- The Washington Times - Monday, September 8, 2003

Federal workers who make lateral transfers from Houston to Washington take pay cuts. Under the federal locality pay system, Houston, the nation’s oil capital, is deemed a higher-wage town than Washington, which many consider the nation’s hot-air center.

Despite their higher income — as much as $100 per week more — Houston-based feds get bigger expense accounts when they come to Washington on official business than when Washington-based civil servants travel to Houston.

Beginning next month, the official per-diem (daily expense account maximum) for Washington visitors will be $201. By comparison, feds who visit the Johnson Space Center or other federal facilities in greater Houston will be allowed to spend a maximum of only $134.

Go figure.

Feds in Houston get paid more because hometown salaries (can you say Enron?) in key occupations surveyed pay better than the same types of jobs in the Washington area. So say experts from the Bureau of Labor Statistics, who supply the raw material that is used in part to determine city-by-city pay differentials for Uncle Sam.

Higher salaries translate into a higher retirement annuity, higher employer contributions to 401(k) plans, and life insurance policies worth more to survivors.

And if you do understand how locality pay is supposed to work, and how per-diem payments are set, rest assured you are probably wrong.

Locality pay has never really worked because both the Clinton and Bush administrations have said you can’t compare salaries alone to determine whether the federal government is paying workers better, worse or about the same as their counterparts in other major cities.

Presidents Clinton and Bush have wanted other factors (such as inflation-indexed pensions, cumulative sick leave, holidays and vacations) tossed into the mix when federal pay sleuths go to other cities each year to see what the private sector is paying.

Unless and until that happens, the 1990 Federal Employees Pay Comparability Act, which calls for national and locality raises each year for feds, will never be fully implemented.

Each year since its enactment, the president du jour has used a legal loophole (bad economy, good economy, national emergency, potential national emergency, etc.) to shave the raises that the act requires.

Fortunately for feds in New York, Los Angeles, San Francisco and, of course, Houston, the job matchups were made using a different yardstick. The fact that two of the last three presidents have been from Texas is sheer coincidence, officials say.

To check out the government’s pay scale on a city-by-city basis, visit the Web site www.opm.gov.

You may be surprised by the high- versus low-wage cities and where Washington stands in the pack.

To look at the new per-diem rates (effective Oct. 1) for traveling civil servants, go to www.gsa.gov.

When you unravel the mystery of how a high-wage city can be a cheap place to visit, let me know ASAP.

Speaking of pay raises

Feds who are in a funk because the White House wants to limit them to a 2 percent raise next year can relax, or at least put their worries on hold for a while.

Two reasons: First, the pay drama runs along the same lines each year (since 1993) and it is right on track for this time of year.

Here’s how it works: First, the president proposes a lesser raise (this year 2 percent for feds, 4.1 percent for the military). Second, Congress reacts — with Rep. Steny H. Hoyer, Maryland Democrat, usually in the lead, raising the amount of the January increase, then insulating it from a veto in the Treasury-Transportation bill.

Finally, usually at the end of the year, feds find out they’ve gotten the higher amount — but not after many emotional ups and downs.

The second reason not to worry is the fact that about half of the civilian white-collar federal work force will get a second pay raise next year, regardless of and in addition to the January increase. It will come in the form of a 3 percent within-grade pay raise that 99 percent of all feds get whenever they have spent either one, two or three years in their same pay grade. The spread between the first and last (10th) step of each civil service grade is about 30 percent.

The Bush administration wants to eliminate the automatic within-grade raises and substitute a pay-for-performance system within a pay band combining three or more civil-service grades.

The idea delights managers and public-administration school graduates. But it frightens many feds who live in the real (or a more real) world, who see pay-for-performance as a return to the spoils or buddy system.

Mike Causey, senior editor at FederalNewsRadio.com, can be reached at 202/895-5132 or mcausey@federalnewsradio.com.

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