The Real Pay Formula
The recipe actually used to derive the civilian pay raise puts employees in line for a 2.2 percent hike in 2007.
There are dueling formulas to determine the annual civilian pay raise: one on the books and one that is actually used.
And what's more, the one that's actually used is about to become stingier.
In 1990, Congress passed the Federal Employees Pay Comparability Act, which established a pay raise formula designed to close the gap between the government and the private sector.
The complex FEPCA formula would have granted civilian employees an average pay raise much higher than the 3.1 percent employees actually received this year.
But FEPCA never has been enacted as intended. Instead, each year the president uses a loophole which allows him to override the formula and propose a much lower pay raise. Congress then reacts by pushing for pay parity between the civilian and military workforce.
And the military pay raise -- which despite President Bush's best efforts has become the de facto civilian raise -- has a formula of its own.
Military increases are calculated from the yearly growth in the Labor Department's Employment Cost Index, with an additional 0.5 percent tacked on.
Every year for the past five years, except for 2004, the formula "ECI + 0.5 percent" is what military, and hence civilian, pay raises have amounted to.
Congress always has the power to override this calculation, which it did in 2003 as troops invaded Iraq. The formula called for a 3.7 percent raise; Congress continued the 4.1 percent from the year before.
The ECI used to calculate the 2006 raise was 2.6 percent which, when added to 0.5 percent, equals the 3.1 percent raise military service members and federal employees received. For 2005, it was 3 percent, leading to the 3.5 percent raise. For 2003, it was 3.6 percent, resulting in a 4.1 percent increase. For 2002, it was 4.1 percent, prompting a 4.6 percent pay raise.
The formula is about to change, however. The fiscal 2004 National Defense Authorization Act called for pay raises from 2007 onward to be equal to the ECI, without the extra 0.5 percent.
With this new formula, the 2007 military pay raise is on course to be 2.2 percent. If Congress operates the way it has in recent years, the civilian raise would follow suit.
Of course, Congress can always eschew the formulas and provide the troops and civil servants a more generous increase.