Press Item ● Federal Employees

Federal employees are on track for a 4.1 percent pay raise next year, contrary to the Bush administration's original plan.

The decision by the House Appropriations Committee to override President Bush's proposal for a 2 percent raise is not a first. For several years, Congress -- not the White House -- has determined how much federal workers are paid.

Still, the committee's decision shows that the Bush administration is getting less traction than it wants on pay issues and will have to work harder to sell its ideas.

As the committee moved toward its decision on the 2004 raise, the president's pay advisers described a 2 percent raise as "responsible and sensible." Employee turnover rates are "extremely low" and doubling the raise, the advisers said, would "fail to add value to the government's recruitment and retention efforts." A bigger raise, they warned, "would also drain resources from agency budgets."

In their letter to the House committee, the pay advisers -- Labor Secretary Elaine L. Chao, White House budget director Joshua B. Bolten and Office of Personnel Management Director Kay Coles James -- urged that job performance be made a bigger factor in pay raises.

But the administration's proposal stalled.

As part of its pay package, Bush officials asked Congress to create a $500 million "human capital performance fund," which they said would be administered by OPM based on performance-management plans submitted by agencies. To key members of the Appropriations Committee, the fund came off as unstructured and untested. Under pressure to spend more on Amtrak and aviation, members chopped the proposed fund to $15 million and then slashed it again, to $2.5 million.

Moreover, Democrats were worried that the administration had proposed the performance fund in lieu of a higher raise.

After Bush proposed an average 4.1 percent raise for the military, Rep. James P. Moran Jr. (D-Va.) countered with an amendment in the House Budget Committee calling for parity in raises between the civil service and the armed forces. That cleared the way for House Appropriations Chairman C.W. Bill Young (R-Fla.) to support pay parity, as he has in past years.

On Thursday, Rep. Steny H. Hoyer (D-Md.), joined by Reps. Frank R. Wolf (R-Va.) and Moran, won Appropriations Committee approval of an amendment that would mandate a 4.1 percent raise for federal employees next year. In addition, the amendment specifies that employees in the departments of Defense and Homeland Security would get the raise. That could complicate plans announced by both departments to convert to pay-for-performance systems that would permit managers to vary raises provided employees.

Asked to comment, James signaled that she plans to keep calling for change in federal pay practices. "If this were 50 years ago, I would understand the commitment to across-the-board increases," she said. "But the human capital performance fund is a 21st-century approach that tells employees, 'Performance matters.' Continuing to spend money using old models is not effective human capital management."

But lawmakers note that the General Accounting Office has warned that many agencies do not have systems for linking pay to job performance. And area House members stress the idea that civil service and military personnel are dedicated public servants and equally deserving of fair increases in pay.

"In many situations, such as at the Pentagon, they work side by side, performing the same functions," Moran said.

Hoyer said the committee's action recognized the service of federal employees who "work every day to make this country a better and safer place for all Americans."

Federal union leaders, wary of giving managers too much discretion over pay decisions, applauded the Hoyer amendment. Bobby L. Harnage Sr. of the American Federation of Government Employees and Colleen M. Kelley of the National Treasury Employees Union said a higher raise would help with recruitment and retention.

Given the House appropriators' stand, it seems likely that any wide-ranging debate on overhauling federal pay practices will have to wait for another year.

Stephen Barr's e-mail address is

© 2003 The Washington Post Company

Contact Info: 
Stephen Barr

The Washington Post
For Immediate Release: 
July 27, 2003