Obama sets 2 percent civilian pay hike for 2010

President Obama late Monday reiterated that he will limit the base pay raise for civilian federal employees to 2 percent in 2010.

In a letter to House Speaker Nancy Pelosi and Vice President Joe Biden, the president invoked his power to override the statutorily required annual across-the-board and locality pay increases in times of emergency or economic hardship.

"A national emergency… has existed since September 11, 2001," Obama wrote. "Likewise, our country continues to face serious economic conditions affecting the general welfare and most Americans would not understand or accept that federal employees should receive an average pay increase of 18.9 percent while many of their fellow citizens are facing employment cutbacks or unemployment."

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, predicted to be 16.5 percent by a survey of the Bureau of Labor Statistics. As he argued in August, Obama said the $22.6 billion required to implement the statutorily required pay hike would be too costly.

Congress could still override the president's plan. But since July, competing pay provisions have languished in the fiscal 2010 Financial Services appropriations bill. The Senate's version of the legislation includes a 2.9 percent civilian raise for 2010, while the House bill follows Obama's initial budget request for a 2 percent increase. The House passed its bill in late July, but the full Senate has yet to vote on the measure, and it is likely to get wrapped into an omnibus spending package.

Federal employee groups have protested the administration and Congress' approach to pay, expressing concern that higher raises for military members have sent discouraging messages about the value of civilian employees' work. The 2010 National Defense Authorization Act included a 3.4 percent military raise, 0.5 percent higher than the 2.9 percent raise Obama requested for service members in his initial budget. Obama signed the Defense policy bill in October.

Previous administrations also have cited national emergencies to justify alternative pay plans. Max Stier, president of the nonprofit Partnership for Public Service, has criticized the practice, urging the president to take a more straightforward approach and simply say he does not want to increase pay.

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