Federal pay raise still up in the air

On the heels of recent Republican proposals to freeze federal pay and hiring came detailed plans to slash government spending released on Nov. 10 by the chairmen of President Obama's bipartisan fiscal commission. Their plan would cut the federal workforce by 10 percent, freeze civilian pay and compensation for three years, and cap noncombat pay for military personnel at 2011 levels for three years.

"The federal workforce has some challenges in terms of the pay freeze," said Paul Rowson, managing director at the human resources association WorldatWork. "It is contemplating freezing pay when the private sector is considering increasing it. Our salary budget survey is telling us that the private sector this year is targeting anywhere from a 2.6 [percent] to 3 percent merit increase across-the-board. That's what they're budgeting for their entire workforce, double what the president had on the table."

Obama in his fiscal 2011 budget proposed a 1.4 percent raise for both civilian employees and military personnel. The Senate Appropriations Committee in July approved legislation that included a 1.4 percent civilian raise, but House appropriators have been silent on the issue.

On the military side, Senate Appropriations in September approved legislation granting a 1.4 percent pay raise for service members, matching the figure included in the Senate Armed Services Committee's Defense authorization bill. The House Appropriations Committee has not released the figure to be included in its Defense legislation, but the House in late May passed its Defense authorization bill with a 1.9 percent pay raise for service members. (An authorization bill represents what Congress intends to spend, but appropriators actually allocate the funds.) Obama has said he opposes the higher proposed increase.

Observers note a lot of uncertainty about how Congress will proceed on the pay issue.

"If Congress doesn't act, [federal employees] don't [automatically] get a pay raise," said Jessica Klement, government affairs director at the Federal Managers Association. "It's anyone's guess as to what they do during the lame duck."

Bill Bransford, general counsel for the Senior Executives Association, said there's a good argument to be made that federal pay could increase, but he also agreed the likely outcome is currently unknown.

"The proposed increase is substantially less than what it has been in the past," Bransford said. "Everyone recognizes the political climate. One of the problems is it has been fueled by" a recent spate of news articles critical of federal pay, "which are an unfair assessment of federal employees," he said.

According to Max Stier, president of the nonprofit Partnership for Public Service, the problem is a lack of facts and a focus on whether federal workers are overpaid rather than the service they provide. Many bad choices have been proposed, but business as usual is unrealistic, he said.

"This is not something that is going away anytime soon," Stier said. "In any one scenario, even if we make the hardest and wisest choices, we're going to be facing challenges for a long time to come, and the pressures will exist on the federal budget and the federal workforce. I think we ought to be preparing for the long haul here."

But for federal employees to see no boost would be unprecedented, said Howard Risher, an independent compensation and performance management consultant. "To say we're going to freeze salaries where they are -- when no one has considered the consequences for agency staffing or performance, a blanket freeze could be costly."