April 10, 2001President Bush has proposed a 3.6 percent average pay raise for civilian federal employees next year in the administration's full budget, released Monday. The budget restates Bush's plan to give military personnel a 4.6 percent raise in fiscal 2002, uncoupling military and civilian pay for the first time since 1987. Both the Senate and House have passed budget resolutions that endorse pay parity for civilian and military personnel next year. Federal unions were quick to criticize the administration's decision. A 3.6 percent pay hike is "not only extremely disappointing, but totally inadequate," said Colleen Kelley, president of the National Treasury Employees Union. "[The 3.6 percent raise] doesn't begin to meet the requirements of the  Federal Employees Pay Comparability Act or follow the tradition of pay parity," echoed Magda Lynn Semour, a spokeswoman for the American Federation of Government Employees. Both unions pledged to continue the fight for pay parity in Congress, where a bipartisan group of Washington-area lawmakers has spearheaded efforts to give military and civilian personnel the same raise next year. "While I do not oppose the President's budget, I'm in strong support of pay parity between military and civilian employees," said Rep. Tom Davis, R-Va. "Congress has sent this administration a strong signal that federal employee pay parity is a priority," said Rep. Jim Moran, D-Va. A spokesman for the Office of Management and Budget defended the administration's decision. "We put forth the amount that we thought was appropriate," said OMB spokesman Chris Ullman. When asked if the 3.6 percent raise represented the administration's final position on the pay parity issue, Ullman said, "that's what we've put in the budget." The budget provides additional details on the President's plans to improve the delivery and cost-effectiveness of federal benefit programs. Agencies will still be required to make higher contributions to the retirement fund under the Balanced Budget Act of 1997, but federal employees will not. The fiscal 2001 Treasury-Postal and general government appropriations bill included language that repeals higher contributions towards retirement that federal employees had been paying since January 1999. The administration also plans to cut the processing time for Federal Employees' Retirement System annuity claims to an average of 90 days by 2002, reducing the processing time by half from 2000. The budget alludes to a number of options to reduce health care costs under the Federal Employees Health Benefits Program. The administration will look at "incentives to federal employees and annuitants to choose their plans wisely," the budget says. One incentive under consideration is the use of differential premium contributions, a practice used widely in the private sector. Under differential premium contributions, the government would contribute a different amount toward the health plan's premium based on a rating system that would rate the plan on quality and efficiency. The higher the plan is rated, the more the government will contribute to the premium.
April 10, 2001