[House Document 105-122]
[From the U.S. Government Publishing Office]



105th Congress, 1st Session  - - - - - - - - - - House Document 105-122


 
     ALTERNATIVE PLAN FOR FEDERAL CIVILIAN EMPLOYEE PAY ADJUSTMENTS

                               __________

                             COMMUNICATION

                                  from

                   THE PRESIDENT OF THE UNITED STATES

                              transmitting

 AN ALTERNATIVE PLAN FOR FEDERAL CIVILIAN EMPLOYEE PAY ADJUSTMENTS, TO 
      TAKE EFFECT IN JANUARY 1998, PURSUANT TO 5 U.S.C. 5305(c)(1)





September 3, 1997.--Referred to the Committee on Government Reform and 
                  Oversight and ordered to be printed


                                           The White House,
                                       Washington, August 29, 1997.
Hon. Newt Gingrich,
Speaker of the House of Representatives,
Washington, DC.
    Dear Mr. Speaker: I am transmitting an alternative plan for 
Federal civilian employee pay adjustments, to take effect in 
January 1998.
    Under title 5, United States Code, Federal civilian 
employees would receive a two-part pay raise in January 1998: 
(1) a 2.8 percent base salary raise linked to the part of the 
Employment Cost Index (ECI) that deals with changes in the 
wages and salaries of private industry workers; and (2) a 
locality pay raise, based on the Bureau of Labor Statistics' 
salary surveys of nonfederal employers in local pay areas, 
costing about 7.2 percent of payroll. Thus, on a cost-of-
payroll basis, the total Federal employee pay increase would be 
about 10 percent in 1998.
    But, for each part of the two-part pay increase, title 5 
gives me the authority to implement an alternative pay 
adjustment 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.'' 
Over the past 20 years, Presidents have used this or similar 
authority for most annual Federal pay raises.
    In evaluating ``an economic condition affecting the general 
welfare,'' the law 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.
    In assessing Federal civilian pay increases for 1998, I 
reviewed the indicators cited above as well as other pertinent 
economic and budgetary factors--including the compatibility of 
pay increases with the limits on Federal discretionary spending 
under the Bipartisan Balanced Budget Agreement.
    The Budget Agreement continues the spending discipline that 
my Administration initiated in 1993 and that has contributed to 
sustained economic growth, low inflation and unemployment, and 
a sharp cut in the budget deficit. Full statutory civilian pay 
increases of 10 percent in 1998 are inconsistent with the task 
of reaching balance by 2002. They would cost about $7.9 billion 
in 1998 alone--$5.7 billion more than the 2.8 percent increase 
I proposed in my fiscal 1998 Budget--and would build in later 
years. Such cost increases either would threaten our achieving 
balance by 2002, or force deep cuts in discretionary spending 
or Federal employment to stay within spending targets. Neither 
outcome is acceptable for maintaining the economic prosperity 
of the American people.
    Therefore, I have determined that my proposal for a total 
civilian raise of 2.8 percent remains appropriate. This raise 
matches the 2.8 percent basic pay increase that I proposed for 
military members in my fiscal 1998 Budget, and that the 
Congress will likely include in the 1998 defense authorization 
bill.
    Because many Federal civilian employees do not receive 
locality pay, I will put the bulk of the 2.8 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:
          (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 2.3 percent, effective 
        on the first day of the first applicable pay period 
        beginning on or after January 1, 1998.
          (2) Under the authority of section 4304a 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, 
        1998. When compared with the payments now in effect, 
        these comparability payments will increase the General 
        Schedule payroll by about 0.5 percent.
    Finally, the law requires that I include in this report an 
assessment of the impact of my decisions 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 larger pay increase, I do not believe that 
it will materially affect our ability to continue to attract 
and retain a quality Federal work force.
    Due to our continuing efforts to reinvent Government, 
creating a Government that works better and costs less, the 
number of Federal employees continues to fall; consequently, 
hiring and attrition are low. In addition, should the need 
arise, the Government has many 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

                        Comparability Payment Effective January 1998 \1\
        Pay Locality                                        (In percent)
Atlanta MSA.......................................................  6.18
Boston CMSA.......................................................  8.61
Chicago CMSA......................................................  9.21
Cincinnati CMSA...................................................  7.71
Cleveland CMSA....................................................  6.35
Columbus, OH, MSA.................................................  6.90
Dallas CMSA.......................................................  6.90
Dayton MSA........................................................  6.19
Denver CMSA.......................................................  8.46
Detroit CMSA......................................................  9.36
Hartford MSA \2\..................................................  9.13
Houston CMSA...................................................... 11.96
Huntsville MSA....................................................  5.84
Indianapolis MSA..................................................  5.63
Kansas City MSA...................................................  6.06
Los Angeles CMSA \3\.............................................. 10.31
Miami CMSA........................................................  7.86
Milwaukee CMSA....................................................  6.19
Minneapolis MSA...................................................  7.32
New York CMSA.....................................................  9.76
Orlando MSA.......................................................  5.42
Philadelphia CMSA.................................................  7.67
Pittsburgh MSA....................................................  6.21
Portland, OR, CMSA................................................  7.17
Richmond MSA......................................................  6.12
Sacramento CMSA...................................................  7.64
St. Louis MSA.....................................................  5.71
San Diego MSA.....................................................  7.94
San Francisco CMSA................................................ 12.06
Seattle CMSA......................................................  7.34
Washington CMSA \4\...............................................  7.27
Rest of United States \5\.........................................  5.42

\1\ The comparability payment is a cumulative percentage, beginning with 
the first comparability payments in 1994, applied to base salary to 
calculate total pay. It is not the percentage increase in the 
comparability payment over the previous rate.
\2\ Pay locality also includes that portion of New London County, CT, 
not already part of the Hartford MSA.
\3\ Pay locality also includes Santa Barbara County and Edwards Air 
Force Base, CA.
\4\ Pay locality also includes St. Marys County, MD.
\5\ 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 96-08, June 
28, 1996.
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