Letter to the Speaker of the House of Representatives and the President of the Senate Transmitting an Alternate Federal Civilian Pay Plan

Dear Mr. Speaker: (Dear Mr. President:)

Under the Federal Pay Comparability Act of 1970, the President is required to make a decision each year on what, if any, pay adjustment should be provided for Federal employees under the General Schedule and the related statutory pay systems.

My pay advisors have reported to me that an increase in pay rates averaging 28.62 percent, to be effective in October 1989, would be required under existing procedures to raise Federal pay rates to comparability with private sector pay rates for the same levels of work. However, the law also empowers me to prepare and transmit to the Congress an alternative plan for the pay adjustment if I consider such an alternative plan appropriate because of "national emergency or economic conditions affecting the general welfare."

The adverse budgetary and economic effects of a 28.62 percent pay raise clearly do not permit an increase of that magnitude. On the other hand, the Federal Government's continued ability to attract and retain qualified employees requires that the pay raise be greater than the 2 percent planning assumption in the Administration's FY 1990 budget request.

As a result of budget deliberations over the past few months, a general consensus has been reached, both within the Congress and between the Congress and the Administration, that the appropriate pay raise for Federal civilians in FY 1990 is 3.6 percent. The FY 1990 Bipartisan Budget Agreement of April 14, 1989, between the Administration and the leadership of the Congress assumed a Federal civilian employee pay raise of 3.6 percent, effective with the first full pay period in January 1990.

Further, the Treasury, Postal Service and General Government Appropriations Act, 1990 (H.R. 2989) that has passed both Houses of the Congress and is now awaiting conference action contains a 3.6 percent pay raise. H.R. 2989 would freeze pay for the highest levels of the Executive Schedule, covering the Government's most senior appointees, as well as for equivalent levels in the legislative and judicial branches. I have urged the Congress, in my proposed "Senior Executive Salary Act of 1989" and "Judicial Salary Act of 1989," to take the decisive action that is needed to resolve the Government's critical problem of pay at the senior levels.

Accordingly, upon consideration of the reports of my Pay Agent and the Advisory Committee on Federal Pay, and in recognition of the Bipartisan Budget Agreement and completed congressional action, I have determined that the FY 1990 Federal civilian pay raise will be made in accordance with the following alternative plan:

In accordance with section 5305(c)(1) of title 5, United States Code, the pay rates of the General Schedule and the related statutory pay schedules shall be increased by an overall percentage of 3.6 percent for each schedule, with such increase to become effective on the first day of the first applicable pay period beginning on or after January 1, 1990.

Accompanying this report and made a part hereof are the pay schedules that will result from this alternative plan, including, as required by section 5382(c) of title 5, United States Code, the rates of basic pay for the Senior Executive Service.

Sincerely,

George Bush