More at Stake for Workers Than the 2007 Pay Raise

Within the next two weeks, the White House and Congress will start setting priorities, and federal employees will have a stake in how some play out.

One of the top agenda items will be the Bush administration's recommendation for the 2007 pay raise. President Bush will make his pay recommendation in his fiscal 2007 budget, scheduled for release Feb. 6, and Congress will take it up during the spring and summer. Federal pay raises have averaged more than 3 percent annually in recent years.

Administration officials plan to renew a push for changes in the government-wide pay system. The plan would abolish the General Schedule by 2010 and move federal employees into more rigorous systems that would link pay raises to job performance. The proposal, however, has not found a congressional sponsor.

Other pay systems also may get scrutiny this year. House members, for example, are interested in reviewing federal judicial salaries and the pay of administrative law judges. Pay and retirement benefits of federal law enforcement officers also are up for renewed discussion.

Legislation that would add a real estate investment fund to the Thrift Savings Plan is under study in the House. The bill's backers have met with TSP officials on the proposal. Congressional aides also are looking into whether TSP rules could be changed so that bonuses could be counted as retirement contributions.

Except for the pay raise, Congress seems likely to move slowly on all civil service issues this year, aides to senators and House members said.

The deployment of troops in Iraq, the recovery and relief efforts in Gulf Coast states devastated by Hurricane Katrina, the president's fiscal 2007 budget recommendations and efforts to tighten lobbying laws will draw the most attention in Congress, including from the House and Senate committees that oversee the civil service.

The investigations into the government's tardy response to Katrina may lead to recommendations to revamp management practices across government, according to House aides. The rush to revamp lobbying laws to address corruption issues raised in the case of a former GOP lobbyist could spill over into the executive branch, affecting senior executives and managers.

Federal retirees may face another year of frustration on three legislative issues.

A bill that would allow retirees to pay for health insurance premiums on a pretax basis, known as "premium conversion," appears stalled in the House Ways and Means Committee.

Bills that would repeal or modify parts of Social Security law, called the government pension offset and the windfall elimination provision, also seem to be on the back burner this year. Many retirees contend that the offset and provision unfairly reduce, and sometimes wipe out, government annuities for their surviving spouses or for themselves. One House bill has broad support (292 co-sponsors), however, and retiree groups plan to keep pushing for passage.

Other legislative issues that could affect government employees include efforts to overhaul operations at the U.S. Postal Service, to increase telecommuting in the federal workforce and to encourage wider use of electronic medical records and health savings accounts, which offer tax advantages, in the federal employee health insurance program.

Congress probably will also revisit efforts by the Bush administration to contract out federal work, which has been stoutly opposed by federal unions. In the House, a debate is underway on whether to authorize a special task force to study a proposal that would consolidate employee complaints and disciplinary cases, handled by at least five agencies, into a "federal employee appeals court."

Lobbyists for employee groups, including unions, say they will be watching on the Hill and at the White House for any proposals that would reduce federal benefits. A group of conservative House members, the Republican Study Committee, called last year for savings in federal retirement benefits and for reducing health benefits for retirees with relatively short federal careers.

The ideas won scant support but could return in coming months as Congress and the Bush administration look for ways to reduce federal spending.

Diary associate Eric Yoder contributed to this report.