[House Document 104-111]
[From the U.S. Government Publishing Office]






        104th Congress, 1st Session - - - - - - - - - - - - House 
Document 104-111


 
                FEDERAL PAY ADJUSTMENT--ALTERNATIVE PLAN

                               __________

                             COMMUNICATION

                                  from

                   THE PRESIDENT OF THE UNITED STATES

                              transmitting

 AN ALTERNATIVE PLAN FOR A FEDERAL EMPLOYEES' PAY ADJUSTMENT TO BECOME 
  EFFECTIVE ON THE FIRST DAY OF THE FIRST APPLICABLE PAY PERIOD ON OR 
         AFTER JANUARY 1, 1996, PURSUANT TO 5 U.S.C. 5305(c)(1)




 September 6, 1995--Referred to the Committee on Government Reform and 
                  Oversight and ordered to be printed
                                           The White House,
                                       Washington, August 31, 1995.
Hon. Newt Gingrich,
Speaker of the House of Representatives,
Washington, DC.
    Dear Mr. Speaker: The law requires that the President 
transmit to the Congress an alternative plan for Federal pay 
adjustments if he views the pay adjustments that would take 
effect under the law as inappropriate. Therefore, to ensure 
that substantially larger increases do not take effect 
automatically, I am transmitting an alternative plan for the 
1996 pay adjustments.
    Under section 5303(a) of title 5, United States Code, the 
rates of basic pay would rise by 2.4 percent, effective in 
January 1996. In addition, pursuant to section 5304 of title 5, 
General Schedule employees also would receive an increase in 
their locality-based comparability payments that would cost 2.7 
percent of payroll. When combined with the 2.4 percent basic 
pay increase, the locality-based payments would produce a total 
payroll increase of about 5.1 percent that would cost $3.9 
billion in 1996--$2 billion more than the 2.4 percent pay 
increase I proposed in my 1996 Budget and which is included in 
my Balanced Budget Plan.
    Sections 5303(b) and 5304a of title 5, however, provide me 
the authority to implement an alternate pay adjustment plan if 
I view the pay adjustments that would otherwise take effect as 
inappropriate due to ``national emergency or serious economic 
conditions affecting the general welfare.'' As you know, 
Presidents have used such authority many times over the past 15 
years.
    In evaluating ``an economic condition affecting the general 
welfare,'' the statute directs me to consider such economic 
measures as the Index of Leading Economic Indicators, the Gross 
National Product, the unemployment rate, the budget deficit, 
the Consumer Price Index, the Producer Price Index, the 
Employment Cost Index, and the Implicit Price Deflator for 
Personal Consumption Expenditures. I have reviewed these and 
other pertinent measures of our economy.
    The budget discipline that my Administration has put in 
place has contributed to sustained economic growth and low 
inflation. To continue this discipline and its favorable impact 
on economic conditions, I have determined that an alternative 
pay adjustment of 2.4 percent is appropriate for the 1996 pay 
raises under sections 5303 and 5304. This raise matches the 2.4 
percent basic pay increase that I proposed for military members 
in my fiscal 1996 Budget and that the Congress likely will 
include in the 1996 Defense Authorization bill.
    Because many Federal civilian employees do not receive 
locality pay, I will put the bulk of the 2.4 percent adjustment 
into the general increase under section 5303, thus giving all 
employees a meaningful raise. I will apply the remainder to 
increasing the locality-based comparability payments under 
section 5304.
    Accordingly, I have determined that the following alternate 
pay plan is appropriate:
          (1) Under the authority of section 5303(b) of title 
        5, United States Code, the pay rates for each statutory 
        pay system shall be increased by 2 percent, effective 
        on the first day of the first applicable pay period 
        beginning on or after January 1, 1996.
          (2) Under the authority of section 5304a of title 5, 
        United States Code, locality-based comparability 
        payments in the amounts set forth on the attached table 
        shall be effective on the first day of the first 
        applicable pay period beginning on or after January 1, 
        1996. When compared with the payments currently in 
        effect, these comparability payments will increase the 
        General Schedule payroll by about 0.4 percent.
    Finally, the law requires that I include in this report on 
assessment of the impact that my decisions will have on the 
Government's ability to recruit and retain well-qualified 
employees. while I regret that our fiscal situation does not 
permit granting Federal employees a pay increase greater than 
2.4 percent, I do not believe this will have any material 
impact on the quality of our work force. In accordance with the 
Federal Workforce Restructuring Act of 1994, I am committed to 
reducing Government employment substantially; consequently, 
hiring and attrition are very low. In addition, the Government 
has at hand many pay tools, such as recruitment bonuses, 
retention allowances, and special salary rates, to maintain the 
high quality work force that serves our Nation so very well.
            Sincerely,
                                                William J. Clinton.

      LOCALITY-BASED COMPARABILITY PAYMENTS UNDER ALTERNATIVE PLAN      
                              [In percent]                              
------------------------------------------------------------------------
                                              Comparability    Increase 
                                                 payment         over   
                Pay locality                    effective      January  
                                               January 1996   1995 rate 
------------------------------------------------------------------------
Atlanta MSA.................................          5.14          0.48
Boston CMSA.................................          7.68          0.71
Chicago CMSA................................          7.63          0.71
Cincinnati CMSA.............................          5.87          0.54
Cleveland CMSA..............................          4.67          0.44
Columbus, OH, MSA...........................          5.84          0.54
Dallas CMSA.................................          6.23          0.58
Dayton MSA..................................          5.72          0.53
Denver CMSA.................................          6.34          0.59
Detroit CMSA................................          7.26          0.67
Houston CMSA................................          9.40          0.87
Huntsville MSA..............................          4.84          0.45
Indianapolis MSA............................          5.04          0.46
Kansas City MSA.............................          4.38          0.41
Los Angeles CMSA \1\........................          8.15          0.76
Miami CMSA..................................          5.94          0.55
New York CMSA...............................          8.05          0.75
Philadelphia CMSA...........................          6.90          0.64
Portland, OR, CMSA..........................          5.20          0.49
Richmond MSA................................          4.41          0.41
Sacramento CMSA.............................          5.81          0.54
St. Louis MSA...............................          4.72          0.44
San Diego MSA...............................          6.76          0.62
San Francisco CMSA..........................          8.97          0.83
Seattle CMSA................................          6.44          0.60
Washington CMSA \2\.........................          6.04          0.56
Rest of United States \3\...................          4.13          0.39
------------------------------------------------------------------------
\1\ Pay locality also includes Santa Barbara County and Edwards Air     
  Force Base, CA.                                                       
\2\ Pay locality also includes St. Marys County, MD.                    
\3\ Does not include Alaska, Hawaii, or U.S. territories or possessions.
                                                                        
NOTE: MSA means Metropolitan Statistical Area and CMSA means            
  Consolidated Metropolitan Statistical Area, both as defined by the    
  Office of Management and Budget [OMB] in OMB Bulletin Number 95-04,   
  June 30, 1995.                                                        

                                
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