Federal workers, for the second year in a row, have been asked by the president to take a scaled-down 5.5 percent pay raise that is below the inflation rate and only half the amount estimated to give them pay equality with industry.
The president's budget for the 1980 fiscal year projects a 5.5 percent October pay raise for nearly 4 million white collar civil servants and military personnel. For the typical federal worker in metropolitan Washington (there are 350,000 of them) the raise would amount to a before-taxes increase of $21.65 a week. The 70,000 military people stationed here would get the same percentage raise if Congress as expected goes along with the president's pay proposals.
Even with the modest 5.5 percent pay proposal, the budget estimates that the cost of the federal civilian and military payroll (excluding the giant U.S. Postal Service) will rise to $78.8 billion during the 1980 fiscal year.
In his budget Carter acknowledged it would probably take a 10.25 percent raise to bring federal pay up to equivalent industry rates. But he said government must continue to set an "example" for the private sector.
The president's shopping list for the fiscal year that begins next October recommends significant job cuts in government, increased dependency on outside contractors, "reform" of both the federal pay fixing machinery and the military retirement system, and eliminating loopholes in the federal disability retirement program.
If Congress approves the budget, federal white collar employment would drop about 2 percent, or 35,700 jobs from its estimated level of last October. But because of personnel cuts resulting from a partial hiring freeze on agencies, the actual job cuts between now and September 1980 would be less than 28,000.
The budget contains few real surprises. But the "anticipation" that the president will keep the 5.5 percent pay lid on federal workers another year will anger many federal workers. Carter said they must continue to live "under the same guidelines" labor and management in industry are being asked to follow. In fact, however, the voluntary guidelines for the private sector permit much bigger raises than the mandatory pay lid on federal workers.
Other highlights from the budget:
Defense, the largest department, would take the biggest job cuts. Air Force would drop 6,900 civilian jobs and Navy would lose 5,500. Army would hire 2,100 new people and the Office of the Secretary of Defense (which only recently reorganized and cut back employment) would fill 1,300 new jobs.
Department of Energy would drop 400 jobs; Interior would lose 600, VA would drop 300 jobs. GSA's cuts, like many of those in Defense, would be offset by replacement of guards and cleaning crews with outside contractor personnel.
HEW would increase by 900 jobs, primarily in the National Health Service Corps and Indian Health Service; Justice would add 500 new people, mostly U.S. attorneys and marshals; Environmental Protection Agency would get 200 new jobs in air quality, hazardous waste disposal and toxic substance monitoring.
President Carter said legislation will be proposed to tighten up retirements under the Federal Employes Compensation Act. He said there is evidence it is "overused" and said the rules now provide "incentives to file questionable claims." He said the cost of the tax-free disability compensation for 48,000 workers will jump to $304 million by the end of the upcoming fiscal year.
Without spelling out details, the president said he would ask Congress to approve various pay "reforms" he will propose. Chief among them is expected to be a plan to eliminate some pay steps for blue collar (wage board) employes, and to put half a million clerical, technical and administrative employes under an area wage system, linked to the going rate in indsutry.
Military members with short service, and those joining up in the future would be put under a new retirement system that the preisdent said would save money but "protect" financial interests of service personnel. It would include features to offset military and social security benefits, and deferral of full pension rights in some cases until age 60.
Carter left the door open -- but not very wide -- to the possibility of an October federal-military pay raise in excess of 5.5 percent. He said he would not set the final amount until August after assessing economic conditions. The language he used is almost identical to that in last year's budget when he also "anticipated" a 5.5 percent raise, which is exactly what federal workers got.
The president's strained relations with federal employe unions -- representing about half the total work force of 2.6 million -- could be snapped by the pay proposals and his plans for additional ay "reforms." Federal unions, and their postal allies, will ask Congress to grant workers a full catch-up-with-industry raise when it comes due.
But Congress is expected, as it did last year, to go along with the scaled-down pay increase.