White House Recommends 1.5 Percent Raise

The Bush administration has recommended that federal employees get a 1.5 percent raise in January 2005-compared with 3.5 percent for uniformed military personnel-and that Congress set aside an additional $500 million to reward top performers and to pay higher salaries for certain positions. Administration officials, continuing a break from federal pay law that started last year, touted the 1.5 percent increase as keeping federal employees roughly apace with inflation-not with private sector wage growth, which is the indicator called for by federal pay law. On top of that, the White House is seeking $300 million for the “human capital performance fund” that Congress authorized last year but for which it provided just $1 million for the current fiscal year. The performance fund is to be parceled out to agencies by the Office of Personnel Management once it certifies that they have performance measures that meet certain standards. The remaining $200 million would be available for agencies to use at their discretion for granting merit pay raises and bonuses and for targeted recruitment and retention spending. However, there is resistance in Congress-as well as among federal employee organizations-to basing a significant part of a federal employee’s salary on currently used performance measures that are not widely accepted as fair and accurate.