Upcoming summit talks on the size of the nation's biggest pay adjustment - multibillion-dollar October raises for federal and military personnel - could result in a slight relaxation of the 5.5 percent lid President Carter has proposed.
They might also nail-down a White House pledge to help "unleash" 2.6 million federal and postal workers from a law that now prevents them from getting actively involved in partisan politics.
If, however, that jawboning between the AFL-CIO and the White House fails, it could trigger all-out economic warfare between the administration, the U.S. Treasury and the Federation's 14 million members.
AFL-CIO leaders, perhaps as early as next week, plan to sit down with the president, vice president and congressional leaders. Object: to increase the 1979 pay raises for nearly 5 million federal and military personnel caught up with double-digit inflation while facing their second straight year of 5.5 percent pay raises.
AFL-CIO leaders tell this column they plan to advise the White House, in a "diplomatic but forceful way" that the alternative to better treatment for federal workers will be a nationwide labor boycott of the U.S. savings bond program.
Millions of Americans annually buy billions of dollars worth of bonds through payroll deduction. This guaranteed income program for the government means wage-earners are making relatively long-term loans to Uncle Sam at relatively low interest rates.
The biggest federal union, the 300,000 member American Federation of Government Employees, has already told its people to cash in their bonds, and cancel payroll savings. The AFL-CIO affiliate is furious over the proposed 5.5 percent raise in the light of much fatter industry wage settlements that the White House has either justified, ignored or been powerless to stop.
In metropolitan Washington, nearly 500,000 people work for the federal or District government, or are in the military. President Carter has admitted that government workers are due a more substantial catch-up-with-industry raise this year. But in his budget he would hold it to 5.5 percent. He did the same thing last year.
Government data shows that federal workers should get 10 per cent, at least, to make up for industry wage gains in similar jobs.
Only postal workers have been exempt from White House and congressional pay lids on federal employes. Postal workers bargain separately with the mail-moving corporation. Their current 3-year contract provides pay and cost-of-living adjustments in excess of 21 percent, and lifetime job guarantees for workers.
Federal and military pay adjustments are big business, making up the biggest single wage adjustment each year in the U.S. Each 1 percent increase in pay costs more than $500 million.
AFGE President Kenneth T. Blaylock, a member of the AFL-CIO executive board, asked it last week to authorize a labor-wide boycott of savings bonds. The board, with President George Meany in the hospital, opted instead for negotiations. It plans to send a delegation, Meany, Vice President Lane Kirkland and Blaylock, to discuss the matter with Carter and Congress before deciding on a boycott by labor.
"We're going to talk about federal pay," an AFL-CIO spokesman said. "And a lot of other things too." He said this would include congressional attempts to limit future cost-of-living raises for retirees, better fringe benefits and the Hatch Act.
The Hatch Act is a 1939 law that prevents federal and postal workers from taking active roles in partisan elections. The AFL-CIO wants workers freed from it so they can manage campaigns, raise funds or run as candidates.
Despite a preelection pledge to push for Hatch Act changes, union leaders feel the Carter administration did nothing to get the Senate to act on a House-passed bill to liberalize the "no politics" law.
Administration officials say the president "might have some leeway" under his wage-price guidelines to give federal workers "a little more" than 5.5 percent in October. But they doubt it would be as much as a full percent.
AFL-CIO brass say if they can get something more in the paycheck, and an iron-clad White House promise on the Hatch Act, they might be willing to reconsider the boycott.