Clinton Approves Pay Hike

September 2, 1997

THE DAILY FED

Clinton Approves Pay Hike

As expected, President Clinton approved pay increases averaging 2.8 percent for federal employees under the General Schedule next year. The raise will be divided between a 2.3 percent base pay increase and locality pay raises that will average 0.5 percent.

The approval for the raise came in the form of alternative pay plan, issued under the Federal Employees Pay Comparability Act of 1990. In the absence of such an alternative plan, FEPCA formulas would have required an average raise of about 10 percent next year.

Such an increase, said Clinton in a letter to congressional leaders on Friday, "either would threaten our achieving balance by 2002, or force deep cuts in discretionary spending or federal employment to stay within spending targets."

The Clinton Administration has consistently rejected formulas established under FEPCA for determining federal pay increases, and has argued that the methodology for determining the gap between federal and nonfederal pay is flawed.

Clinton said the bulk of the increase would come in the form of base pay in order to give all employees a "meaningful raise," since many of them do not receive locality pay.

Clinton said his decision to once again reject FEPCA's guidelines for federal raises would have little affect on agencies' ability to recruit and retain workers.

"Due to our continuing efforts to reinvent government, creating a government that works better and costs less," he wrote, "the number of federal employees continues to fall; consequently, hiring and attrition are low. In addition, should the need arise, the government has many tools, such as recruitment bonuses, retention allowances, and special salary rates, to maintain the high quality work force that serves our nation so very well."

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