Same 2.2% Raise Proposed for Civilians and Military

President Bush proposed a 2.2 percent pay raise for federal civilian employees and members of the armed forces yesterday, marking the first time in his presidency that he has called for equivalent raises for both groups.

In past budgets, Bush has sought larger raises for the military than for civilians, with White House officials saying that service members deserved bigger increases in light of combat in Afghanistan and Iraq, as well as the continuing struggle against terrorism.

Every year, however, Congress has ignored the recommendation and passed the same raise for both groups, citing a two-decade tradition of "pay parity" that recognizes the contributions of both civilian workers and the military. Last year, lawmakers approved an across-the-board raise of 3.1 percent for everyone after Bush had proposed that amount for the military but 2.3 percent for civilian workers.

"I consider it a personal victory that, for the first time in recent history, the president has linked civilian and military pay raises," said Rep. Thomas M. Davis III (R-Va.), chairman of the Government Reform Committee and a top proponent of pay parity. "Both civilian and military employees deserve and need this pay hike."

Federal employee union leaders called the proposed raise inadequate, however.

The "paltry" increase "will do nothing to close the pay gap with the private sector," John Gage, president of the American Federation of Government Employees, said in a written statement. "Worse still, because the proposed raise is lower than inflation estimates, the standard of living for federal employees likely will decrease in 2007."

Asked why the White House took a different approach this year, Alex Conant, a spokesman for the Office of Management and Budget, said pay parity was not the president's goal. Rather, the pay raise proposal reflects "an amount that will most effectively and responsibly allow us to recruit, retain and reward quality employees," he said.

Conant said the proposed 2.2 percent pay increase is in line with estimates of wage growth among private-sector employees.

In a new wrinkle, Bush wants authority to pay "special rates" -- targeted pay increases for hard-to-fill jobs or occupations -- from the same pool of money that traditionally has been used for across-the-board increases and raises that vary by location.

Some analysts believe such a change, which would require congressional approval, could negatively affect raises in base pay for ordinary federal workers.

"This would allow the administration to divert money from across the board or locality adjustments or even eliminate them," said Colleen M. Kelley, president of the National Treasury Employees Union. "If this language is approved, it could be a backdoor way of trying to completely revamp the pay system, and NTEU will oppose it."

The president's budget also generated fears among federal employee groups yesterday that the administration would seek to trim billions of dollars in health insurance benefits over the next few years. The concern springs in part from language in the budget that the Office of Personnel Management will "identify options for increasing price competition among health plans offered to federal employees and retirees through the Federal Employees Health Benefits Program."

OMB officials say no cuts are planned. The White House merely wants to change the law to permit Blue Cross and Blue Shield to offer a third health insurance plan that would include a high deductible coupled with a health savings account. Such a plan probably would offer lower annual premiums, saving money for employees and the government, which picks up part of the cost of premiums, OMB budget analysts said.

Charles L. Fallis, president of the National Active and Retired Federal Employees Association, said in a statement that " 'increased price competition' could be code words for driving federal workers and retirees into the most basic and least comprehensive plans, forcing us to pay more out-of-pocket costs."

Staff writer Stephen Barr contributed to this report.