserve a fair pay adjustment."

A separate portion of the authorization bill passed late Wednesday contains a provision to overhaul the Pentagon's implementation of its National Security Personnel System, which has been challenged by federal labor unions as limiting the collective bargaining and appeals rights of the department's civilian employees.

The bill includes provisions that would restore employees' collective bargaining and appeal rights and would require the department to bargain with unions before implementing changes to its pay-for-performance system.

In the 2004 Defense authorization bill, Congress granted the department authority to create a new human resources system, based on the notion that the current system was too rigid and outdated to allow the department to respond to modern threats of terrorism.

But the proposed changes spurred strong opposition from federal labor unions, which filed a lawsuit against the system last year. A federal judge ruled that portions of the system that limited employee collective bargaining and appeal rights were illegal. An appeal of that ruling is pending.

In the meantime, labor unions have been lobbying Congress to intervene in the labor relations and pay issues.

"Pay for performance is an idea that can work, but only if it is implemented correctly," said Richard Brown, president of the National Federation of Federal Employees. "We are afraid that if [Defense] is making all of the decisions on pay without input from the employees, the workers are going to end up with the short end of the stick."

The Senate is scheduled to take up its version of the authorization bill next week.