2017 Pay Raise Silently Advances, But House Bill Would Block Some Bonuses

By on July 10, 2016 in Pay & Benefits with 62 Comments

Image of a businessman pressing a pay button on a touch screen

Late last week, the House of Representatives passed the 2017 Financial Services and General Government Appropriations Act (H.R. 5485). Of immediate interest to many readers is that by not referencing a federal employee pay raise in 2017, a pay raise for next year remains on track. Unless Congress takes action in its legislation, the President’s recommendation for a pay raise of 1.6% for the federal workforce will likely become effective in January.

The President has until August 31st to formally announce his pay raise proposal for federal employees. In 2016, this letter was issued on August 28th. Since Congress had not passed legislation to alter the recommended amount, the President’s letter directed a 1% pay raise with an additional amount for locality pay. That amounted to an average of 1.3% for federal employees.

Impact on the IRS

The bill, if it passed into law as written, would have an additional potential impact on the income for some federal employees. For example, section 112 of the bill reads, in part:

“None of the funds made available in this or any other Act to the Internal Revenue Service may be obligated or expended to make a payment to any employee under a bonus, award, or recognition program”.

That restriction only applies to employees of the Internal Revenue Service (IRS). This same section of the bill would also prevent the IRS from spending money “under any hiring or personnel selection process with respect to re-hiring a former employee, unless such program or process takes into account the conduct and Federal tax compliance of such employee or former employee.”

So, obviously, the Members of the House are sufficiently concerned about the agency failing to take into account hiring former IRS employees who have not paid their federal taxes that it has been written into legislation.

Impact on Bonus Payments and Pay Raise for Many SES Members

Congressman Paul Gosar (R-AZ)  introduced an amendment to block bonuses for senior career appointees and other federal agencies that receive funding through H.R. 5485. Gosar issued a press release last week entitled “House Passes Gosar Amendment Blocking Bonuses for IRS and Other Federal Bureaucrats” regarding his rationale for introducing the amendment to HR 5485. He is quoted as follows:

“It is unconscionable that Lois Lerner and other dishonest senior officials within the IRS have received more than $100,000 in bonuses in recent years. Committing perjury, purposely disposing of hard drives and more than 24,000 emails in order to stymie an investigation, while providing an extremely poor level of service to taxpayers doesn’t warrant a single penny in bonus compensation.

“Giving out bonuses to senior management in the middle of one of the largest and most significant scandals in modern American history is a slap in the face to the American public. Once the IRS can prove that it will hold rogue employees accountable for their ineptitude, I will cease my efforts to prohibit these awards.”

Other agencies covered by the funding in this bill include, in addition to the Department of the Treasury, the General Services Administration, Securities and Exchange Commission, and Executive Office of the President, these independent agencies:

  • the Administrative Conference of the United States,
  • the Consumer Product Safety Commission,
  • the Election Assistance Commission,
  • the Federal Communications Commission,
  • the Federal Deposit Insurance Corporation,
  • the Federal Election Commission,
  • the Federal Labor Relations Authority,
  • the Federal Trade Commission,
  • the General Services Administration,
  • the Merit Systems Protection Board,
  • the National Archives and Records Administration,
  • the National Credit Union Administration,
  • the Office of Government Ethics,
  • the Office Personnel Management,
  • the Office of Special Counsel,
  • the Postal Regulatory Commission,
  • the Privacy and Civil Liberties Oversight Board,
  • the Securities and Exchange Commission,
  • the Selective Service System,
  • the Small Business Administration,
  • the U.S. Postal Service, and
  • the U.S. Tax Court.

Section 738 of the House bill also blocks a pay raise in 2017 for most members of the Senior Executive Service.

White House Objections

The White House would likely veto the funding bill in its current form. The objections of the White House do not concern the pay raise, but the impact and restrictions that the bill would place on implementing objectives of the Obama administration including “a prohibition on paying salaries and expenses for certain White House staff positions and impinge on the President’s ability to organize EOP (Executive Office of the President) operations.” The administration also wants more money for various agencies.

The bill will now go to the Senate for consideration.

There are likely to be changes to this legislation in the Senate before it goes to the President for signature to become the funding plan for agencies impacted by this legislation for fiscal year 2017.

© 2016 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written consent from Ralph R. Smith.

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About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources.

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