This story has been updated.
The president's fiscal 2011 budget proposal, unveiled Monday morning, recommends a 1.4 percent pay raise for civilian and military employees.
Administration officials praised the recommendation for civilian employees, pointing out that it's based on the traditional formula. The Employment Cost Index, one of the indicators for the formula, showed 1.4 percent growth from September 2008 to September 2009, according to White House reports. "Federal employees will get a 1.4 percent increase, which frankly I think to a lot of Americans sounds pretty good," Office of Management and Budget Director Peter Orszag said during a press conference on Monday. "It's lower than it's been in the past, because inflation has been lower than it's been in the past." The 1.4 percent pay raise includes both a base pay increase and a locality pay raise.
The 1.4 percent pay raise would be the lowest for the armed forces since 1973, when the draft was abolished and the military became an all-volunteer force. The president requested a 2.9 percent pay raise for the military in fiscal 2010, but Congress ultimately gave members of the armed forces a 3.4 percent increase last year. Civilian workers received a 2 percent boost in fiscal 2010.
Federal employee groups and lawmakers, including House Majority Leader Steny Hoyer, D-Md., repeatedly have called for pay parity between members of the military and civilian workers for annual salary raises.
Hoyer, whose Maryland district is home to thousands of federal employees, said the proposed raise was consistent with the economy but that he wanted to ensure that federal pay was enough to attract qualified candidates to government.
"I think it's fair in the sense that we're going through very, very tough economic times," he said. "What we're really looking at is, 'Is it competitive?' Can we retain those that we have, and are we competitive in what's clearly a competitive market for skills?"
Federal employee unions praised the administration's effort at pay parity, but expressed concern about the size of the increase. "There's still a huge pay gap between federal and nonfederal salaries," said John Gage, president of the American Federation for Government Employees. "I think the raise should be higher. Do I think it's understandable? Yes. Do I think we have a case to make for a higher pay raise? Yes, but maybe a difficult one."
"At best, 1.4 percent is a modest adjustment. But in this economy, a modest increase is better than no increase at all," said National Federation of Federal Employees President William Dougan, who sits on the Federal Salary Council.
National Treasury Employees Union President Colleen Kelley, also a member of the Federal Salary Council, praised the inclusion of pay parity, but commented that the raise is "very low," and said she would explore opportunities for increasing it legislatively.
Also on Monday, the Office of Personnel Management released the 2009 Pay Agent Report, which outlined the locality pay formulas for 2011. The report shows an average pay disparity of 22 percent between federal pay and nonfederal pay in comparable occupations and areas. As in previous years, the report, however, does not recommend following the locality pay formula outlined in the 1990 Federal Employees Pay Comparability Act.