The House could vote this week on an appropriations bill specifying a 3.5 percent January 2008 federal pay raise, which would be an important step toward setting next year’s raise. The number still would be subject to possible change as the budget process moves along, however, and the Bush administration is likely to oppose the boost from its recommendation of 3 percent on cost grounds and by arguing that any higher pay should be targeted to where the government is having trouble recruiting and retaining employees. If past practice is followed, a determination won’t be made until late this year regarding how much of the total is to be paid across the board and how much divided up as locality pay for general schedule employees. Also, recent practice has been that wage grade employees, who are under a different locality system, have their raises capped at the local GS amount. The bill also would: grant federal employees the right to appeal contracting-out decisions to GAO; bar companies that do not provide health and retirement benefits comparable to the federal government from getting an advantage in competitions on that basis; restrict funding for an IRS program of using private debt collectors to collect unpaid taxes; and ensure that agencies will be able to make independent decisions, not dictated by OMB, on whether to conduct competitions