- The Washington Times - Monday, September 15, 2003

Compared with other regions, the Washington area is virtually recession-proof. If you doubt it, then look for an $8-an-hour job in Austin, Atlanta, Seattle or just about any other place.

Metro Washington is kept afloat on the multibillion-dollar federal payroll, which goes to more than 300,000 federal civil servants and more than 60,000 military personnel.

Its federal-military retiree community — more than 100,000 people — is generally better off (thanks in part to inflation-indexed retirement checks) than in other areas with large concentrations of senior citizens.

So it is both good news and bad news that the next federal-military pay raise is looking like a 4.1 percent adjustment despite White House efforts to hold civilians (but not the military) to a 2 percent increase.



Regardless of the size of the national/locality raise in January, about half the federal work force stands to get a second, longevity (for time in grade) raise of 3 percent next year.

The good news is that feds, and the area, can use the money. Official government data show that on a job-for-job basis feds in mid- and upper-level positions are paid less than their private-sector counterparts, especially in big cities.

The Clinton and Bush administrations have refused to go along with higher pay raises, designed by law to close the “pay gap.” They say the comparisons don’t measure total compensation in the form of benefits such as retirement, health insurance for life, a good vacation package, etc.

The bad news is that the higher federal pay raise (4.1 percent instead of 2 percent) could prompt one or two actions from the White House:

• The president could veto the Treasury-Transportation bill, which includes the higher pay raise and language that blocks a White House plan to speed up the process that could convert thousands of civil service jobs to contract operations.

Whether a veto would work for the president or backfire is anybody’s guess. President Clinton won the public relations battle when he vetoed appropriations bills as the Oct. 1 fiscal year was starting, triggering a government shutdown.

No feds lost pay, although many were furloughed for several days, but the public perception was that congressional Republicans had caused the shutdown.

• The White House, with the backing of pro-contractor, antibureaucrat members of Congress, could drag out a list of cost-cutting measures that would whack the cost of government operations and the benefits of future federal retirees.

That “horror list” is prepared, and usually ignored, each year by the Congressional Budget Office. It is a series of options, without editorial comment from the CBO, as to ways the government could save money.

They range from the unthinkable (eliminating the tax break for home mortgage interest) to such close-to-home items as giving federal retirees COLAs (cost-of-living adjustments) and basing federal retirement benefits on the employees’ highest-five-year (instead of the current high-three formula) average salaries.

COLAs would mean that the vast majority of feds, who now get a full inflation catch-up each January, would get one or two percentage points less than the average increase in living costs as measured by the Consumer Price Index.

At best, if the 4.1 percent pay raise goes into effect, most federal agencies will be required to absorb the extra costs. That could mean tighter controls on travel and training as well as fewer promotions.

If Congress succeeds in making contracting-out tougher, the administration will look for ways around any such roadblock.

Mike Causey, senior editor at FederalNewsRadio.com, can be reached at 202/895-5132 or [email protected]federalnewsradio.com.

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