Obama Reduces Pay Increase for Federal Employees

Civilian federal employees won’t get as big a pay raise as expected next year, President Obama announced Monday.

In a letter to House Speaker Nancy Pelosi, Obama said he has decided — in light of the economic crisis — that civilian federal employees should receive a 2 percent pay increase starting Jan. 1, 2010, instead of the 2.4 percent across-the-board increase that was expected.

Combined with other local pay raises, the White House estimated the total cost to be $22.6 billion in fiscal year 2010 alone. Obama said such an increase is not appropriate.

“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,” Obama wrote. “The growth in federal requirements is straining the federal budget.”

U.S. Code grants the president the authority to submit an alternative pay plan if he “views the adjustments that would otherwise take effect as inappropriate due to ‘national emergency or serious economic conditions affecting the general welfare.'”

Obama said that if necessary, he will also provide an alternative plan for the locality pay rates by Nov. 30.

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