[Weekly Compilation of Presidential Documents Volume 33, Number 35 (Monday, September 1, 1997)]
[Pages 1269-1270]
[Online from the Government Publishing Office, www.gpo.gov]
<R04>
Letter to Congressional Leaders Transmitting an Alternative Plan for
Federal Civilian Employee Pay Adjustments
August 29, 1997
Dear Mr. Speaker: (Dear Mr. President:)
I am transmitting an alternative plan for Federal civilian employee
pay adjustments, to take effect in January 1998.
Under title 5, United States Code, Federal civilian employees would
receive a two-part pay raise in January 1998: (1) a 2.8 percent base
salary raise 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 raise, based on the Bureau of Labor
Statistics' salary surveys of nonfederal employers in local pay areas,
costing about 7.2 percent of payroll. Thus, on a cost-of-payroll basis,
the total Federal employee pay increase would be about 10 percent in
1998.
But, for each part of the two-part pay increase, title 5 gives me
the authority to implement an alternative pay adjustment 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.'' Over the past 20 years, Presidents have used this or
similar authority for most annual Federal pay raises.
In evaluating ``an economic condition affecting the general
welfare,'' the law 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.
In assessing Federal civilian pay increases for 1998, I reviewed the
indicators cited above as well as other pertinent economic and budgetary
factors--including the compatibility of pay increases with the limits on
Federal discretionary spending under the Bipartisan Balanced Budget
Agreement.
The Budget Agreement continues the spending discipline that my
Administration initiated in 1993 and that has contributed to sustained
economic growth, low inflation and unemployment, and a sharp cut in the
budget deficit. Full statutory civilian pay increases of 10 percent in
1998 are inconsistent with the task of reaching balance by 2002. They
would cost about $7.9 billion in 1998 alone--$5.7 billion more than the
2.8 percent increase I proposed in my fiscal 1998 Budget--and would
build in later years. Such cost increases either would threaten our
achieving balance by 2002, or force deep cuts in discretionary spending
or Federal employment to stay within spending targets. Neither out
[[Page 1270]]
come is acceptable for maintaining the economic prosperity of the
American people.
Therefore, I have determined that my proposal for a total civilian
raise of 2.8 percent remains appropriate. This raise matches the 2.8
percent basic pay increase that I proposed for military members in my
fiscal 1998 Budget, and that the Congress will likely include in the
1998 defense authorization bill.
Because many Federal civilian employees do not receive locality pay,
I will put the bulk of the 2.8 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:
(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 2.3 percent, effective on the first
day of the first applicable pay period beginning on or after
January 1, 1998.
(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, 1998. When compared with
the payments now in effect, these comparability payments
will increase the General Schedule payroll by about 0.5
percent.
Finally, the law requires that I include in this report an
assessment of the impact of my decisions 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 larger pay
increase, I do not believe that it will materially affect our ability to
continue to attract and retain a quality Federal work force.
Due to our continuing efforts to reinvent Government, creating a
Government that works better and costs less, the number of Federal
employees continues to fall; consequently, hiring and attrition are low.
In addition, should the need arise, the Government has many 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.