FOR IMMEDIATE RELEASE August 28, 2003

CONTACT: Stacey Farnen 202-225-3130

HOYER VOWS VICTORY IN FIGHT FOR FAIR FEDERAL EMPLOYEE PAY

President Pushes for Lower Pay Adjustment Days before Labor Day

WASHINGTON – House Democratic Whip Steny Hoyer (MD) released the following statement today in response to a letter from President Bush to Speaker Dennis Hastert announcing his decision to invoke a national emergency to avoid implementing the federal employee pay adjustment provided for in the Federal Employee Pay Comparability Act.  The President continued to advocate a 2 percent pay raise and a $500 million Human Capital Performance Fund as he proposed in his 2004 budget earlier this year.

In July, the full House Appropriations Committee adopted the Hoyer-Wolf-Moran amendment to the Fiscal Year 2004 Transportation Treasury Appropriations Bill to provide a 4.1% pay adjustment for federal civilian employees, including blue collar employees, providing them with pay parity with military employees.

 “President Bush continued to demonstrate a lack of appreciation for federal employees in his letter released yesterday, just days before Labor Day, the day that honors all American workers.  His decision to invoke a national emergency to provide an inadequate pay raise for the very men and women who are confronting that emergency on a daily basis smacks of indifference, or at least a failure to understand the role federal employees play in keeping America safe.

 “The President’s action is made worse by his willingness at the same time to provide political appointees with bonuses and his relentless pursuit of trillions of dollars of tax breaks that mainly benefit the wealthiest Americans, not the middle-class.  If the Administration is unable to fairly compensate career federal employees who work just as hard, it should not award bonuses to its political appointees.  And, the Administration should not ask federal employees to give up $1.6 billion in pay to help pay for the war while providing $85 billion in tax cuts in 2003 alone for those making over $200,000.

 “It is important to keep this issue in perspective.  The 4.1 percent pay adjustment that I have been advocating for federal employees with many of my colleagues in Congress would cost an additional $1.6 billion over the president’s proposal.  In comparison, the federal government spends $1.6 billion in just twelve days in Iraq.

 “The Administration appears to believe federal employees are an easy target.  But I urge the President to remember that the workers he is shortchanging are the scientists at the CDC who are working to protect Americans against a biological terrorist attack, the men and women of the CIA who are risking their lives around the world in the fight against terrorism, and the Customs officers who guard our borders.  These are not faceless clerks pushing paper in the bowels of government bureaucracy.

 “I will continue my fight on Capitol Hill to provide a fair pay adjustment for federal employees when Congress returns next week.”
 
 
The Federal Employee Pay Comparability Act (FEPCA) of 1991 provides for annual pay adjustments for federal employees of base annual pay and locality pay.  Under FEPCA, the base annual pay adjustment is based on Employment Cost Index (ECI), which measures change in private sector wages and salaries. The ECI showed that the annual across-the-board increase would be 2.7% in January 2004 and would cost approximately $2.7 billion.
 
Under FEPCA, the locality payment adjustment is calculated by the Bureau of Labor Statistics through a National Compensation Survey that reviews 32 regions nationwide. The NCS showed that the locality adjustment, overall, should be 15.1% starting in January 2004 and would cost approximately $12.5 billion.
 
Under FEPCA, the president is required to present an alternative pay plan before September 1 if he disagrees with the FEPCA base pay formulation.  President Bush did this on August 28 when he announced the base annual pay adjustment would be only 1.5%, not the ECI recommended 2.7% -- a 1.2% reduction.  Further, the president proposed a 0.5% locality pay adjustment, which will cost $500 million. Finally, he proposed yet again the controversial $500 million “Human Capital Performance Fund”, which was granted only $2.5 million in the House 2004 Transportation Treasury Appropriations Bill passed by the full Appropriations Committee in July.
 
The decision President Bush announced yesterday, while not without precedent, is highly unusual. Since FEPCA became law, the ECI recommended adjustment has been rejected only in August 1993, August 1995, August 1995, August 1997, and August 2003.

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