White-collar U.S. workers would get raises each October, starting next year, to close the salary gap with private and local government employees under a bill passed yesterday by the Senate Governmental Affairs Committee.
Because workers now get pay raises each January, the bill sets the stage for two increases in 1991 for 1.4 million federal workers, including nearly 500,000 in the District, Maryland and Virginia. Workers in high-cost cities would get special local adjustments each October in addition to the regular October national increase.
The House has cleared a 4.1 percent January federal raise. The Bush administration asked for a 3.5 percent raise. The October increase proposed by Sen. John Glenn (D-Ohio) would be determined by a study of changes in non-federal pay.
Glenn's bill has a five-year price tag ranging from $3.8 billion (if the president exercised his option to limit raises) to $7 billion (if full increases as projected went into effect.) Last week, the House Post Office and Civil Service Committee approved a more ambitious $9.5 billion pay plan introduced by Rep. Gary L. Ackerman (D-N.Y.).
The Senate plan would give the president limited power to reduce annual raises by 0.5 percent during economic emergencies.
If the House and Senate pass separate pay bills, they will attempt to reach a compromise in September.
Glenn's bill has a better chance of White House approval because it would give the president a limited escape hatch on pay. Both bills would make October the new raise date and would base raises on the Labor Department's employment cost index. The index reflects changes in pay and benefit costs for non-federal employers. Each bill would authorize local raises. Glenn's would start the process next year. The House would begin it in 1992.
If last January's federal raise had been under the employment index system, workers would have gotten 4.2 percent instead of 3.6 percent. Federal retirees, whose pensions are indexed to inflation, got a 4.7 percent raise.
Both bills represent a radical departure from the current federal pay system, which bases raises on political and budgetary considerations with little thought to the private pay market. Government studies show federal pay lagging an average of nearly 30 percent behind similar jobs in private industry.
The National Federation of Federal Employees will offer members optional dental insurance coverage. It promises no claims forms or deductibles and free exams, cleanings and fillings.
Both NFFE and the American Federation of Government Employees will get out of the health insurance business at the end of the year. Each blames the Bush administration for this exit. But a major factor in the decisions was that both union-backed plans were losing money and subscribers.