- The Washington Times - Monday, December 11, 2006

It is the official policy of the U.S. government that it does not condone or practice torture, but there must be some kind of waiver when it comes to setting civil service salaries.

If you want to confuse somebody who lives and works outside the Beltway, give a crash course in how pay raises for federal workers are determined. Ditto for folks inside the Beltway.

In the 1990s, a Republican president and a Democratic Congress set up a supposedly fail-safe, politics-proof way to close the reputed 20-plus percent pay gap between government engineers, information technology specialists, lawyers, and administrative and clerical workers, and their private-sector counterparts. The idea was that within 20 years, starting in 1994, that gap would be closed gradually via a series of semiautomatic national and locality pay raises for 1.3 million white-collar civil servants. It didn’t exactly work out that way.

First President Clinton then President Bush use a legal loophole to attempt to hold down the raises spelled out in the 1990 law. It worked — up to a point.

The presidents recommended less than the annual raises as determined under the pay law formula. Each year, Congress went around the White House and imposed a slightly higher raise for feds. The problem was that even the higher raise was lower than the amount promised by the original law.

A dozen years after the fail-safe, politics-proof system was set up, feds continue to be well behind the private sector, according to official government data, for many jobs in many cities.

The next raise, for example, is due effective with the first pay period beginning on or after Jan. 1. So far, so good. But Congress failed in its plan to authorize a 2.7 percent raise for next year. As a result, the 2.2 percent amount proposed by the White House is the number in play.

If you aren’t confused yet, read on.

Earlier this month, the White House announced that its proposed 2.2 percent raise — the lowest in 18 years — would take effect, but that was before locality pay raises were figured into the equation.

The White House said that feds in the Washington-Baltimore area will get a 2.64 percent increase; those in New York City will get 3.02 percent, the highest; and employees in cities outside the locality pay loop will get 1.8 percent. Go figure.

To further confuse things, there is a chance that the Democrat-controlled Congress will authorize yet another raise that would bring up the national adjustment from 2.2 percent to 2.7 percent. That would mean that after the first pay adjustment feds would get a second raise that would be retroactive. Whether that happens remains to be seen.

Inquiring minds, with lots of time on their hands, may want to research the situation that is explained by the President’s Pay Agent. It said, in part:

“The cost of locality payments is the sum of all individual locality payments during a calendar year, offset by special salary rates. This amount is estimated using Office of Personnel Management records of all federal employees with duty stations within the continental United States (CONUS) as of March 2005 and covered by the General Schedule or other pay plan to which locality pay has been extended, together with the percentage locality payments from Table 2. The estimate assumes that the average number and distribution of employees (by locality, grade and step) in CONUS in 2007 will not differ substantially from the number and distribution in March 2005. The estimate does not include increases in premium pay costs or government contributions for retirement, life insurance, or other employee benefits that may be attributed to locality payments.

“Cost estimates are derived as follows. First, both the ‘scheduled annual rate of pay,’ as defined in 5 CFR 531.602, and the annual rate inclusive of special rates are determined for each employee. These rates are adjusted to include an assumed 2.1 percent across-the-board increase in January 2006 and the 1.7 percent across-the-board increase that would become effective in January 2007 under current law (under [the Federal Employees Pay Comparability Act], across-the-board increases are based on the change in the applicable [Employment Cost Index] minus 0.5 percentage points). Both annual rates are converted to expected annual earnings by multiplying each by an appropriate work schedule factor 0.9 The ‘gross locality payment’ is computed for each employee by multiplying expected annual earnings from the scheduled annual rate by the proposed locality payment percentage for the employee’s locality pay area. The sum of these gross locality payments is the cost of locality pay before offset by special rates.”

Or you can look at your pay stub in mid-February.

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