Raise, Performance Fund Issues Also to Be Debated

According to the formula in federal pay law, the administration’s starting point on the raise recommendation for January 2005 would be 2.5 percent, but it could again break with that formula and recommend a raise of around 2 percent on ground that inflation is low. With the early indicator for the 2005 military raise being 3.5 percent, there then would be an effort to bring the federal raise number up to that figure in the name of maintaining pay parity between the two groups. While that has been an annual battle in recent years, permanent language in a Defense Department budget bill enacted last year said that raises for the two groups should be the same “to the maximum extent practicable.” The administration also is expected to again request substantial funding for the “human capital performance fund” to reward high-performing employees. Last year the administration succeeded in getting the program authorized, but Congress has set aside only $1 million for it, just enough to get it operating, rather than the $500 million the White House requested. To get more money, the administration will have to convince Congress that agency performance evaluation systems meet certain standards of fairness and accuracy.