A 0.5 Percent Pay Boost in 2013?

Federal employees have been under a two-year freeze to annual across-the-board pay increases since last year, and the prospects for next year are not looking much brighter: President Obama is set to propose a 0.5 percent pay increase as part of his 2013 budget proposal, the Washington Post reports.

According to two senior administration officials familiar with the plans, Obama will propose the 0.5 percent pay increase for federal workers in his 2013 budget proposal, set to be released in February. The pay increase would be the first automatic, across-the-board pay increase for feds since Obama ordered a two-year pay freeze in late 2010.

Republicans on Capitol Hill have called for extending the two-year pay freeze for an additional year and even up to an additional three years. They also have proposed eliminating step increases, cutting the workforce by 10 percent through attrition and cutting some federal retirement benefits.

"A permanent pay freeze is not an acceptable policy," one senior administration official told the Post on Friday. "While modest, a 0.5 percent increase reflects the belt-tightening we must do in these difficult times."

The modest increase in federal pay would save about $28 billion over the next decade and $2 billion in fiscal 2013 under the caps authorized by budget control measures passed last summer, officials said.

Federal employees would still be eligible for other pay increases, such as those for longevity, performance and promotions, as has been the case during the current two-year federal pay freeze.

What are your thoughts on the proposed 0.5 percent pay increase for 2013?