Last year, the Bush administration lost its fight to reduce the pay raises proposed for federal employees. The 4.6 percent average raise that federal employees got in January cost $900 million more than the administration's proposed 3.6 percent pay raise would have cost.
This year, the Bush administration has proposed a 2.6 percent average pay raise. The 4.1 percent average raise that members of Congress are fighting for would cost $1.4 billion more than the administration's proposed raise. The fight is just beginning.
Before lawmakers left Washington for their spring recess last week, the House approved a budget resolution calling for a 4.1 percent average federal raise next January, and the Senate Budget Committee followed suit.
The budget resolutions are usually the first legislative branch actions to address a pay raise. They are nonbinding, "sense-of-Congress" provisions. While they don't carry the force of law, the sense-of-Congress provisions set the stage for action later in the year.
In the House, Rep. Jim Moran, D-Va., sponsored the sense-of-Congress provision, which, at 4.1 percent, would give civilian federal workers the same basic raise as military personnel. The Bush administration's budget plan included a 4.1 percent military pay raise. In the Senate, Sen. Paul Sarbanes, D-Md., sponsored the higher pay raise provision.
The next legislative fronts will be the Treasury -Postal subcommittees of the House and the Senate appropriations committees. There, legislators will attempt to secure provisions in the Treasury-Postal appropriations bill that would force the Bush administration to give federal workers the higher pay raise.
The Bush administration could veto the bill, or it could work behind the scenes to get the higher raise thrown out. Last year, the administration did neither, though officials publicly held to the position that a lower raise would be better. Office of Personnel Management Director Kay Coles James stuck to the proposed 2.6 percent raise for next January in testimony before the Senate Governmental Affairs Committee last week. "We know that many think the president's proposed pay raise is not nearly enough, and we understand their position," James said. "However, that proposed increase constitutes a reasonable and prudent use of severely constrained resources."
American Federation of Government Employees President Bobby Harnage said in a statement that better pay would help federal agencies recruit and retain workers. "Whether guarding our borders from terrorists or safeguarding our food from profit-driven corporations, federal employees play a critical role in the quality of millions of Americans' lives," Harnage said. "They deserve better from their boss."
Retirement and Health Costs
While the Senate and House have so far agreed on the federal pay raise, the two chambers are at odds over a provision that would change the way the government pays federal employees' retirement costs and federal retirees' health insurance. Currently, Congress automatically pays for pensions for employees in the Civil Service Retirement System and pays for health benefits for all retired federal workers. The Bush administration wants to charge agencies for the full cost of all federal pensions and retiree health benefits. That change, called accrual budgeting, would shift the costs from what are now mandatory accounts-kept largely outside the annual spending debate-into discretionary accounts, which can more easily be tinkered with during the appropriations process.
The Republican-controlled House approved the change. In its budget resolution report, the House Budget Committee explained: "The committee believes that there is much to commend in this approach. If properly designed, accrual budgeting has the potential to improve budgetary decision-making by recognizing the full cost of manpower decisions and to attribute such costs to the appropriate agency, programs or activity."
The Democratic-controlled Senate, meanwhile, rejected the change in its budget resolution report. Opponents of accrual budgeting worry that shifting the retirement and health insurance money--$9.2 billion in 2003--to discretionary accounts would squeeze agency budgets. National Treasury Employees Union President Colleen Kelley said at the Senate Governmental Affairs Committee last week: "If Congress failed to appropriate sufficient funding, or, if spending caps approved by Congress in future years precluded this funding, agencies would be faced with two choices. They would either no longer have the money to ensure payment of retiree health and retirement benefits, or they would be forced to further restrict employee training programs, reduce public services or conduct a reduction in force of federal employees."
More Legislation
Several other pay and benefits related bills have seen action on Capitol Hill over the past month.
- Rep. Carolyn Maloney, D-N.Y., introduced legislation (H.R. 3915) that would give federal employees paid time off for the birth or adoption of a child.
- Sen. Barbara Mikulski, D-Md., introduced a bill (S. 1892) that would increase the government's share of federal employees's health insurance premiums.
- The House passed H.R. 3924, a bill that would prevent federal agencies from denying contracts to companies that allow employees working on contracts to telecommute.
- Rep. Mark Foley, R-Fla., introduced legislation (H.R. 3845) that would limit annual pay increases for members of Congress to the annual cost-of-living adjustments under Social Security. Limiting congressional pay raises would also limit increases for federal executives, whose pay is tied to the congressional pay scale.
- A group of 31 lawmakers introduced H.R. 3794, which would raise the pay rates for federal law enforcement officers in 18 metropolitan areas.