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Federal Compensation

Plan Avoids Rollbacks That Some Feared

By Christopher Lee
Washington Post Staff Writer
Tuesday, February 8, 2005; Page A07

President Bush's spending plan for fiscal 2006 does not propose rollbacks in federal retirement and health care benefits feared by some employee groups, and both retirees and current workers can expect their annual compensation to at least keep pace with inflation.

Federal civil servants would receive a 2.3 percent average annual pay raise under the budget released yesterday, while retiree pensions, by federal law, would increase along with inflation, which is expected to be roughly the same amount.

_____Live Discussion_____
Transcript: Brookings Economist William Gale discusses the 2006 budget.
Transcript: Post's Jonathan Weisman

_____More Coverage_____
President Sends '06 Budget to Congress (The Washington Post, Feb 8, 2005)
Bush Calls for Familiar Trims (The Washington Post, Feb 8, 2005)
Congress Unlikely to Embrace Bush Wish List (The Washington Post, Feb 8, 2005)
Troops' Pay Raise, Retooling Efforts Come With Price (The Washington Post, Feb 8, 2005)
For Budget Director, No Red Ink and the Skies Are Not Cloudy All Day (The Washington Post, Feb 8, 2005)

Current workers can expect an even larger pay increase if Congress holds to recent tradition and bumps up the civilian raise to meet the 3.1 percent increase that Bush has proposed for members of the military. Washington area members of Congress have vowed to approve equivalent raises again this year, citing a two-decade tradition of "pay parity" that recognizes the contributions of both civilian workers and the military.

"I think the administration ignores the fact that 299 House members voted for pay parity last year," Rep. Thomas M. Davis III (R-Va.) said in a recent interview.

But one federal employee union leader cautioned that rising federal deficits and pressure to hold the line on spending will make the pay raise fight harder this year.

"[F]ederal employees should not be under any illusions about the difficulty of achieving pay parity," Colleen M. Kelley, president of the National Treasury Employees Union, said in a statement.

Under Bush's budget, the federal civilian payroll would swell to $129.5 billion, up 2.9 percent from the current estimated payroll of $125.9 billion. The new figure is nearly 9 percent more than the $118.5 billion payroll for 2004.

The growing payroll reflects annual pay raises and a steady increase in the number of civilian federal workers during Bush's tenure. Civilian employment is expected to climb to 1.88 million in fiscal 2006, a 6.9 percent increase from 1.76 million in fiscal 2002.

Much of the growth has been in national security-related agencies, with the departments of Defense, Justice and Homeland Security accounting for more than 101,000 new full-time federal jobs since 2002. A report by two nonprofit groups last week forecast 37,515 new hires in security-related positions in the next two years.

Spending on federal employee benefits is also up, growing to $45.8 billion, a 7.4 percent increase since 2004. Retiree health benefits have risen 14.7 percent over the same period, to $8.4 billion.

Dan Adcock, assistant legislative director for the National Association of Retired Federal Employees, said the Bush plan includes some perennial proposals for Congress to modify accounting rules for the Civil Service Retirement System and retiree health benefits in a way that could hurt retirees. But it contains no major new encroachments on federal pay and entitlements, he said.

"We were really concerned because of the deficit, and because this is a non-election year, that there would have been things like COLA [cost-of-living-adjustment] cuts and reductions in the government's share toward the Federal Employee Health Benefits Program," Adcock said. "We avoided that, and we're happy about that."

The administration wants Congress to extend changes in personnel rules at Defense and Homeland Security to other agencies, granting them new freedom to change the way they pay, promote and discipline their workers.

A group of nine House Democrats, including House Minority Whip Steny H. Hoyer (D-Md.) and Rep. Henry A. Waxman (D-Calif.), sent Bush a letter yesterday saying the idea "is misguided and premature and should be reconsidered."

The administration also wants Congress to grant Bush the authority to propose "results commissions." A panel appointed by both major parties would study ways to improve federal programs -- adult literacy efforts, for example -- that span several agencies and are difficult to restructure. Panel recommendations would require approval by both the president and Congress.

Bush also asked Congress to approve a "sunset commission," which would consider whether to retain, restructure or eliminate specific federal programs according to a schedule of regular reviews. Programs would end unless Congress voted to reauthorize them.

"This budget is probably . . . more focused on results than any [the president] has presented so far," said Clay Johnson III, deputy director for management at the Office of Management and Budget. " . . . The focus is on spending the taxpayers' money wisely."

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