White House floats 1% pay raise for civilian feds in 2021 budget

The White House is proposing a 1% raise for federal employees in the 2021 budget while also increasing retirement contribution requirements.

The budget proposal also offers to "[increase] funds available for on-the-spot and ratings-based performance awards."

The rationale for providing a lower pay raise this year, according to the budget proposal, was "to make pay more flexible and performance-based, since across-the-board pay increases have long-term fixed costs and fail to address existing pay disparities or to target mission-critical recruitment and retention goals."

Military personnel would receive a 3% base pay increase as well as added funding for programs aimed at financially supporting service members and their families.

The Trump administration's plans for a 1% raise run counter to Congressional and union hopes for as much as 3.5% for federal workers. In January, Rep. Gerry Connolly (D-Va.) introduced a bill that would increase rates for federal workers and address discrepancies between salaried and hourly waged employees.

The American Federation of Government Employees National Secretary-Treasurer Everett Kelley told reporters at a Feb. 10 press briefing that the union was working with allies in Congress to make a higher pay raise reality.

"Certainly, it's not unlike this administration to propose anywhere from zero to 100. We are praying and we are hoping that Congress will be successful working with our members to get a 3.5% pay raise," Kelley said.

In addition, the budget proposal suggested eliminating cost-of-living adjustments for federal retirees and slashing it by 0.5% for civil service retirees while increasing the amount federal workers are expected to pay into their retirement and disability funds as part of a bid to bring total compensation federal retirement systems "more in line with labor markets."

Tony Reardon, national president of the National Treasury Employees Union, said the 1% raise is "meaningless" if feds "are forced to simultaneously shave money off their paychecks for higher retirement contributions."

The budget proposal also resurrected the possibility of a merger between the Office of Personnel Management and the General Services Administration despite a provision in last year's defense reauthorization bill that explicitly forbade any such consolidation without a vigorous independent cost-benefit analysis being performed first.

The workforce section of the budget also envisions the federal civilian workforce declining by about 30,000 in fiscal year 2021, from 2.2 million to about 2.17 million.