Biden proposes a 4.6% raise for federal workers for 2023

President Biden called for federal workers to receive their largest annual pay raise in 20 years Monday, releasing a budget proposal that would grant civilian employees an average pay increase of 4.6%.

The figure is nearly double the 2.7% average pay increase federal employees received in 2022 and a significant improvement over the 1.0% across-the-board pay increase they saw in 2021. Budget documents released by the White House do not specify how the figure will be split between across-the-board increases in basic pay and average boosts to locality pay, although traditionally 0.5% of the overall figure has been set aside for locality pay. Military service members also would receive a 4.6% pay increase as part of Biden's fiscal 2023 budget proposal.

In budget documents, the White House said that the pay raise is part of a larger effort to improve the effectiveness and equity of the federal government, arguing that ensuring that all federal jobs are “good jobs” empowers employees to do their best work.

“These efforts will help agencies retain qualified employees, empower workers to make their agencies better, create a pipeline of qualified leaders, and provide better services to the public,” the White House wrote. “The budget supports these objectives by ensuring that all those in federal jobs earn at least $15 per hour and providing a pay increase of 4.6% for civilian and military personnel.”

For years, federal employee groups had to fight tooth and nail for sizeable pay raises, as the Trump administration’s budgets pushed for pay freezes and cuts to non-salary benefits, while agencies underwent sequestration in the Obama administration. Biden’s fiscal 2023 budget includes no major proposals related to federal workers’ health care or retirement benefits.

The pay raise figure comes following months of high inflation across the American economy. The last time feds saw a pay raise of this size was in 2002, when the George W. Bush administration provided them the same level of increase.

Despite that, Biden’s plan is not the most generous proposal on federal employee pay this year. Earlier this year, Rep. Gerry Connolly, D-Va., and Sen. Brian Schatz, D-Hawaii, introduced legislation that would provide federal workers an average 5.1% pay raise in 2023. That plan would be split between a 4.1% across-the-board pay increase and a 1% average increase in locality pay.