President Reagan has decided to ask Congress to deny federal civilian and military employes any fiscal 1984 pay raise as he struggles to reduce the huge projected budget deficits, administration officials reported yesterday.
If approved by Congress, it would be the first time since 1964 that federal workers did not receive a yearly pay increase of some amount. The president's decision could affect about 2.1 million uniformed military personnel and about 2 million civilian workers throughout the government.
As work continued on the fiscal 1984 budget to be submitted to Congress Jan. 31, White House officials said the military budget savings agreed to by Defense Secretary Caspar W. Weinberger in a private White House meeting Monday will mean a delay of some major weapons programs in later years. Weinberger did not acknowledge this at his news conference Tuesday.
"It's bound to give us trouble in the out-years," said one White House official dealing in national security matters.
Administration officials said the government workers' pay freeze would be requested by the president as part of his fiscal 1984 budget. Despite the freeze, they said, federal employes would still get longevity or in-grade increases, which typically are about 3 percent.
The president will make an appeal for the pay freeze as a necessary across-the-board sacrifice, administration officials said.
"If it is part of a government-wide policy in which everybody is asked to make some kind of sacrifice, we hope everybody will understand," Weinberger said in a television interview yesterday.
Weinberger only hinted at Reagan's decision on government pay, which the defense secretary strongly opposed. He said a formal announcement would come this week or next. Other administration officials said the president may make a separate appeal to the nation or announce his decision in the State of the Union message to Congress Jan. 25.
Reagan discussed with his Cabinet Council on Economic Affairs yesterday a series of initiatives to cope with high unemployment. The ideas said to be under consideration include a subminimum wage for teen-agers, new job training and relocation proposals, and tax breaks for employers who hire the jobless. The package is also expected to be included in the State of the Union message, officials said.
White House spokesman Larry Speakes said the president would have to wrap up his decisions on this before completing work on the budget.
Reagan, struggling to bring down a deficit now estimated to reach $200 billion in fiscal 1984, could trim about $6 billion a year from the projected deficit if federal workers go without a pay raise, administration officials estimated.
The 1983 congressional budget resolution, approved last summer, called for pay increases of 4 percent a year for three years. Federal workers, both civilian and military, received 4 percent raises last October. In other parts of its final budget deliberations affecting government workers, the administration also is considering a proposal to have them in the future work an additional 10 years to age 65 to get full retirement benefits and contribute a larger portion of their salary to their retirement fund.
The administration also is discussing a Social Security compromise that would bring into the system, starting next year, all new federal workers and all those with fewer than three years of service.
The president's decision to ask federal workers to forgo next year's pay increase marked a setback for Weinberger, who was seeking military pay raises of 7.6 percent for 1984, or, barring that, raises of at least 4 percent.
There are varying estimates as to how much the deficit could be trimmed by eliminating the federal pay raise. The administration has never published a proposed federal pay increase for fiscal 1984.
But officials said the deficit projections assumed a pay increase in the 6 percent range. Given this assumption, the savings would be nearly $6 billion from the projected 1984 deficit, one official said.
However, it is not likely that Reagan would have sought a 6 percent pay boost, given the 4 percent levels included in last year's congressional budget resolution.
Assuming that future pay raises do not make up for the one forgone this year, the deficit savings would be repeated in later years. The administration is under intense pressure to bring under control deficits projected to be, without further action, as high as $295 billion in 1988.
According to the Office of Personnel Management, every 1 percent increase in federal pay costs the government $735 million. The pay decision could affect 1.4 million white-collar federal employes, 449,000 blue-collar employes, and about 100,000 others, officials said. Postal Service workers would not be affected directly, they said.
Sen. Ted Stevens (R-Alaska), chairman of the Senate subcommittee on civil service and general services, was traveling in Alaska yesterday and could not be reached for comment. Rep. William D. Ford (D-Mich.), chairman of the House Post Office and Civil Service Committee, said through a spokesman that Reagan's federal pay decision "is but another example of the president's contempt for federal workers."
"No corporation in America could survive if it treated its workers with the kind of disdain this administration shows for its employes," Ford said. "With RIFs Reductions in Force , threats of RIFs, lowered health care benefits and higher costs and a reduction of retirement benefits, this administration has already driven out some of our best and brightest people," he added. "Now it proposes to deal another crippling blow to sagging morale."
On defense spending, Weinberger announced Tuesday that he would propose to Reagan a reduction of $11.3 billion in budget authority for fiscal 1984 from levels previously proposed. But the defense secretary did not precisely specify how this would be accomplished, except to say it would come from reduced inflation, personnel savings, and military construction training exercises. Weinberger said that weapons systems in the planned five-year, $1.6 trillion Reagan defense buildup would not be affected, but he did not estimate how much of a delay might be involved.
A White House official involved in national security policy said yesterday that Weinberger's decision would mean the military expansion would not proceed as quickly as originally planned by the president. He estimated that the cumulative cuts from Reagan's first defense proposal, including this latest round, would total about $80 billion.
"These cuts will inevitably affect us in the out-years," the official said. "This will mean stretch-out of weapons" programs. The official said that Weinberger understandably underplayed the impact of the cuts for fear of signaling the Soviets that Reagan's rearmament program was being derailed.
Another White House official said that the Republican senators who had urged Reagan to stretch out his defense program would be satisfied by the defense trims that will be made in later years.