[House Document 109-154]
[From the U.S. Government Publishing Office]






109th Congress, 2d Session - - - - - - - - - - - - - - - - Document 109-154


 
             AN ALTERNATIVE PLAN FOR LOCALITY PAY INCREASES

                               __________

                             COMMUNICATION

                                  from

                     THEPRESIDENTOFTHEUNITEDSTATES

                              transmitting

   AN ALTERNATIVE PLAN FOR LOCALITY PAY INCREASE PAYABLE TO CIVILIAN 
  FEDERAL EMPLOYEES COVERED BY THE GENERAL SCHEDULE (GS) AND CERTAIN 
   OTHER PAY SYSTEMS IN JANUARY 2007, PURSUANT TO 5 U.S.C. 5305(a)(3)




 December 5, 2006.--Referred to the Committee on Government Reform and 
                         ordered to be printed
                                           The White House,
                                     Washington, November 30, 2006.
Hon. J. Dennis Hastert,
Speaker of the House of Representatives,
Washington, DC
    Dear Mr. Speaker: I am transmitting an alternative plan for 
locality pay increases payable to civilian Federal employees 
covered by the General Schedule (GS) and certain other pay 
systems in January 2007.
    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 2007: (1) A 1.7 
percent across-the-board adjustment 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 6.9 
percent locality pay adjustment based on Bureau of Labor 
Statistics' salary surveys of non-Federal employers in each 
locality pay area. According to the statutory formula, for 
Federal employees covered by the locality pay system, the 
overall average pay increase would be about 8.6 percent. The 
total Federal employee pay increase would cost about $8.8 
billion in fiscal year 2007 alone.
    Title 5, United States Code, authorizes me to implement an 
alternative locality 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 set an alternative January 2007 
locality pay increase.
    A national emergency, within the meaning of chapter 53 of 
title 5, has existed since September 11, 2001, that includes 
Operation Enduring Freedom in Afghanistan and Operation Iraqi 
Freedom. The growth in Federal requirements is straining the 
Federal budget. Full statutory civilian pay increases costing 
$8.8 billion in 2007 alone would interfere with our Nation's 
ability to pursue the war on terrorism.
    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 locality pay 
increase of 0.5 percent would be appropriate for GS and certain 
other employees in January 2007. Our national situation 
precludes granting larger locality pay increases at this time.
    Accordingly, I have determined that under the authority of 
section 5304a of title 5, United States Code, locality-based 
comparability payments for the locality pay areas in amounts 
set forth in the attached table shall become effective on the 
first day of the first applicable pay period beginning on or 
after January 1, 2007. When compared with the payments 
currently in effect, these comparability payments will increase 
the General Schedule payroll by 0.5 percent.
    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 what I have proposed 
would likely be unfunded, agencies would have to absorb the 
additional cost and could have to freeze hiring in order to pay 
the higher rates. Moreover, GS ``quit'' rates continue to be 
very low (2.0 percent on an annual basis), 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 
Nation so very well.
            Sincerely,
                                                    George W. Bush.

   2007 Locality-Based Comparability Payments Under Alternative Plan

        Locality Pay Area                    Locality Payment Percentage
Atlanta-Sandy Springs-Gainesville, GA-AL......................     15.89
Boston-Worcester-Manchester, MA-NH-ME-RI......................     20.97
Buffalo-Niagara-Cattaraugus, NY...............................     14.15
Chicago-Naperville-Michigan City, IL-IN-WI....................     21.79
Cincinnati-Middletown-Wilmington, OH-KY-IN....................     17.38
Cleveland-Akron-Elyria, OH....................................     15.96
Columbus-Marion-Chillicothe, OH...............................     15.00
Dallas-Fort Worth, TX.........................................     17.34
Dayton-Springfield-Greenville, OH.............................     14.27
Denver-Aurora-Boulder, CO.....................................     20.02
Detroit-Warren-Flint, MI......................................     21.53
Hartford-West Hartford-Willimantic, CT-MA.....................     22.44
Houston-Baytown-Huntsville, TX................................     26.65
Huntsville-Decatur, AL........................................     13.60
Indianapolis-Anderson-Columbus, IN............................     13.00
Los Angeles-Long Beach-Riverside, CA..........................     24.03
Miami-Fort Lauderdale-Miami Beach, FL.........................     18.30
Milwaukee-Racine-Waukesha, WI.................................     15.54
Minneapolis-St. Paul-St. Cloud, MN-WI.........................     18.17
New York-Newark-Bridgeport, NY-NJ-CT-PA.......................     24.57
Philadelphia-Camden-Vineland, PA-NJ-DE-MD.....................     18.85
Phoenix-Mesa-Scottsdale, AZ...................................     13.22
Pittsburgh-New Castle, PA.....................................     14.16
Portland-Vancouver-Beaverton, OR-WA...........................     17.63
Raleigh-Durham-Cary, NC.......................................     16.18
Richmond, VA..................................................     14.41
Sacramento-Arden-Arcade-Truckee, CA-NV........................     18.99
San Diego-Carlsbad-San Marcos, CA.............................     20.34
San Jose-San Francisco-Oakland, CA............................     30.33
Seattle-Tacoma-Olympia, WA....................................     18.58
Washington-Baltimore-Northern Virginia, DC-MD-PA-VA-WV........     18.59
Rest of U.S...................................................     12.64

                                  
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