Congress Looks Ready To Approve 3.5% Raise

By Stephen Barr
Monday, September 3, 2007

Here's a little something for federal employees to celebrate while flipping the burgers and dogs on the grill this Labor Day: a pay raise drawing bipartisan support on Capitol Hill.

The House has approved a 3.5 percent raise for the civil service in January as part of the fiscal 2008 financial services-general government appropriations bill, and a Senate committee has included the proposed raise in its version of the bill.

The House also has passed two bills that would provide a 3.5 percent raise for military personnel. The Senate appears to support that raise, too, but has not taken an official stance.

It goes without saying that federal pay is a key factor in the health of the Washington-Baltimore economy. The region is home to about 10 percent of the federal workforce, and the annual federal employee payroll here (not counting the military and Postal Service) is about $20 billion.

In the Washington area, where the federal workforce heavily tilts toward white-collar professionals and headquarters staff, the average salary for a federal employee is about $88,500, according to the Office of Personnel Management. That is several thousand dollars higher than the average for federal employees nationwide.

While allowances, tax advantages and bonuses make it difficult to calculate average compensation for military personnel, the Congressional Budget Office recently estimated that the average enlisted soldier in the Army earned about $44,900 in pay, bonuses, housing and food allowances last year.

The analysis by the CBO found that the basic pay of enlisted personnel falls in the middle of the earnings distribution for civilian workers of similar age and education levels.

That's an improvement from recent decades and is due, in part, to a congressional effort to keep boosting military pay. Since 2000, Congress has tried to keep annual military raises from lagging too far behind private-sector raises, as measured by the Labor Department's Employment Cost Index.

That effort, in turn, has helped the civil service, because Congress in most years has backed a "pay parity" policy of giving equal average increases to both groups.

Just as importantly, the proposed raises for government personnel appears in line with private-sector pay plans for next year.

A recently released survey of more than 1,000 employers conducted by Mercer Human Resource Consulting showed the companies plan to provide average pay raises of 3.8 percent in 2008, about the same as this year's average private-sector raise.

But Mercer also found that corporations are increasingly linking base pay to job performance. The highest-rated employees will receive an average 5.9 percent pay increase in 2008, and the next highest rated group will see their pay rise by an average 4.6 percent, Mercer estimated.

The details of the 2008 federal pay raise will not be known until year-end. After Congress sets the raise, the Bush administration examines the cost of labor in 32 areas, including big cities, and adjusts the raise according to local market conditions. Some areas will receive slightly more than 3.5 percent and some a little less.

The White House has criticized the proposed civil service and military raises, on grounds that spending more than what the president recommended -- 3 percent -- means that agencies may have less money for other priorities. But the Bush administration has not gone so far as to threaten a veto over the congressional pay plan.

Washington area members of Congress, meanwhile, are hoping to avoid a repeat of last year, when Congress failed to complete work on the spending bills. That allowed the White House to put its recommendation into effect, providing the civil service and the military with an average 2.2 percent raise for 2007.

That was the lowest civil service raise in almost 20 years, according to congressional Democrats and federal union leaders.


Steve Nelson, director of the office of policy and evaluation at the Merit Systems Protection Board, retires today after more than 35 years of federal service. Nelson, who joined the merit board in 2002, has overseen studies of federal human resource management policies and surveys on federal employee attitudes.

He also has served as the chief personnel officer for the Forest Service and for the National Guard. He is a past president of the federal section of the International Personnel Management Association.

Deborah Koenig, a hearing representative for the Labor Department's office of workers' compensation programs, retired Friday after 29 years of federal service.

Linda K. Smith, deputy director of the Environmental Protection Agency's office of environmental justice, retired Friday after 42 years of federal service.

Smith joined the government as a secretary in the Pacific Northwest Water Laboratory, which was later combined with parts of other agencies to create the EPA. In 1974, Smith moved to Washington, where she earned bachelor's and master's degrees.

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