Although President Reagan's budget will ask for a 5 percent federal pay cut, the administration would probably settle for an extended pay freeze and slowdown in within-grade (longevity) increases for civil servants.
Many members of Congress oppose the idea of a federal pay freeze because of the political and economic impact at home. Federal and military installations are big employers -- sometimes the biggest -- in many large and small towns. Politicians also worry that a federal pay cut would make it easier for more private employers to cut payrolls.
It appears that some administration officials would actually prefer an extended pay freeze to a more jolting pay cut. Most federal workers got a 3 1/2 percent general raise this year. Nearly one-third of the 1.2 million white-collar civil servants are due for another 3 percent within-grade raise this year. Ninety-nine of every 100 employes who qualify for the raises will get them.
Sen. William V. Roth Jr. (R-Del.) is on record as opposing the pay cut concept. But Roth, who chairs the Governmental Affairs Committee, is working on a plan to trim federal personnel spending during the next several years. Two items being considered are a pay freeze (rather than a cut) and a freeze on the longevity raises.
Each of the first 15 federal pay grades has 10 steps. The salary differential from the first pay step to the 10th is about 30 percent. Employes who remain in their grade get a step increase (worth 3 percent) every 12 months in the first three steps, every two years for the next three steps, and every third year thereafter until they hit the 10th step of their grade. Employes who never get promoted can go to the top of their grade in 18 years.
Although the administration will push hard for a 5 percent pay cut, insiders believe that it would drop the idea in return for an extended freeze on wages and in-grade increases. Such a freeze would save the government as much money, or more, than an immediate pay cut and would be easier for Congress to swallow.