Congress yesterday approved a bill to restructure federal employee pay by linking it to local labor markets. A White House spokesman said President Bush favors the plan and is expected to sign it into law.
"Federal workers deserve this kind of fair treatment," said White House spokesman Stephen T. Hart.
The Federal Employees Pay Comparability Act was approved with little debate or opposition amid a fractious budget season when compromises have not been easy to achieve. It is part of the Treasury, Postal Service and General Government Appropriations bill.
The pay bill was the product of a year's discussion and late-night negotiations in recent weeks that produced a compromise between the Office of Management and Budget, the Office of Personnel Management and congressional committees.
The plan would boost white-collar civil service salaries across the board by as much as 5 percent each year from 1992 to 1994. Beginning in 1994, federal workers in high-cost cities, such as Washington, also would receive extra wages in an effort to close the gap between the public and private sectors.
Under the current system, workers at the same level of the pay scale receive the same salary, regardless of where they live.
The bill gives Congress authority to allot $3.5 billion over the next three years to pay for the changes. The administration has agreed to another $1.8 billion for the largest single closing of the private-public gap, which will occur in 1994.
But after that, funding for many of the changes called for in the act is uncertain. Yesterday, OPM officials involved in the negotiations said they were not sure how much the new system will cost.
"The $1.8 billion is not a technical calculation" based on how much OPM believes it will cost to close the gap, associate director Claudia Cooley said at a news conference. "It was some sort of circuit-breaker" in negotiations. "We don't know what those numbers are going to be."
Part of the problem is that the formula to be used to divide the country into pay regions and to determine how federal workers in a given region compare to non-federal employees is still in the making.
Under the new system, in 1992 and 1993 civilian federal workers covered by the General Schedule pay scale would receive an annual raise equal to the government's Economic Cost Index, up to 5 percent. The ECI measures the change in white-collar, private sector wages, excluding sales. In 1994, employees would be guaranteed an annual raise based on the ECI minus 0.5 percent, up to 5 percent.
Last week appropriations conferees approved a 4.1 percent annual pay raise for civilian federal workers effective Jan. 1. President Bush recommended a 3.5 percent increase.