Justification for 3 Percent Raise

President Bush in issuing an order setting the January 2008 general schedule raise at an average of 3 percent cited—as he had in the past—potential cost and relatively low federal turnover as reasons for not granting a higher raise. “I do not believe this decision will materially affect our ability to continue to attract and retain a quality federal workforce,” he stated in a letter to Congress. “To the contrary, since any pay raise above the amount proposed in this alternative plan would likely be unfunded, agencies would have to absorb the additional cost and could have to freeze hiring to pay the higher rates. Moreover, the GS ‘quit’ rate continues to be very low (2.1 percent on an annual basis), well below the overall average ‘quit’ rate in private enterprise. Should the need arise, the government has many compensation flexibilities, such as special salary rates and recruitment and retention incentives, to maintain the high quality workforce that serves our nation.” The 3 percent increase would be divided as 2.5 percent across-the-board and an average of 0.5 percent for locality pay, under the order.