While we still don’t know how much the pay raise for federal employees will be in 2004, it is already time to begin the process on deciding the 2005 pay raise for the federal civilian and military workforce.
President Bush has proposed a budget increase of 7 percent for the Department of Defense. Included in this budget is a proposed 3.5 percent increase in pay for members of the military service. In his weekly radio address, President Bush observed that military pay has increased 21 percent since he took office.
“Our troops put their lives on the line to defend America,” Bush pointed out, “and we owe them our best in return.” (Click on the link on the left hand side of this page for a link to the President’s entire address.)
The President said his proposed budget “nearly triples homeland security spending over 2001 levels, including an increase of nearly 10 percent next year, to $30.5 billion.” This money, he explained, would be used to improve security at borders, airports and seaports, and to better prepare the U.S. against biological attack.
Does this mean that federal civilian employees will be in line for a 3.5 percent increase in 2005? Not necessarily.
The federal pay situation is more complicated. The Department of Defense and the Department of Homeland Security will be under different personnel systems as a result of legislative changes. It is likely that part of this change will be to move toward a pay for performance system. If that occurs, it is possible that employees under these new systems will get a lower pay raise but have the possibility of much higher increases than 3.5 percent for those that have the highest performance ratings.
Members of the Senior Executive Service (SES) are already under a pay for performance system that reflects the administration’s philosophy on this issue.
An additional factor is the federal budget deficit. Political pressure is building on the administration to cut federal spending which has been rising rapidly since President Bush took office. He is already giving speeches supporting moves to cut spending. And, since this is an election year, the pressure will be more intense than usual and it is likely the deficit will be a major political issue.
One way to at least reduce the rate of increased spending is to reduce pay raises for the federal workforce. Throw into the political mix that some federal employee unions routinely and loudly back Democrats for public office and just as loudly, attack the administration’s policies pertaining to the federal workforce. With this background, political strategists may see cutting or eliminating the pay raise as a “can’t lose” proposition. If federal employees are seen as supporting the opposition (i.e. Democrats) and as an impediment to implementing administration policy rather than as a professional, neutral workforce, strategists may ask themselves, “why should we reward our political opposition by giving them a pay raise?” Note that in the President’s radio address, he praised the work of the military in announcing the proposed pay raise. He pointedly did not do this for the civilian workforce.
The outcome is far from certain at this stage. Congress frequently passes legislation for a larger pay raise than that proposed by the President. Many Congressional representatives have bases and federal employees in their districts and they often prefer to give the same pay raise to both military and civilian employees.
A resolution is to be introduced in Congress this week supporting the principle of “pay parity” for civilian and military personnel. The impact of this is also uncertain but it will improve the chances of Congress inserting itself in the process and giving employees a higher raise in the budget process.
In short, the lengthy, complex process of deciding what raise, if any, will be given to federal employees next year has begun. Perhaps the decision will be made before January 1, 2005–but don’t bet on it.