    [Public Papers of the Presidents of the United States: George W. Bush (2002, Book II)]
    [November 27, 2002]
    [Pages 2142-2143]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Letter to Congressional Leaders Transmitting an Alternative Plan for
    Locality Pay Increases for Civilian Federal Employees
    November 27, 2002

    Dear Mr. Speaker:  (Dear Mr. President:)
        I am transmitting an alternative plan for locality pay increases
    payable to civilian Federal employees covered by the General Schedule
    (GS) pay system in January 2003.
        Under title 5, United States Code, civilian Federal employees
    covered by the GS pay system would receive a two-part pay increase in
    January 2003: (1) a 3.1 percent across-the-board increase in scheduled
    GS rates of basic pay 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 increase based on Bureau of
    Labor Statistics' salary surveys. For Federal employees covered by the
    locality pay system, the overall average pay increase would be about
    18.6 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 locality pay portion of the January 2003 GS pay
    increase.
        A national emergency has existed since September 11, 2001. Full
    statutory civilian pay increases in 2003 would interfere with our
    Nation's ability to pursue the war on terrorism. They would cost about
    $13.6 billion in 2003 alone--$11.2 billion more than the 2.6 percent
    overall Federal civilian pay increase I proposed in my 2003 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
    3.1 percent would be appropriate for GS employees in January 2003.
        Because 5 U.S.C. 5303 already mandates an across-the-board GS pay
    increase of 3.1

    [[Page 2143]]

    percent in January 2003, GS locality-based comparability payments under
    5 U.S.C. 5304 must remain at current levels. While my Administration
    remains committed to the principle of adjusting civilian Federal pay
    rates in keeping with changes in local labor market rates, 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(a) of title 5, United States
    Code, the pay rates for each statutory pay system will be increased by
    3.1 percent, effective on the first day of the first applicable pay
    period beginning on or after January 1, 2003; 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 remain in effect in 2003.
        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. Inflation, as measured by the
    Consumer Price Index, is at 2.1 percent, well below the 3.1 percent
    across-the-board pay increase already mandated by current law, and
    Federal quit rates are at an all-time low of 2.1 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 Nation so very well.
            Sincerely,

                                                              George W. Bush

    Note: Identical letters were sent to J. Dennis Hastert, Speaker of the
    House of Representatives, and Richard B. Cheney, President of the
    Senate. This letter was released by the Office of the Press Secretary on
    November 29.