Deadline looms for setting 2001 federal pay raise

President Clinton has until Thursday to issue a federal pay raise for 2001, or else a much higher raise than he sought earlier this year will automatically take effect.

The strange circumstances surrounding next year's raise for employees under the General Schedule are rooted in the 1990 Federal Employees Pay Comparability Act (FEPCA).

Under the act, a formula was created to close the gap between federal and private sector salaries over 10 years beginning in 1994. The pay gap at that time was calculated at an average of 28 percent.

But a loophole in the law allows the President to issue smaller raises each year under certain conditions. The Clinton administration has always used that loophole because it believes the FEPCA methodology is flawed and because it does not want to increase federal spending with the higher FEPCA-formulated raises.

This year, Clinton proposed a 3.7 percent average pay raise (including both an across-the-board raise and locality pay increases), and language authorizing the increase was included in the fiscal 2001 Treasury-Postal spending bill. But that bill has yet to be signed into law. Clinton vetoed the measure in late October. Congress won't take up the bill again until it returns for a lame-duck session Dec. 5.

FEPCA, however sets Nov. 30 as the deadline for President Clinton to issue an alternative pay raise to that stipulated under FEPCA. If Clinton does not issue an alternative raise by Thursday, then the FEPCA-formulated pay raise for 2001 prevails. The FEPCA raise is estimated to be 16.6 percent.

Officials at the Office of Management and Budget did not return phone calls Tuesday seeking to determine if the President would issue an alternative pay plan. But he was widely expected to do so.

The American Federation of Government Employees has sponsored legislation in the past that would severely restrict the President's ability to issue alternative raises. "Generally, whoever the President is, we would urge them to do everything they can to close the pay gap," said AFGE Legislative Director Beth Moten.