    [Public Papers of the Presidents of the United States: George W. Bush (2007, Book II)]
    [November 27, 2007]
    [Pages 1500-1501]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Letter to Congressional Leaders Transmitting an Alternative Plan for
    Locality Pay Increases Payable to Civilian Federal Employees
    November 27, 2007

    Dear Madam 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) and certain other pay systems in January 2008.
        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 2008: (1) a 2.5 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) locality pay adjustments averaging 12.5 percent 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 15.0 percent.
        Title 5, United States Code, authorizes me to implement an
    alternative locality pay plan if I view the adjustments 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 is appropriate to
    exercise my statutory alternative plan authority to set alternative
    January 2008 locality pay increases.
        A national emergency, within the meaning of chapter 53 of title 5,
    has existed since September 11, 2001. Full statutory civilian pay
    increases would cost $16.4 billion in 2008 alone. That amount exceeds by
    $12.7 billion the cost of a 3.0 percent overall Federal civilian pay
    increase that I proposed in my 2008 Budget. Furthermore, the costs would
    grow at compounded rates in subsequent years. Such cost increases would
    force deep cuts in discretionary spending or Federal employment to stay
    within budget. Either outcome would unacceptably interfere with our
    Nation's ability to secure the homeland and pursue the war on terrorism.
        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 established by the President's Pay

    [[Page 1501]]

    Agent, in the 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, 2008. When compared with the payments currently
    in effect, these comparability payments will increase the General
    Schedule payroll by about 0.5 percent. When combined with the 2.5
    percent across-the-board increase, the 3.0 percent total increase equals
    the 12-month increase in overall nationwide labor costs as of September
    2006 (the reference period for decisions about the January 2008 pay
    adjustment under current law). Our national situation precludes granting
    larger locality pay increases at this time.
        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 the amount proposed in this alternative plan would likely be
    unfunded, agencies would have to absorb the additional cost and could
    have to freeze hiring to pay the higher rates. Moreover, the GS ``quit''
    rate continues to be very low (2.1 percent on an annual basis), well
    below the overall average ``quit'' rate in private enterprise. Should
    the need arise, the Government has many compensation flexibilities, such
    as special salary rates and recruitment and retention incentives, to
    maintain the high quality workforce that serves our Nation.
             Sincerely,

                                                              George W. Bush

    Note: Identical letters were sent to Nancy Pelosi, 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 28.