[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.