- The Washington Times - Monday, August 14, 2006

Federal employees lucky enough to be sent to Vail, Colo., during the December-to-March ski season will have to get by on $365 per day, up to $301 daily for a room and $64 for breakfast, lunch and dinner.

If their conference, investigation or audit takes place in other Colorado spots, such as Aspen or Crested Butte, they will have a per diem of $289 in season.

In Manhattan, the city that never sleeps, the per diem is $338. For Washington, D.C., probably the most visited city for feds on official business, it is $259.

Although studying per diem figures might be fun and educational, it also can confuse feds trying to figure out why federal pay varies so much from city to city. Per diems don’t appear to have any close connection with the cost of living, and they don’t.

Under the complex federal locality pay system, feds in Houston, which has overall lower costs than the Washington area, are paid more and receive bigger raises. Feds in Boston, New York, Los Angeles and Chicago also are paid more than civil servants here. The issue isn’t the cost of living, but rather local wages that the government uses for comparison purposes.

Some people in the Washington area — who don’t travel much and don’t have out-of-town relatives — think this is the high-cost, high-price, low-wage capital of the nation. It isn’t, by a long shot.

Per diem limits, for example, are set based on the costs of food and lodging, as surveyed by the General Services Administration. Most hotels and motels nationwide offer special discount rates to federal travelers. Bedding down in many other places is more expensive than it is here.

Federal pay rates are based on salaries, excluding the value of fringe benefits, in dominant private-sector occupations in each of more than 30 cities. They are compared with similar jobs in the government. That’s one reason that Houston, with loads of oil-related jobs, is a top-paying federal town. It also explains why the Research Triangle area of Raleigh-Durham-Cary, N.C., chock-full of scientists and specialists, got the biggest raise when it joined the locality pay loop this year. The 5.62 percent increase was considered a catch-up.

Congress has won 12 of the past 12 battles with the White House over the size of the federal pay raise. The president usually designates a portion of that January raise for “locality” adjustments. This year the federal pay raise was 3.1 percent, but with the locality factor, feds here got a 3.44 percent raise.

If you understand the difference between setting federal pay and setting federal per diem rates, here’s another equation to mess with your mind. Once civil servants and military people retire, their annuity or retirement pay then is linked to the rate of inflation, which is different from the local cost-of-living or locality pay raises.

For the retirees, like people under Social Security, the driving force is the rise in the cost of living as measured by the Consumer Price Index. With several months to go before the next cost-of-living adjustment, the vast majority of retirees are due a COLA of at least 3.1 percent.

Now you know why Vail is the top per diem location, why feds in Houston and San Francisco are among the top paid, why feds in Raleigh and Durham get the biggest raises and why retirees, whether they live on Maui or in Dogpatch, get the same raises each year.

• Mike Causey, senior editor at Federal News Radio AM 1050, can be reached at 202/895-5132 or [email protected]

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