Clinton budget to include 3.7 percent pay raise

President Clinton's 2001 budget will recommend a 3.7 percent federal pay raise in 2001, the Office of Personnel Management said Thursday.

An OPM official said the budget will also recommend scaling back retirement deductions from federal employees' pay checks and making employees' health insurance premium payments tax-free.

The 3.7 percent average pay raise recommended for next year follows on a 3.8 percent across-the-board increase and an average 1 percent locality pay raise for federal employees this year. Later this year, the administration will decide how to divide the 3.7 percent increase between an across the board increase and locality pay rates.

The reduced retirement deductions would roll back a provision included in the 1997 Balanced Budget Act that called for a gradual increase in employees' retirement deductions, from 7 percent of pay for Civil Service Retirement System enrollees in 1998 to 7.5 percent in 2002. Over the same period, deductions for enrollees in the Federal Employees Retirement System are supposed to increase from 0.8 percent to 1.3 percent. Under the Balanced Budget Act, the deductions would return to their 1998 levels in 2003. Clinton's 2001 budget proposal will recommend returning the deductions to their 1998 levels two years early.

By making health insurance premiums part of pre-tax income, the government would help offset large increases in employees' health coverage costs over the past few years. This year, rates under the Federal Employees Health Benefits Program went up an average of 9.3 percent, following a 10.2 percent increase in 1999 and an 8.5 percent increase in 1998.

The Clinton administration also wants to reverse a delay in pay for many military personnel and some civilian employees. Under the fiscal 2000 budget approved by Congress last fall, pay checks for affected personnel that were originally schedule to be sent out the last week in September were delayed until the first week in October. The move shifted about $4.3 billion in costs into 2001 as a tactic to meet 2000 budget limits. The administration is proposing to move the pay checks back into September.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

  • The Big Data Campaign Trail

    With everyone so focused on security following recent breaches at federal, state and local government and education institutions, there has been little emphasis on the need for better operations. This report breaks down some of the biggest operational challenges in IT management and provides insight into how agencies and leaders can successfully solve some of the biggest lingering government IT issues.

  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.

  • Ongoing Efforts in Veterans Health Care Modernization

    This report discusses the current state of veterans health care


When you download a report, your information may be shared with the underwriters of that document.