Spending Deal Keeps Feds, Troops on Track for 1.3 Percent Raise

Federal civilian employees and military service members would receive a 1.3 percent pay raise next year under the fiscal 2016 spending package congressional appropriators unveiled late on Tuesday.

The $1.1 trillion omnibus bill, which funds federal agencies through Sept. 30, 2016, allows for the 1 percent base pay raise for civilian employees that President Obama requested, as well as the 0.3 percent bump to their locality pay. The spending package also allows for troops in the military to receive a 1.3 percent pay increase. The legislative package funds all 12 areas of the federal government that under regular order require their own annual appropriation. The provisions include providing money for defense, financial services and general government activities, the traditional vehicles for federal civilian and military workforce pay.

Congress on Wednesday was expected to vote for a stopgap continuing resolution to tide over agencies at their fiscal 2015 spending levels until lawmakers approve the omnibus bill, which they are expected to do later this week. Agencies have been operating under a CR since October.

Lawmakers ultimately chose to support President Obama’s recommended 1.3 percent total pay raise for federal workers and troops next year -- or at least not stand in its way -- instead of including a specific provision to block it or provide for a different amount. Members of the House initially supported a 2.3 percent raise for uniformed military, but ultimately acquiesced to the lower number.

In an August letter to Congress specifically addressing his military pay raise proposal, Obama said the financial conditions of the country prevented him from giving the troops a larger pay raise.

“As our country continues to recover from serious economic conditions affecting the general welfare, however, we must maintain efforts to keep our nation on a sustainable fiscal course,” Obama wrote. “This effort requires tough choices, especially in light of budget constraints.”

If the president had not informed Congress of his alternative pay plan for feds by the end of August, then the increase mandated by the 1990 Federal Employees Pay Comparability Act would have kicked in. Under FEPCA, the raise would be determined by the change in the Employment Cost Index minus 0.5 percent.

Presidents largely have ignored the FEPCA formula in their federal pay raise proposals, preferring to offer their own figure. Congress created FEPCA, which provides an annual across-the-board salary boost and a locality pay adjustment for General Schedule employees, to close the public and private sector pay gap. The Federal Salary Council has said that federal employees are underpaid relative to private sector workers by 34.9 percent.

Not every federal employee will receive the 1.3 pay raise next year; the vice president and most political appointees will once again see their pay frozen.

The exact amount of the increase for all career civilian employees will depend on their locality. Most areas' increases will hover around the 0.3 percent average, but some -- mostly large cities like San Francisco, Calif., and Washington, D.C. -- will receive larger pay bumps.

Obama must still issue one final order this month to make the base pay raise official. 

Tony Reardon, president of the National Treasury Employees Union, applauded the raise and the larger bill for likely bringing a close to the most recent chapter of shutdown politics.

“We are pleased that this raise, with the first locality adjustment in six years, was not blocked by Congress,” Reardon said. “Final passage of these measures will allow federal employees and federal agencies to get back to the business of serving the public.”

As part of the agreement on agency funding, Congress also unveiled a series of tax breaks known as “extenders.” In a boon for federal employees, and all Americans who receive a mass transit subsidy for their employers, the Protecting Americans from Tax Hikes Act included a permanent boost in the benefit for those who ride public transportation to work.

The measure would bring parity between the parking and transit benefit, which will top off at $255 per month in 2016. Public transportation-riding federal employees have seen their perk dip to a monthly maximum of $130 for the last two years. While a retroactive fix last year and in this agreement would increase the maximum subsidy for 2014 and 2015, applicability rules issued by the Internal Revenue Service would prevent virtually any federal employee from taking advantage of that provision.

Prospectively, however, federal workers riding mass transit to work would never again have to face a lower subsidy than their driving coworkers.

The Association for Commuter Transportation called the mass transit boost a “major victory.”

“ACT and commuters across the nation celebrate the inclusion of parity,” said Rob Henry, the group’s president. “This provision will eliminate the financial incentive to drive alone and will increase transit and vanpool usage.”

Other provisions of the omnibus relevant to the federal workforce include a prohibition on training not “directly related to official duties,” a ban on any agency paying an employee who prevents or threatens another employee from speaking with Congress and a block on agencies providing the home addresses of any employee to labor unions without the employee’s consent.  

Also notable was a provision tucked away in the bill to give victims of the hacks of databases maintained by the Office of Personnel Management -- which impacted virtually every current federal employee, many former federal workers, and security clearance applicants and their family members -- 10 years of protection and up to $5 million in identity theft insurance. Without the provision, OPM had planned to give victims three years of protections and just $1 million of insurance.