- The Washington Times - Monday, October 2, 2006

There is good news and bad news on the federal employee and military pay front.

The good news is that Congress finally has passed legislation that would guarantee a pay raise effective in January.

The not-so-good news: The raise, part of the defense authorization bill, is only for uniformed military personnel — not federal workers — and is only 2.2 percent.

Confused? Welcome to the club. Here is what’s happening in the annual pay battle between Congress and the White House.

President Bush originally proposed a 2.2 percent raise, effective in January, for both federal and military personnel.

Congress followed the same script it has used for the past dozen years and said that’s not enough. Instead, it included funds for a 2.7 percent raise, for both civilian and military personnel, in the Treasury appropriations bill. That’s the typical vehicle Congress uses to boost raises and ensure that civilian and military groups get the same percentage raise.

The problem is that Congress has been slow to approve appropriations bills. The money package with the higher 2.7 percent raise was left unfinished as Congress recessed for the pre-election period.

When lawmakers return Nov. 13, it will be to a lame duck Congress. Some of the incumbents will have lost their elections on Nov. 7. Control of the House, Senate or both may have shifted from the Republicans to the Democrats. In any case, Congress may or may not get around to approving the appropriations bill that includes the 2.7 percent raise.

Insiders expect President Bush to go along with a higher figure if Congress approves it, but he may not.

Bottom line: Nobody, including members of the House and Senate, know what will happen on the federal/military pay raise.

When the final figure is announced, it will be up to the president to designate, or not, how much of that total increase will be used to fund locality pay raises. The White House typically earmarks about one percentage point of the raise for city-by-city adjustments. In the past, the Baltimore-Washington area has qualified for raises slightly higher than the amount approved for the general increase.

But so much is up in the air that it is hard to explain and digest the possibilities — much less predict the final figure.

Don’t let money slip away

If your agency offered you a tax-deferred 4 percent pay raise, would you take it? That’s a no-brainer, correct?

The vast majority of feds hired since the mid-1980s have taken such an offer by signing up for the Thrift Savings Plan (TSP), the government’s in-house 401(k) program for civilian and military personnel.

Workers under the newer Federal Employees Retirement System get an automatic 1 percent contribution to their TSP accounts. But in order to qualify for an additional 4 percent tax-deferred match from their agency, they must sign up for the TSP.

More than 265,000 feds qualify, but many thousands haven’t signed up. In effect, they are leaving a tax-deferred pay raise on the table. The solution: If you are in the FERS system, sign up now.

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

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