Federal budget restores civilian-military pay parity, but the raise is small

OMB chief Peter Orszag, at the president's side on budget day, says the federal mini-raise might sound "pretty good" to many Americans.
OMB chief Peter Orszag, at the president's side on budget day, says the federal mini-raise might sound "pretty good" to many Americans. (Joshua Roberts/bloomberg News)
By Joe Davidson
Tuesday, February 2, 2010

There was a lot of moaning and groaning and hurt feelings among federal employee organizations last year when President Obama broke with tradition by not proposing equal pay raises for civilian and military personnel.

The good news for those groups is that the White House is now advocating pay parity. The bad news is that the proposed raises in fiscal 2011 are significantly lower than either bunch is getting this year: just a 1.4 percent boost for both groups.

It's a tiny increase, particularly compared with this year's 3.4 percent increase for the military and 2 percent raise for civilians. But when one in 10 workers can't find a job, it doesn't look so bad.

The 1.4 percent, "frankly, I think to a lot of Americans, sounds pretty good," Peter Orszag, director of the Office of Management and Budget, told reporters Monday.

Orszag added that the raise "reflects a formula that is used to compute wage and salary increases, and is lower than it's been in the past because inflation is lower than it's been in the past." Federal raises are not tied directly to inflation but are linked to private-sector wage growth.

Union leaders are happy that the administration honored the principle of pay parity and are understanding about why the raise is low. But they are not complacent.

"We're going to be working hard to try to bump that up," said John Gage, president of the American Federation of Government Employees. "We still have this huge pay gap between federal and nonfederal salaries."

Colleen M. Kelley, president of the National Treasury Employees Union, said she plans to "work with our military colleagues and members of Congress . . . to explore possibilities of increasing the amount as the White House proposal moves through the legislative process."

A key member of Congress when it comes to such issues is House Majority Leader Steny H. Hoyer (D), who represents lots of government workers in his suburban Maryland district. He's been a strong advocate for federal workers, but at this point he can't say whether he'll push for a larger raise.

"I'm going to look at what the competitive situation is in the country," he said in an interview. "Clearly what we've got to do is remain competitive so . . . we can retain and recruit people of the quality necessary to maintain critically important services."

Recruitment will continue to be important, because "the federal government will hire several hundred thousand new civilian employees during the next four years," according to the budget. Yet the budget detail forecasts a drop in jobs in the near term -- to 2.1 million next year from 2.2 million this year. Certain departments, however -- including Defense, Homeland Security, Justice, Veterans Affairs and State -- are slated to have more workers.

The overall decline in employment next year reflects a big drop at the Commerce Department, where the number of jobs is projected to fall from 141,500 to 43,600 because workers hired for the 2010 Census will no longer be needed.

Orszag said the government's acquisition workforce will increase because "over the past eight or nine years those contracts have doubled in size. The acquisition workforce has stayed constant. It's not too hard to figure out that oversight of those contracts has not kept pace with what it should be." The budget provides for a 5 percent increase in that workforce in most civilian agencies.

It also mentions "improving methods for employee performance" and says "transforming the federal workforce is critical," but it doesn't give detailed plans for either. Gage, however, said the Office of Personnel Management expects to have the draft of a new performance-management system ready by April. Civil service reform, another administration goal, also didn't get much play.

The budget document indicates that reforming the federal hiring process is a priority, but it is short on information there, too. That could change very soon, as the OPM and the OMB work out the final details of a reform package.

Stay tuned.

Staff writers Ed O'Keefe and Eric Yoder contributed to this column.

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