Thread: 2%

**James48843** · 09-01-2009, 04:00 PM

TEXT OF A LETTER FROM THE PRESIDENT TO THE SPEAKER OF THE HOUSE OF REPRESENTATIVES AND THE PRESIDENT OF THE SENATE
August 31, 2009

Dear Madam Speaker: (Mr. President)

I am transmitting an alternative plan for pay increases for civilian Federal employees covered by the General Schedule (GS) and certain other pay systems in January 2010.

Under title 5, United States Code, civilian Federal employees covered by the GS and certain other pay systems would receive a two-part pay increase in January 2010: (1) a 2.4 percent across-the-board adjustment in scheduled rates of basic pay derived from Employment Cost Index data on changes in the wages and salaries of private industry workers, and (2) locality pay adjustments averaging 16.5 percent based on Bureau of Labor Statistics salary surveys of non-Federal employers in each locality pay area. According to the statutory formula, for Federal employees covered by the locality pay system, the overall average pay increase would be about 18.9 percent. This total Federal employee pay increase would cost about $22.6 billion in fiscal year 2010 alone.

Title 5, United States Code, authorizes me to implement an alternative pay plan if I view the adjustments that would otherwise take effect as inappropriate due to "national emergency or serious economic conditions affecting the general welfare." For the reasons described below, I have determined that it is appropriate to exercise my statutory alternative plan authority to set an alternative January 2010 across-the-board pay increase. If needed, I will provide a plan for locality pay rates by the statutory deadline of November 30.

A national emergency, within the meaning of chapter 53 of title 5, has existed since September 11, 2001. Likewise, with unemployment at 9.5 percent in June to cite just one economic indicator, few would disagree that our country is facing serious economic conditions affecting the general welfare. The growth in Federal requirements is straining the Federal budget. Full statutory civilian pay increases costing $22.6 billion in 2010 alone would put even more stress on our budget. Such an increase would cost $19.9 billion more than the 2.0 percent overall Federal civilian pay increase that I proposed in my 2010 Budget and would build in later years.

Accordingly, I have determined that under the authority of section 5303(b) of title 5, United States Code, an across-the board increase of 2.0 percent shall go into effect on the first day of the first applicable pay period beginning on or after January 1, 2010.
Finally, the law requires that I include in this report an assessment of the impact of my decision on the Government's ability to recruit and retain well-qualified employees. I do not believe this decision will materially affect our ability to continue to attract and retain a quality Federal workforce.

To the contrary, since any pay raise above the amount proposed in this alternative plan would likely be unfunded, agencies would have to absorb the additional cost and could have to reduce hiring to pay the higher rates. Moreover, the GS "quit" rate continues to be very low (2.1 percent on an annual basis), well below the overall average "quit" rate in private enterprise. Should the need arise, the Government has many compensation flexibilities, such as recruitment and retention incentives, and special salary rates, to maintain the high quality workforce that serves our Nation.

Sincerely,

BARACK OBAMA

**nnuut** · 09-01-2009, 04:09 PM

Hope they overrule his BUTT and knock him down another notch, they usually do, based on pay compatibility with the Military raise.

**Boghie** · 09-01-2009, 04:28 PM

NNuut,

The United States (in fact much of the world) has been in deflation for at least the past year - probably the last 18 months.

Logically they could demand a 0% cost of living (like Social Security) or even mandate a -2% adjustment to employees salaries. How do we logically ask for an inflation adjustment?

It was a question I asked when the HRO types were 'teaching' us about NSPS. They kept yakking about COLAs and inflation adjustments - I asked them about deflation. This was in 2006. Living in Kalifornia it was obvious that we were inside a giant economic bubble. My house, for example, inflated in price by 300% in 8 years. Not sustainable. Thus deflation was imminent.

Deflation is why the Federal Reserve started flying helicopters around the nation - dropping money and buying Treasuries. The FED knows how to fight inflation (we won't like their solution in about a year), but deflation is a very different beast - especially in a panic spiral.

Finally, the public will demand cuts in gubmint spending. Already happening in Kalifornia. Spending for the Children and whining about firing emergency personnel isn't working. Kalifornians are demanding that the State restructure itself - and the longer the state delays the harder it will be to do so.

Oh well...

**nnuut** · 09-01-2009, 04:55 PM

Originally Posted by Boghie

NNuut,

The United States (in fact much of the world) has been in deflation for at least the past year - probably the last 18 months.

Logically they could demand a 0% cost of living (like Social Security) or even mandate a -2% adjustment to employees salaries. How do we logically ask for an inflation adjustment?

It was a question I asked when the HRO types were 'teaching' us about NSPS. They kept yakking about COLAs and inflation adjustments - I asked them about deflation. This was in 2006. Living in Kalifornia it was obvious that we were inside a giant economic bubble. My house, for example, inflated in price by 300% in 8 years. Not sustainable. Thus deflation was imminent.

Deflation is why the Federal Reserve started flying helicopters around the nation - dropping money and buying Treasuries. The FED knows how to fight inflation (we won't like their solution in about a year), but deflation is a very different beast - especially in a panic spiral.

Finally, the public will demand cuts in gubmint spending. Already happening in Kalifornia. Spending for the Children and whining about firing emergency personnel isn't working. Kalifornians are demanding that the State restructure itself - and the longer the state delays the harder it will be to do so.

Oh well...

Boghie I understand what you are saying and you are right, if you believe the numbers? I don't believe the numbers, they are manipulated to suit their purposes and really don't reflect inflation/deflation on the consumer. Do you see deflation (housing, YES) how about the cost of living? They are stacking the deck, even though Government employees don't get a "Cost of Living", our yearly raise has nothing to do with the cost of living, retirees adjustment is based on the CPI ours on the whims of congress and the President!

**Buster** · 09-01-2009, 06:50 PM

As long as I have 80 hours/PP and I have the job security ..+2.0% is acceptable for me..last year we only got 3.52% total in my area.

**ATCJeff** · 09-01-2009, 08:36 PM

401K limit next year is schedule to decrease for the first time ever to $16,000. Not sure what catch-up will be.

**Buster** · 09-01-2009, 08:47 PM

Originally Posted by ATCJeff

401K limit next year is schedule to decrease for the first time ever to $16,000. Not sure what catch-up will be.

That will entirely depend on Mrs Kerry....

**fabijo** · 12-01-2009, 01:59 PM

Also, no locality pay increase:

http://www.google.com/hostednews/ap/...YFkzgD9CA8FL83

**phil** · 12-01-2009, 11:27 PM

I'm not affected by locality pay, but 2% pay raise is fine, considering the state of the economy.

I remember some of my private sector friends enjoying the good times when the economy was really rolling. Now, however, things are slightly different.

**fabijo** · 12-02-2009, 01:28 AM

I've got no problem with the increase, either. It's an increase, isn't it?

It looks like people are ranting about the lack of locality increase, though.

http://www.govexec.com/story_page.cfm?articleid=44149

Obama is first president to freeze locality pay

President Obama plans to freeze locality pay rates at 2009 levels for civilian federal employees in 2010, a move that has prompted protests from government employee groups.

And the comments on the following article are full of complaints:

http://www.govexec.com/story_page.cfm?articleid=44143

**Boghie** · 12-02-2009, 01:43 AM

We should give all those whiners Fabijo referenced in the articles the inflation adjustment they deserve.

This year (so far) inflation is running at: -1.3%.

Enjoy the pay cut

**nnuut** · 12-02-2009, 01:48 AM

Originally Posted by fabijo

I've got no problem with the increase, either. It's an increase, isn't it?

It looks like people are ranting about the lack of locality increase, though.

http://www.govexec.com/story_page.cfm?articleid=44149

And the comments on the following article are full of complaints:

http://www.govexec.com/story_page.cfm?articleid=44143

The Pres just lost a whole pig belly full of votes on that wonderful decision. And who's getting 16 to 18% raise in locality pay. That's how much they owe us of the amount that was voted into law in 1991, they have been giving us .5% to 1% of what the owe us for 19 years, they make it look like something else!

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