Carter administration officials formally notified federal union leaders yesterday that the White House intends to hold this October's pay raise for federal workers below 5.5 percent, which would be significantly less than what the 3.5 million white collar and military personnel had been expecting.
According to top administration economic planners, President Carter wants to hold the federal pay raise down to begin a nationwide anti-inflation campaign.
When Carter returns next month from his trip to South America and Africa, these sources said, he will ask private industry and labor to follow the federal government's example and voluntarily hold wage and price increases this year below the average for 1976 and 1977.
Federal and military salaries constitute the larges payroll in the country and the only one the Carter administration can control directly. Congress can overrule the president's final decision on the federal pay raise, but administration sources they doubt Congress would do so. This is an election year and members of Congress would get the same pay raises as other federal workers.
Salaries of federal employes - including more than 300,000 white collar civil servants and 80,000 military personnel working in an around Washington - went up 4.8 percent in 1976, and 7 percent last October.
A 6 percent pay raise would increase the average federal worker's salary by $23 a week. A 5 percent increase would give only $19 more each week.
By law, federal and military pay must be adjusted each October following a government survey of wage levels for comparable jobs in private industry. That information has not yet been made public, but Carter's federal budget had left room for a federal pay raise this October of between 6 and 6.5 percent.
Now, officials said, because of administration fears of "double-digit" inflation this year, the White House is moving quickly to keep the pay raise much lower.
Barry Bosworth of the Council on Wage and Price Stability, recommended that the president make an early gesture to private industry by announcing his intention to hold the federal pay raise to between 5 and 5.5 percent.
The process of determing the pay raise, which usually doesn't end until August or September, was speeded up. At yesterday's meeting of the Advisory Committee on Federal Pay, representatives of the White House, the Civil Service Commission and the Labor Department told federal union leaders of the likelihood that the raise would be held down.
Union leaders reacted angrily. Kenneth T. Blaylock, president of the 300,000-member American Federation of Government Employes, said federal workers would carry "their share of the burden" in any campaign to hold down wages and prices "but we won't carry all of it."
The union leaders argued that similar wage-price restraints in the past, which included mandatory ceilings on federal pay, had not slowed the rate of inflation.
The union members of the Advisory Committee on Federal Pay offered statistics showing that the cost of living had gone up 45 percent to 48 percent in the past five years while federal pay had increased by only 30 percent.
They said the federal pay increase during those years was lower than the 39 percent increase in the private sector, with federal civil servants and military personnel bearing the brunt of voluntary wage-price controls and suffering significant losses in purchaseing power.
The president of the government's largest independent (non-AFL-CIO) union, James M. Pierce, of the National Federation of Federal Employes, said the idea of forcing federal workers to forgo larger pay increases while only requesting private industry to do the same is unfair and never works. "Why is it that this group," he asked, "which represents 3 percent of the work force is always asked to make the sacrifices?"
Bosworth agreed that federal workers would be taking a "risk" by seeing their pay limited. But he said it was a "small risk" that could increase purchasing power for them and all other workers if it helped slow inflation.
Vincent Connery, of the National Treasury Employes Union, said the pay-limiting proposal shows the administration is "terribly naive" because "jawboning" the process of trying to persuade industry and labor to voluntarily hold down prices and wages) "hasn't worked in the past."
Blaylock, who also is a member of the AFL-CIO's executive council, said government unions would "never accept" mandatory wage restraints unless the private sector also were put under wage and price controls.