    [Public Papers of the Presidents of the United States: William J. Clinton (1995, Book II)]
    [August 31, 1995]
    [Pages 1275-1276]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Letter to Congressional Leaders on the Alternative Plan for Federal Pay
    Adjustment
    August 31, 1995

    Dear Mr. Speaker:  (Dear Mr. President:)
        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

    [[Page 1276]]

    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 an
    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

    Note: Identical letters were sent to Newt Gingrich, Speaker of the House
    of Representatives, and Albert Gore, Jr., President of the Senate. The
    locality based comparability payment table was attached to the
    President's letter. This letter was released by the Office of the Press
    Secretary on September 1.