In an unexpected move, President Obama has issued a “revised” alternative 2017 pay raise plan for federal employees. Instead of an average increase of 1.6%, under the revised plan, the pay raise will be 2.1%.
Under the revised plan, there will still be an across the board pay increase of 1%. However, instead of adding in locality pay to give an average pay raise of 1.6%, there will be additional varying locality payments totaling 2.1% of payroll. Under the revised alternative plan, the varying locality pay increases will generate costs of 1.1%.
The revised plan was issued, according to the President’s letter, because Congress approved a pay increase of 2.1% for military personnel in 2017 and due to improving economic considerations, he decided to go with the higher pay raise. Another consideration was the pay freeze for federal employees that lasted for three years and ended in 2014.
Congress could still issue a different pay raise for 2017. At this late date, that alternative seems unlikely.
A copy of the president’s letter is below.
