How Senate vote affects prospects for pay raise

March 14, 2012

Does the Senate vote mean that federal employees will receive a raise in 2013?

Not necessarily, but it is a step in that direction. Under current law, the earliest federal pay rates could be raised is January 2013. Last month the House approved a one-year extension of the freeze as part of a separate bill. The Senate hasn’t taken up that bill, nor any of the several similar bills pending before it.

What happened Tuesday is that the Senate rejected an amendment to a transportation bill that would have used savings from extending the pay freeze by a year to offset the cost of certain energy policies and tax breaks.

The policy questions of extending the pay freeze aside, some members of Congress have started objecting to the practice of using savings from changes in federal employment policies to fund unrelated spending. Federal employee organizations raise the same concerns.

Won’t the House just add a pay freeze extension to its version of the bill?

Possibly, but a transportation bill is not a typical place to address federal pay. Generally, raises for the following January are determined annually during the congressional budget process, with a decision often not finalized until late in the year. This year’s budget cycle has barely gotten started.

The House last month started work on its own version of the transportation bill but got bogged down before recessing for this week. It was considering several other federal employment-related provisions as spending offsets in its bill, including raising retirement contributions by current employees, ending a retirement supplement for many federal employees who retire before age 62 effective with those retiring starting next year, and making the annuity benefits for those hired after this year less generous.

Those provisions may be set aside, at least temporarily, if the House decides to use the Senate version as its new starting point. Leaders may decide against trying to add a pay freeze continuation to the bill in light of the Senate vote.

What’s the administration’s position on federal pay for 2013?

The White House has recommended a 0.5 percent increase for next January. That was part of a budget plan offered in February in which the administration called a continued freeze “unsustainable.”

However, the administration did agree in late 2010 to impose the two-year freeze for 2011 and 2012.

Why don’t members of Congress share the pain of pay freezes?

They do. Raises for Congress are supposed to be automatic, set by a separate formula, but the law caps any annual raise for legislators at the base pay raise for General Schedule federal workers. So, when federal workers get no raise, Congress gets no raise. In addition, Congress in some years rejects a raise for itself even though an increase is paid to federal workers. Since 1994, Congress has gone without a raise nine times, including four of the last six years.

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