If he follows the general practice of his predecessors President Biden will issue a message to Congress by the end of this month reiterating his intention for a 2.7 percent federal employee raise in January—a letter that commonly is misinterpreted as finalizing the raise amount.
In years such as this one when Congress has not made a decision on a federal raise for the following January by the end of August, the President may issue a letter to Congress stating his intent to set by default an “alternative” raise—alternative to a large increase that otherwise would take effect automatically—should no raise figure be enacted into law by year’s end.
In almost all cases, that letter has repeated the raise proposal they originally made in their early-year budget message to Congress, in this case for 2.7 percent (then-President Trump departed from that pattern in 2019 when he set an alternative raise of the 2.6 percent that had been under consideration in Congress for 2020 rather than the freeze he recommended originally; a later-enacted law increased the figure to 3.1 percent).
The “alternative” raise sometimes becomes a moot point because an affirmative decision is made on a raise afterward. Any figure enacted into law before the end of the year—typically happening in the general government appropriations bill or some larger budget measure containing that bill—will override that figure.
In other years, though, Congress in effect consents to the President’s figure by enacting no such language and allowing that figure to take effect by default. That might be the case for 2021, since a catchall spending bill already approved by the House follows that strategy.
The Senate has not yet drafted a counterpart, though, and federal employee organizations and some Democrats in Congress continue to advocate for a 3.2 percent increase to be included in the budget for 2022. It’s looking likely that a final decision on appropriations once again won’t be made until late in the year.
One issue still to be resolved regarding the 2021 raise involves dividing the amount between across the board and locality components. When raises of more than about 1 percent are paid, the amount normally is divided in that way, with most of the available funds going to the across the board part. Money for the rest is allocated by locality according to comparisons with private sector pay in those areas, resulting raises varying by several tenths of a percentage point.