Signs Pointing to Raise Proposal–Maybe 1.9 Percent

There have been indications that President Trump will endorse a federal pay raise for January 2018, potentially 1.9 percent. If so, and there is no guarantee, that would be a positive note in a budget that otherwise is expected to be a difficult one for federal employees and that already has employee organizations bracing for a recommendation to freeze pay. OMB has sent agencies preliminary versions of the budget, and a process of comments and negotiation is under way. There have been several reports that a 1.9 percent raise is assumed in those agency documents. That would be nearly the average 2.1 percent raise that was paid in January of this year under the last Obama administration action. That amount was paid by default because Congress did not act on the raise last year, and was boosted from Obama’s original 1.6 percent recommendation at nearly the last minute, after Congress passed a bill setting the raise for the military at 2.1 percent. The 1.9 percent figure would be consistent with a number produced by the formula of the federal pay-setting law, which calls for an annual across-the-board raise linked to a Labor Department measure of private sector wage growth, the employment cost index. Under the law’s formula, a half-percentage point is supposed to be shaved from the indicated number for that component, with locality pay added on top. While that formula has not worked as designed, in many years the reduced ECI figure has been used for the total raise, with locality pay carved out. The initial ECI figure for 2018, reported last fall, worked out to be 2.4 percent, which yields 1.9 percent when the half-point is taken off. Federal unions and some Democrats in Congress are pushing for a 3.2 percent increase. The current expectation is that a “budget blueprint” with relatively few details will be issued around March 16, with a more thorough budget to come in early May.