2%

[James48843]

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]

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

[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...

[nnuut]

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!:cool:

[Buster]

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]

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

[Buster]

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....:rolleyes::D

http://1heckofaguy.com/wp-content/sign.jpg

[fabijo]

Also, no locality pay increase:

http://www.google.com/hostednews/ap/article/ALeqM5jaEmYeFNAnqHzqnEJVNP1QXYFkzgD9CA8FL83

[phil]

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]

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

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]

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:nuts:

[nnuut]

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

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!:cool:

[Boghie]

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!:cool:

Sure hope the folks out there who are not Government employees did not hear 'The One' yakking about an 18% pay increase.

It would be Gun Buyin' Time

Hittin' the Range

What an ignit...

[Handballer]

"The 2010 National Defense Authorization Act included a 3.4 percent military raise (http://www.govexec.com/story_page.cfm?filepath=/dailyfed/1009/102209ar2.htm), 0.5 percent higher than the 2.9 percent raise Obama requested for service members in his initial budget. Obama signed the Defense policy bill in October."

The miitary members should get a raise of 3.4%. They deserve that and much more. They have a much heavier load than us civilians.

[Aviator_Guy]

"The 2010 National Defense Authorization Act included a 3.4 percent military raise (http://www.govexec.com/story_page.cfm?filepath=/dailyfed/1009/102209ar2.htm), 0.5 percent higher than the 2.9 percent raise Obama requested for service members in his initial budget. Obama signed the Defense policy bill in October."

The miitary members should get a raise of 3.4%. They deserve that and much more. They have a much heavier load than us civilians.

I agree, and they should also get the 5% matching funds on their TSP!!:cool::cool:

[Aviator_Guy]

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

That's not good news!!! Can you PM me with your weblink to confirm? Thanks Man!!:cool::cool:

[fabijo]

That's not good news!!! Can you PM me with your weblink to confirm? Thanks Man!!:cool::cool:

Back in August that was a possibility, but it looks like they are keeping the limit at $16,500 for 2010 instead of lowering it. I'm trying to find an official IRS document of this, but here are two articles. One is from August and the other is October:

August

In 2010 IRS could cut 401(k) contribution limit to $16,000

The IRS will announce 2010 contribution limits for 401(k) plans in October, based on a formula tied to the inflation rate in the third quarter vs. the year-ago quarter. For 2009, most workers can contribute up to $16,500 to their 401(k) plans, plus an additional $5,500 if they're 50 or older.

Unless inflation picks up in August and September, the IRS could be forced to reduce the cutoff to $16,000 in 2010, according to an analysis by Mercer, a human resources consultant. The threshold for catch-up contributions could be reduced to $5,000. This would mark the first time the IRS has reduced 401(k) contribution limits.
source: http://www.usatoday.com/money/perfi/retirement/2009-08-26-401k-contribution-limits-irs_N.htm

October:

401(k) maximum contributions to stay the same in 2010

Some analysts had expressed concern that the IRS would be required to reduce the maximum that workers can contribute to 401(k) plans. But the Treasury Department concluded that the relevant law doesn't require a reduction in limits for 2010, even though there was negative inflation, says J. Mark Iwry, senior adviser to Treasury Secretary Timothy Geithner.

As a result, the maximum amount workers can contribute to their 401(k) plans next year will remain at $16,500. Catch-up contributions for workers 50 and older will remain at $5,500.
source: http://www.usatoday.com/money/perfi/retirement/2009-10-15-401k-contribution-limits_N.htm

Again, these are just news articles. I haven't found the official documents of this, but USA Today is probably looking at the right source.

[FAB1]

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.

Buster you change your avatar an awful lot, dontcha? Wasnt it a "Spartanesquehotguy" just a scant mintue ago...or am I seeing things?? :p

[fabijo]

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!:cool:

I know, really. Every year, the Federal Salary Council has been giving recommendations, but they're never listened to. That's the pay gap that is spoken about. Here's their page of recommendations each year:

http://www.opm.gov/oca/fsc/

According to their recommendations for locality pay, in 2010 the locality pay for the rest of the u.s. would be 28.88% !!! And for me in New York City, it would be 51.33% . :nuts: Wahoo!!

[fabijo]

Lawmakers back 2 percent raise, but nix locality pay freeze


House-Senate negotiators on Tuesday night backed President Obama's request to give civilian federal employees a 2 percent pay raise in 2010, but rejected his proposal to freeze locality pay.

Conferees announced the omnibus spending package would include a 2 percent average pay hike for civilians in 2010. They allotted 1.5 percent of the overall figure to an increase in base pay, and 0.5 percent to a boost in locality pay.
http://www.govexec.com/story_page.cfm?articleid=44201

[fabijo]

Here's the quote from the section of the bill that congress is voting on in the next week on our pay. It says a 1.5 percent increase in general pay, plus an average .5 percent increase in locality. I still don't know where to find how the locality increase will be distributed. I'm assuming that if it is an average of .5 percent, some people will get less than .5 and others will get more than .5.


7 SEC. 744. (a) The adjustment in rates of basic pay for employees under the statutory pay systems that takes effect in fiscal year 2010 under section 5303 of title 5, United States Code, shall be an increase of 1.5 percent, and the overall average percentage of the adjustments taking effect in such fiscal year under sections 5304-5304a of such title 5 shall be an increase of 0.5 percent (with comparability payments to be determined and allocated among pay localities by the President). Adjustments under the preceding sentence shall also apply to civilian employees in the Department of Homeland Security and in the Department of Defense. All adjustments under this subsection shall be effective as of the first day of the first applicable pay period beginning on or after January 1, 2010.

It's on page 175 of this pdf:

http://docs.house.gov/rules/omni2010/hr3288cr_divc_txt.pdf

Got the link from this page:
http://www.rules.house.gov/bills_details.aspx?NewsID=4520

[Boghie]

For those who thought gubmint salaries are always inflation adjusted up!!!

Vermont State Employees Union Votes for 3% Pay Cut (http://globaleconomicanalysis.blogspot.com/2009/12/vermont-state-employees-union-votes-for.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnaly sis+%28Mish%27s+Global+Economic+Trend+Analysis%29)

We are in a period of deflation.

And, now that we have shot all our bullets...

We have exasperated the problem by attempting to re-inflate via borrowing. That can be a short term stimulus. But, this is a long term retrenchment. All we accomplished was a short term amelioration of deflation matched with a requirement to pay back $879 Billion in principal plus interest. We should have allowed the FED to manage the money supply. They can call back the helicopters, the government cannot call back the debt other than by paying it. And, soon enough the FED will move to strengthen the dollar – their official reason for being. That will occur in a time of high government debt and high inflation. Conversely, the general public will have reduced their debt and learned to deal with less.

What do you think the general public will demand from the government?