A decision by President Trump virtually guarantees that federal employees will receive a raise in January, but the size of that increase, and whether the amount will vary by locality, remains to be decided.
Trump late last week issued a letter to Congress stating his intent to set by default an across the board raise of 2.6 percent, with no locality-based component, in the event that no raise is passed into law before the end of the calendar year. It sets an “alternative” raise—alternative to a large increase that otherwise would take effect automatically in that situation under a 1990 federal pay law.
The letter is a routine action when Congress has not finalized a federal raise for the upcoming year by the end of August. However, Trump departed from the past practice of himself and his predecessors of repeating the raise proposal they originally made in their early-year budget message to Congress; Trump originally had called for a salary rate freeze for 2020.
The message gave no reason for changing positions on whether to grant a raise, although it did say that the reason for not allowing the raise to take effect was the potential cost: on top of a 2.6 percent across the board increase, locality raises averaging 24 percent, at a cost of $24 billion a year.
The House has passed an appropriations bill providing for an average 3.1 percent raise, to be divided as 2.6 percent across the board and 0.5 percentage points for locality pay, likely yielding raises ranging by locality from several tenths of a percentage point below 3.1 to several tenths above. The Senate has not drafted its version of that bill.
Federal employee organizations and some members of Congress active in workplace issues repeated their call for 3.1 percent, noting that military personnel are in line for a raise of that size. The principle of “pay parity” between the two had been followed regularly for many years although less so in recent years.
Under both Trump’s message and the House measure, the raise would take effect as usual with the first full pay period of the new year, which for most employees will begin January 5.
The “alternative” raise typically becomes a moot point because some decision is made on a raise by the end of the year, typically in the general government appropriations bill or some larger budget measure containing that bill. However, in some prior years it does take effect, as it did at the start of this year because Congress and the White House had hit a budgetary deadlock late last year. The freeze that Trump had advocated took effect for a time, only to be overridden by a later budget measure providing for an average 1.9 percent increase paid retroactively.