[House Document 108-121]
[From the U.S. Government Publishing Office]
108th Congress, 1st Session - - - - - - - - - - - - House Document 108-121
AN ALTERNATIVE PLAN FOR ACROSS-THE-BOARD AND LOCALITY PAY INCREASES
__________
COMMUNICATION
from
THE PRESIDENT OF THE UNITED STATES
transmitting
AN ALTERNATIVE PLAN FOR ACROSS-THE-BOARD AND LOCALITY PAY INCREASES
PAYABLE TO CIVILIAN FEDERAL EMPLOYEES COVERED BY THE GENERAL SCHEDULE
(GS) AND CERTAIN OTHER PAY SYSTEMS IN JANUARY 2004, PURSUANT TO 5
U.S.C. 5305(a)(3)
September 3, 2003.--Referred to the Committee on Government Reform and
ordered to be printed
The White House,
Washington, August 27, 2003.
Hon. J. Dennis Hastert,
Speaker of the House of Representatives,
Washington, DC.
Dear Mr. Speaker: I am transmitting an alternative plan for
across-the-board and locality pay increases payable to civilian
Federal employees covered by the General Schedule (GS) and
certain other pay systems in January 2004.
Under title 5, United States Code, civilian Federal
employees covered by the GS and certain other pay systems would
receive a two-part pay increase in January 2004: (1) a 2.7
percent across-the-board increase in scheduled rates of basic
pay derived from Employment Cost Index data on changes in the
wages and salaries of private industry workers, and (2) a
locality pay increase based on Bureau of Labor Statistics'
salary surveys of non-Federal employers in each locality pay
area, which would cost about 10 percent of payroll for the
calendar year. Including increases for blue-collar and other
workers, the total Federal employee pay increase would cost
about 13 percent of payroll in calendar year 2004. For Federal
employees covered by the locality pay system, the overall
average pay increase would be about 15.1 percent.
For each part of the two-part pay increase, title 5, United
States Code, authorizes me to implement an alternative pay plan
if I view the adjustment that would otherwise take effect as
inappropriate due to ``national emergency or serious economic
conditions affecting the general welfare.'' For the reasons
described below, I have determined that it would be appropriate
to exercise my statutory alternative plan authority to limit
the January 2004 GS pay increase.
A national emergency has existed since September 11, 2001,
that now includes Operation Enduring Freedom in Afghanistan and
Operation Iraqi Freedom. Full statutory civilian pay increases
costing 13 percent of payroll in 2004 would interfere with our
Nation's ability to pursue the war on terrorism. Such increases
would cost about $13 billion in fiscal year 2004 alone--$11
billion more than the 2 percent overall Federal civilian pay
increase I proposed in my 2004 Budget--and would build in later
years.
Such cost increases would threaten our efforts against
terrorism or force deep cuts in discretionary spending or
Federal employment to stay within budget. Neither outcome is
acceptable. Therefore, I have determined that a total pay
increase of 2 percent would be appropriate for GS and certain
other employees in January 2004.
A 2 percent pay increase should be complemented by $500
million dollars from the Human Capital Performance Fund, which
I proposed is my FY 2004 Budget and which is now contained in
H.R. 1588, the National Defense Authorization Act for Fiscal
Year 2004. Favorable congressional action to establish full
funding for this initiative would be a key step towards
rewarding the highest performing and most valuable employees in
agencies with rigorous and disciplined performance management
systems. Providing higher pay for employees whose exceptional
performance is critical to the achievement of the agency
mission is preferable to spreading limited dollars across-the-
board to all employees regardless of their individual
performance or contribution.
I will allocate 1.5 percent of the 2 percent total increase
to an across-the-board increase under section 5303 of title 5,
United States Code, and use the remaining 0.5 percent of
payroll to continue the implementation of the locality pay
program under section 5304. Our national situation precludes
granting larger pay increases to GS employees at this time.
Accordingly, I have determined that (1) Under the authority
of section 5303(b) of title 5, United States Code, the pay
rates for each statutory pay system will be increased by 1.5
percent, effective on the first day of the first applicable pay
period beginning on or after January 1, 2004; and (2) Under the
authority of section 5304a of title 5, United States Code,
locality-based comparability payments in the percentages set
forth in the attached table will go into effect in January
2004.
Finally, the law requires that I include in this report an
assessment of the impact of my decision on the Government's
ability to recruit and retain well-qualified employees. I do
not believe this decision will materially affect our ability to
continue to attract and retain a quality Federal workforce. To
the contrary, since any pay raise above the 2 percent I have
proposed would likely be unfunded, agencies would have to
absorb to pay the higher rates. Moreover, GS quit rates are at
an all-time low of 1.7 percent per year, well below the overall
average quit rate in private enterprise. Should the need arise,
the Government has many compensation tools, such as recruitment
bonuses, retention allowances, and special salary rates, to
maintain the high-quality workforce that serves our National so
very well.
Sincerely,
George W. Bush.
2004 Locality-Based Comparability Payments Under Alternative Plan
Locality Pay Area\1\ Locality Payment
[in percent]
Atlanta, GA................................................... 11.50
Boston-Worcester-Lawrence, MA-NH-ME-CT-RI..................... 15.73
Chicago-Gary-Kenosha, IL-IN-WI................................ 16.92
Cincinnati-Hamilton, OH-KY-IN................................. 14.04
Cleveland-Akron, OH........................................... 12.10
Columbus, OH.................................................. 12.28
Dallas-Fort Worth, TX......................................... 12.74
Dayton-Springfield, OH........................................ 11.17
Denver-Boulder-Greeley, CO.................................... 15.46
Detroit-Ann Arbor-Flint, MI................................... 17.02
Hartford, CT.................................................. 16.41
Houston-Galveston-Brazoria, TX................................ 21.49
Huntsville, AL................................................ 10.58
Indianapolis, IN.............................................. 10.30
Kansas City, MO-KS............................................ 10.73
Los Angeles-Riverside-Orange County, CA....................... 18.57
Miami-Fort Lauderdale, FL..................................... 14.45
Milwaukee-Racine, WI.......................................... 11.73
Minneapolis-St. Paul, MN-WI................................... 13.54
New York-N. New Jersey-Long Island, NY-NJ-CT-PA............... 17.73
Orlando, FL................................................... 10.12
Philadelphia-Wilmington-Atlantic City, PA-NJ-DE-MD............ 14.12
Pittsburgh, PA................................................ 11.03
Portland-Salem, OR-WA......................................... 13.60
Richmond-Petersburg, VA....................................... 11.25
Sacramento-Yolo, CA........................................... 13.98
St. Louis, MO-IL.............................................. 10.46
San Diego, CA................................................. 14.84
San Francisco-Oakland-San Jose, CA............................ 22.23
Seattle-Tacoma-Bremerton, WA.................................. 13.85
Washington-Baltimore, DC-MD-VA-WV............................. 13.43
Rest of U.S................................................... 10.09
\1\ Locality pay areas are defined in 5 CFR 531.603.
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