The 2010 authorization bill for the Department of Defense contains the authorization for a 3.4 percent pay raise for military personnel next year.
For those who pay attention to these matters, you will note that the 3.4 percent is considerably higher than President Obama proposed for civilians. His proposed budget called for a 2 percent raise for federal employees. (See President Asks Federal Employees to Sacrifice in 2010: Proposes 2% Pay Raise)
If the past is indeed prologue to the future, federal employees won’t be asked to sacrifice after all with next year’s paycheck. Federal employees advocates in Congress and federal employee unions are already looking closely at the issue and asking that federal civilian employees under the general schedule get an average 3.4 percent pay raise next year as well by arguing that "pay parity" should be given to federal civilian employees.
That would follow an average pay raise of 3.9% in 2009 and 3.5% in 2008. With an unemployment rate of about 10% in the United States, the combination of job security with a pay raise in 2010 makes a federal job look pretty good.
What will make any raise look pretty good by comparison, federal retirees are looking at a cost of living increase next year of zero percent. The May inflation rate rose 0.4 percent in the latest month but, if the current trend continues, Social Security recipients and federal retirees will not get any cost of living increase in 2010. At the moment, the inflation figures used to calculate the COLA for next year show a -3.1 toward a COLA increase in 2010.
Many readers routinely refer to the annual raise of federal employees as a cost of living increase or a COLA. In reality, it is a raise and determined by the political process. Retirees get a cost of living increase (or not) based on the rate of inflation. Although it is rare, there are years when federal retirees get a bigger boost than current employees. For 2010, it now appears very likely that active federal employees will get a bigger bump in their paycheck than the retirees will receive.