Special Message to the Congress on Increasing Federal Military and Civilian Pay Rates.

To the Congress of the United States:

America expects--and receives--much from her public servants.

In every field of endeavor vital to the security of this Nation from foreign affairs to science and technology to national defense-we depend on the career men and women of the Federal service for competence, devotion, loyalty, and responsibility.

I have been a part of this service for almost 35 years. I have seen it perform critical and vital tasks. Most of the time it has performed at its best--and that is the way we want it to stay.

I believe firmly that the merit system is the keystone of good government.

I believe that the public service is a profession of dignity, opportunity, and profound personal achievement.

I reject the proposition that government employment is somehow inferior to employment in business, in the professions, in university life, or in any other occupation. There can be no class system separating the men and women who are committed to the service of their fellow men or to the defense of their country.

I also believe strongly in the obligation of the Federal Government to be a good employer. And I define a good employer as one who

--demands excellence and rewards it --is fair and just

--respects the dignity of his employees

--insists upon ethical standards and sets a good example

--practices no discrimination

--welcomes fresh ideas and new approaches

--fulfills his responsibilities to the community

--provides opportunities for growth and challenge

--combines prudent business judgment with enlightened policies on compensation and benefits.

We do not have two standards of what makes a good employer in the United States: one standard for private enterprise and another for the Government. A double standard which puts the Government employee at a comparative disadvantage is short-sighted. In the long run, it costs more.

In all respects, save one, the Federal Government today is meeting the test of a good employer. In the last four years we have almost--but only almost--achieved adequate, up-to-date, and fair pay systems for all categories of Government personnel. We must not cease our effort now.

In my Budget Message on January 25, 1965, I announced the appointment of a Special Panel on Federal Salaries to review Federal military and civilian pay levels.

That Panel presented its report to me on April 15. It is attached to this Message. I have been studying it carefully.

The report contains a series of recommendations concerning adjustment of Federal pay in the fiscal year 1966.

I endorse the proposals of the Panel and recommend early action by the Congress to authorize:

--An average increase of 3 percent in Federal civilian salaries.

man average increase of 4.8 percent in compensation of all uniformed personnel, except enlisted personnel with under two years of service.

--A 2.7 percent increase in base pay of enlisted personnel with less than two years of service.

These proposed adjustments will restore the relationships between civilian and military pay established in 1963.

The adjustments will not bring us to full achievement of the comparability standard enunciated in the Federal Salary Reform Act of 1962, but they will prevent loss of ground already attained.

Before including the full effect in retirement plans, the proposed increases will have a total annual cost of approximately $853 million--$447 million for uniformed personnel and $406 million for civilian personnel. In order to hold the costs of pay adjustments in the fiscal year 1966 within amounts included in the Budget for that purpose, I recommend that the increases be made effective January 1, 1966.

Legislation to carry out these recommendations is attached. I ask that it be referred to the appropriate committees of the Congress for early consideration.

The pay adjustments proposed in this Message emphasize the obligation of the Federal Government to insist upon maximum return from every dollar spent on a salary.

All agencies of the executive branch are working hard to improve the productivity of their employees and to curtail outmoded activities. All agencies have established personnel control programs which should bring to a halt unwarranted increases in average grades and average salaries.

I am continuing my personal efforts to hold down employment. The most recent monthly report of the Civil Service Commission shows that there are now about 22,000 fewer civilian employees in the executive branch than in December 1963.

New employees must replace many who leave, but additional employment will occur only when our responsibilities permit no other course of action.

I am proud of the progress we have made toward lean and fit competence in the discharge of Federal responsibilities. Adequate pay will help us to continue our advance toward that goal.

The report of the Panel proposes new procedures for acting upon compensation matters in the future.

The first proposal would establish a permanent mechanism for impartial review at four-year intervals of the structure and interrelationships of all Government salary systems. Following these reviews, the President would be authorized to propose changes in salary schedules for top positions in the executive, legislative, and judicial branches. The changes would go into effect automatically at a given date, unless disapproved by resolution of either House of the Congress. Other changes proposed by the President as a result of a quadrennial review would be acted upon through the regular processes for the enactment of legislation.

The second proposal would authorize a procedure for acting, between quadrennial reviews, upon such periodic adjustments in pay rates for Federal civilian and military personnel as may be warranted to keep pace with changes in pay rates elsewhere in the economy. Under this proposal, the President would continue to make prescribed reports annually to the Congress. When any such annual report includes recommendations for revision of salary rates, these revisions would go into effect automatically at a given date, unless disapproved by resolution of either House of the Congress.

I concur in these recommendations of the Panel.

Legislation to establish the first of these new and improved procedures is attached.

Amendments of existing law to make the second recommendation effective are included in the bills authorizing pay adjustments for civilian and uniformed personnel.

The civilian pay bill also includes an amendment of the Federal Salary Reform Act of 1962 which would carry out another of the Panel's recommendations. This amendment would give the President discretionary authority to make salary surveys and comparisons in additional fields of non-Federal employment.

Existing law limits the annual surveys and comparisons to "private enterprise." Collection and analysis of salary rate information in such fields of employment as State and local governments and non-profit institutions would give added assurance that Federal salary rates are kept in appropriate relationship with salary rates prevailing throughout our economy.

Drafts of legislation to carry into effect other important recommendations contained in the Panel's report will be promptly transmitted to the Congress. These drafts will propose to:

--Authorize certain civilian employees not now receiving premium pay for overtime to receive such pay on an equal basis with other civilian employees.

--Establish a coordinated and equitable system for payment of moving expenses to employees transferred for the convenience and benefit of the Government.

--Authorize payment of readjustment allowances to certain employees separated involuntarily from Federal employment through no fault of their own.

The report of the Special Panel and this Message largely take the place this year of the president's annual report to the Congress, as required by the Federal Salary Reform Act of 1962. Nevertheless, the report and analysis of the Bureau of the Budget and the Civil Service Commission on the comparison of Federal and private enterprise salary levels, and the views of employee organizations, should be available to the Congress. I am transmitting them by separate communication.

With the enactment of the legislation recommended in this Message, we shall have taken still another series of steps in the most far-reaching revision of Federal compensation laws in the history of our country.

We shall be much nearer to full achievement of the comparability standard adopted by the Congress in 1962.

We shall have established for the first time sound procedures for maintaining interrelated salary systems for both civilian and military personnel, which will be based upon fair, clear, consistent, and up-to-date policies.

And we shall be in a far better position to attract and retain in Federal service the best talent in America.

I urge prompt consideration of these proposals. Their results will more than justify their costs.

LYNDON B. JOHNSON

The White House

May 12, 1965