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The annual watch for the presidential order finalizing the pay raise for the upcoming year has begun, now that Congress has deferred further action on agency budgets into February.

Under federal pay law, if Congress does not set a raise figure in a budget bill that becomes law by the end of a year, the President can order the figure he recommended to take effect by default.


That order typically is issued in the late days of December but with Congress having set aside all appropriations bills—including the general government measure that would be the vehicle for specifying a raise—President Biden could issue the order at any time.

Biden initial budget proposal for fiscal 2022 recommended a 2.7 percent federal employee raise for January; he later stated an intent to set that figure by default if Congress did not act. In that second message, he added that he would designate 2.2 percent to be paid across the board with funds for the other 0.5 percentage points allocated as locality pay.

Congress in effect has consented. A general government appropriations bill passed by the House silent regarding the raise as was the draft of a counterpart produced by Democratic leaders of the Senate that has advanced no farther. By enacting a temporary continuation of spending largely at fiscal 2021 levels instead of specific appropriations, though, Congress has in effect required agencies to absorb the additional cost out of their existing spending rates.

A raise split as Biden indicated would result in increases ranging among the localities from several tenths of a percentage point below 2.7 to several tenths above. Presumably, the figures will be based on last year’s data on pay gaps with the private sector by locality. The Federal Salary Council, which sets the figures based on BLS data, currently is dormant as the White House has not appointed members.

A raise for GS employees takes effect as of the first full pay period of the year, which will be January 2 for most employees. Effective dates of raises for blue collar employees vary; although they are under a separate locality-based system, their raises have been set at the local GS amounts for many years.

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