Federal employees would receive a 3.1 percent pay increase in fiscal year 1999, but would lose the option to switch pension systems, under the Clinton administration's proposed budget.
The raise would be the largest since 1994, when workers received a 3.7 percent increase. Employees received a 2.8 percent raise for fiscal year 1998.
Still, federal union leaders, who had suggested implementing a 6 percent pay increase, expressed disappointment with the announcement.
"The President's continued abuse of the law, which calls for equitable pay raises for federal employees, is inexcusable," Bobby Harnage, national president of the American Federation of Government Employees said. "And the attempt to keep pay at its current low levels--as was done in times of supposed economic emergency--is absurd."
In December 1997, four labor organizations sent a letter to Office of Personnel Management Director Janice Lachance that urged the administration to "address the heretofore unaddressed real and/or imagined pay setting methodology."
"The issue of setting appropriate federal employee pay has a long, tortuous history," the letter said.
Lachance said she was confident "a fair and equitable situation" would be found, but union leaders are not satisfied.
A spokesman for the Federal Manager's Association called the proposal "disappointing, but not surprising."
"It's safe to say that no other group of Americans has done more to reduce the nation's indebtedness than federal employees," Harnage said. "While the President proudly boasts that our government is smaller than ever yet more efficient and cost-effective, he continues to reduce our pay while increasing expectations."
The Federal Salary Council, a body that recommends raises each year under the 1990 Federal Employees Pay Comparability Act, called for a 13 percent pay raise in 1999. But the Clinton Administration has never accepted the council's recommendations because officials disagree with its methodology.
Harnage vowed to fight the administration's pay proposal. "Politicians have gotten away with stiffing federal employees in the past . . . that won't work this time," he said.
The administration's budget proposal would also cancel an open season that would allow about 1 million federal workers hired before 1983 to consider switching from the Civil Service Retirement System into the Federal Employees Retirement System. The open season would begin July 1 and run for six months. Some employees who are under CSRS would like to switch to FERS to take full advantage of the Thrift Savings Plan, the government's 401K-style investment program.
Clinton used his line-item veto power to cancel the provision in October when it was part of the Treasury-Postal Appropriations Bill, but the National Treasury Employees Union filed suit claiming the President had exceeded his statutory authority.
In early January, NTEU officials and the Justice Department agreed on a settlement that would effectively rescind Clinton's veto of the provision.
The Clinton budget predicts that repealing the open season will save the government more than $1 billion through 2003. Agencies must match up to 5 percent of employees' contributions to the Thrift Savings Plan under FERS. Agencies make no matching contributions to the TSP under CSRS.
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