1.9 Percent Raise for Feds Likely Won’t Be Blocked by Congress

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By Louis C. LaBrecque

The prospects of a 1.9 percent federal pay increase next January look good, based on Congress’s initial reaction. Or, more accurately, the lack of any reaction.

Mick Mulvaney, director of the White House Office of Management and Budget, told reporters in April that President Donald Trump would seek a 1.9 percent raise for federal workers next January. Trump followed up by calling for the increase in the fiscal year 2018 budget request the administration released in May.

Congress has the power to block the president’s request or to substitute a different percentage increase. But draft legislation to fund the federal government in FY 2018, approved June 29 by the House Appropriations Subcommittee on Financial Services and General Government, doesn’t mention the increase.

Not Worth Fighting Over?

The lack of action so far on the proposed 2018 raise is consistent with Congress’s recent history of not stopping federal pay increases proposed by President Barack Obama.

Congress didn’t act even when Obama in December 2016 upped the calendar year 2017 federal pay increase to an average of 2.1 percent, compared with the average 1.6 percent increase he earlier requested. Because of Congress’s lack of action after Obama issued a letter on Dec. 8, 2016, calling for the higher increase, the 2.1 percent increase went through.

One reason there was so little friction between Obama and Congress over federal pay may be that the president’s proposed increases weren’t significant enough to fight over. Unions representing federal employees repeatedly criticized Obama for providing inadequate pay increases during his eight years in the White House.

The 2.1 percent average pay increase granted to federal workers in calendar year 2017 was the largest of Obama’s presidency. Federal workers got a 2 percent average increase in calendar year 2010; experienced a three-year pay freeze on across-the-board increases from 2011 through 2013; got two 1 percent increases in 2014-2015; and received a 1.3 percent average pay increase in calendar year 2016.

Retirement Contributions Would Eat at Paychecks

In this budget cycle, the stakes are higher, not because of the size of the federal pay increase but because the Trump administration wants to ask government employees to contribute a much larger amount toward their retirements.

Trump’s FY 2018 budget proposal calls for federal workers to pay for half the cost of their retirement plans—amounting to about 7 percent of their salaries. The increase would be phased in over six years under the president’s proposal, which would mean the amount that long-time federal employees pay toward retirement would increase by about 1 percent of salary per year for six years.

It’s unclear whether Congress will agree to boost federal employee retirement contributions. But the past two retirement contribution increases happened recently.

Under current law, federal workers hired before Jan. 1, 2013, pay 0.8 percent of their salaries toward their retirement plans under the Federal Employees Retirement System. By contrast, those hired during calendar year 2013 pay 3.1 percent, and those hired after 2013 pay 4.4 percent.

To contact the reporter on this story: Louis C. LaBrecque in Washington at llabrecque@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Chris Opfer at copfer@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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