KENNEBUNKPORT, MAINE, AUG. 24 -- President Bush today recommended a 3.5 percent pay increase for federal civilian employees, effective Jan. 1, a proposal that drew immediate criticism from unions and comes amid congressional efforts to overhaul the federal pay system.

The recommendation matches what Bush proposed in his fiscal 1991 budget earlier this year, but it was short of the 22 percent to 39.6 percent increase his pay advisers found would be necessary to close the gap between the private and public sectors.

"Pay raises of this magnitude are clearly unacceptable," Bush said in a letter to Congress. "They would be detrimental to our efforts to set government spending at levels that promote noninflationary growth."

Unless Congress acts within 30 days of Aug. 31, the 3.5 percent raise takes effect automatically. It covers 2.4 million civilian employees of the federal government, with the exception of those in the Senior Executive Service (SES). Under legislation enacted last year, SES employees will receive salary increases of 18 percent to 25 percent, effective in January.

Under Bush's proposal, annual pay for federal employees would vary from $10,951 for a GS-1, step one employee to $71,882 for a GS-16, step one employee. SES salaries would range from $87,000 to $108,000 a year.

Under the Federal Pay Comparability Act of 1970, the president must determine each year how much federal salaries should be increased to keep pace with private sector salaries. The law calls for the recommendation of the president's chief pay advisers -- the heads of the Office of Personnel Management and the Office of Management and Budget as well as the treasury secretary -- to take effect unless the president submits an alternative plan based on "national emergencies or economic conditions affecting the general welfare."

"To ask federal workers, because they are convenient and accessible, to once again shoulder the brunt of this nation's deficit problem is unconscionable," said John Sturdivant, president of the American Federation of Government Employees.

Sturdivant said the president's authority to propose an alternative to the pay advisers' recommendations, which presidents have done since 1978, is "devastating" to federal employees.

Presidential authority to replace the advisers' recommendation is one of the sticking points between the congressional and administration pay bills under discussion. House legislation would eliminate the president's discretion on pay; a Senate bill would curb his authority. The administration has let congressional committees know that presidential authority in this area is non-negotiable, but indicated it may agree to tighten the circumstances under which an alternative can be proposed, according to Hill staff members.

There are two other main elements of the pay overhaul bills: restructuring the system to pay workers in part on where they live, and an administration proposal to wipe out the automatic "step" increases employees get each year and move instead to a pay-for-performance or merit pay system. Labor unions and the key subcommittees oppose the merit pay idea.

The House Appropriations Committee has approved a 4.1 percent pay increase for federal workers, but no pay increase has been proposed in the Senate.

Bush's announcement follows the distribution this week and last of furlough notices to employees from departments and agencies planning for automatic cuts called for under the Gramm-Rudman-Hollings deficit-reduction law if Congress fails to meet mandated budget targets.

Bush noted that if White House and congressional negotiators fail to reach an agreement on a plan to reduce the federal budget deficit, massive across-the-board spending cuts "adversely affect almost every federal program." Excessive federal pay hikes, he added, "would only exacerbate these effects."

Balz reported from Kennebunkport, Priest from Washington.