Will There Be a Pay Raise This Year?

Federal Salary Council

First of all, Federal employees do not get “cost-of-living” adjustments to their pay.  Rather, the Federal Salary Council (“FSC“), an advisory body of the Executive Branch of the United States Government, established under the provisions of the Section 5304(e)(1) of Title 5 of the United States Code, provides recommendations on the locality pay program created by the Federal Employees Pay Comparability Act of 1990.

The locality pay program provides for localized pay differentials (also known as comparability payments) for Federal employees paid under the General Schedule (GS) who work in the 48 CONtinental United States (CONUS).

The President of the United States appoints the members of the FSC, which include three experts in labor relations and pay policy and six representatives of Federal labor unions and other employee organizations representing large numbers of GS employees.
Currently, AFGE National President J. David Cox and Public Policy Director Jacqueline Simon serve on the FSC, having been appointed by President Barack Obama on November 9, 2010.

The FSC submits recommendations on the locality pay program to the President’s Pay Agent. The FSC’s recommendations cover the establishment or modification of pay localities, the coverage of salary surveys (conducted by the U.S. Department of Labor, Bureau of Labor Statistics) used to set locality pay, the process for making pay comparisons, and the level of comparability payments that should be made.
The FSC’s recommendations are advisory only and are not binding on the President.
However, it is the President’s Pay Agent makes the final determination as to the establishment or disestablishment of locality pay areas and also makes the final recommendation to the President regarding the amount of the annual Federal pay increase (if any).

History of the FY 2013 Pay Raise

On January 6, 2012, President Obama proposed a 0.5 percent pay raise for Federal employees, that would be reflected in its FY 2013 budget proposal to Congress.  Here is what a O.5% pay raise looks like for various example salaries, versus the previous pay raise which Federal employees received amounting to 2.01% for FY 2010 (our last pay raise of record).   

Salary Proposed FY 2013 Pay Raise – 0.5 % Total Increase  Pay Raise FY 2010 – 2.01% Total Increase 
  30,000 $150 $630
  40,000 $200 $840
  50,000 $250 $1,050
  60.000 $300 $1,260
  70,000 $350 $1,470
  80,000 $400 $1,680
  90,000 $450 $1,890
100,000 $500 $2,100
110,000 $550 $2,310
120,000 $600 $2,520

On Tuesday August 21, 2012, President Obama said he would use his authority to give federal employees an across-the-board 0.5 percent pay raise in 2013, but the across-the-board salary increase was contingent upon Congress accomplishing what it is apparently incapable of these days: agreeing on a long-term spending plan to fund the government.

On September 10, 2012, U.S. House of Representatives Joint Resolution 117 was introduced by Congressional Representative Hal Rogers of Kentucky.
On Friday, September 28, 2012, President Barack Obama signed a continuing appropriations resolution (H.J.Res. 117) that provided funding for the federal government and extended the federal pay freeze through Wednesday, March 27, 2013.   The Continuing Resolution or CR was a de facto extension of the current two-year freeze.
Therefore, no pay raise this year thus far.  If the Federal government does not pass a budget for the entire fiscal year, then Federal employees can expect to get a pay raise of “nada.”

The Bad News

Reducing certain pay and benefits for the federal workforce could cut the deficit by $38 billion in 2020, according to a new analysis of the country’s fiscal crisis from the Congressional Budget Office.  Lawmakers have a range of options for cutting spending and increasing revenues to rein in the government’s current trillion-dollar deficit, CBO said.
And those choices could include increasing health care costs for military retirees, decreasing the government’s contribution to the Federal Employees Health Benefits Program, capping increases in military basic pay and reducing the annual across-the-board pay raise for feds.

The specific possibilities related to federal pay and benefits and their estimated potential deficit reduction in 2020 outlined in CBO’s analysis are:
Adopt a voucher plan and slow the growth of federal contributions for FEHBP ($5 billion)
Reduce the across-the-board adjustment for nondefense federal civilian employees’ pay ($6 billion)

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