Obama stands firm on 2 percent civilian pay hike

Citing the ongoing economic crisis and a ballooning federal budget, President Obama announced he would use his authority to set a 2 percent pay raise for federal employees starting in January 2010.

The proposal angered employee groups and lawmakers who have pushed for pay parity between civilians and members of the military, who are slated to receive a 3.4 percent raise if appropriators follow the guidelines in the 2010 Defense authorization act, or a 2.9 percent boost if Congress sticks to President Obama's February recommendation. But the Obama administration promised a leading House Democrat that that the president would pursue pay parity in subsequent years.

"A national emergency… has existed since Sept. 11, 2001," Obama wrote in an Aug. 31 letter to House Speaker Nancy Pelosi, D-Calif. "Likewise, with unemployment at 9.5 percent in June to cite just one economic indicator, few would disagree that our country is facing serious economic conditions affecting the general welfare. The growth in federal requirements is straining the federal budget."

Office of Management and Budget Director Peter R. Orszag echoed Obama's sentiments in a July 9 letter to House Majority Leader Steny Hoyer, D-Md. But, Orszag wrote, "The administration shares your commitment to a strong civil service….The administration is therefore committed in future years to the principle of pay parity between the annual pay increase for the federal civilian workforce and members of the armed services."

Under the law governing pay for civilian federal employees, workers are entitled to an across-the-board raise equal to 0.5 percentage points less than the growth in the Labor Department's Employment Cost Index. This year, that would have been a 2.4 percent raise, plus an increase in locality pay. But Obama said the $22.6 billion required to implement that pay hike would be too costly. Congress could still override the president's plan.

Max Stier, president of the nonprofit Partnership for Public Service, criticized Obama for refusing to acknowledge that he simply does not want to raise federal pay.

"We're operating under a fiction where every year, every president cites a national emergency to avoid a pay raise the law otherwise requires for the federal workforce," Stier said. "That's not a way to run a railroad or a way to run a government…. It becomes Kabuki theater, and for an administration that wants transparency, this is not transparency."

Large sections of Obama's letter, including the reference to Sept. 11, and, with one minor alteration, the entire final paragraph, in which the president argued that his proposed raise would not affect federal hiring, are copied verbatim from a similar letter President George W. Bush sent to Congress in 2007, regarding the 2008 pay raise.

A number of pay proposals are advancing in Congress this year. The House version of the fiscal 2010 financial services appropriations bill would follow Obama's recommendation for a 2 percent civilian pay raise, but the Senate's version contains a 2.9 percent boost. Both the House and Senate Armed Services committees have included a 3.4 percent raise for service members in their versions of the fiscal 2010 Defense authorization act.

Leaders of federal employee unions -- including the National Treasury Employees Union, American Federation of Government Employees, and International Federation of Professional and Technical Engineers -- said they were disappointed that the administration was abandoning pay parity as a principle and pledged to continue to fight for higher civil service raises in Congress. Matt Biggs, IFPTE's legislative director, said he expected the final civil service pay raise would be 2.9 percent, while the military raise was likely to be 3.4 percent.

Rep. Gerry Connolly, D-Va., a leading advocate for pay parity, said he would continue to push for higher civilian pay raises.

"To recruit and retain a quality federal workforce, this Congress and the administration must show a commitment to quality pay and benefits," he said.

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