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Obama proposes 'modest' federal pay raise

The White House has proposed a modest half-percent pay raise for civilian federal employees beginning next year — a move that would affect thousands of Maryland workers.

If the across-the-board raise is approved by Congress, it would end a two-year-old salary freeze imposed as part of belt-tightening in Washington. The proposal comes at a time when congressional Republicans have sought to extend the freeze for at least another year.

But several Maryland lawmakers and unions representing employees noted that the proposed increase is far less than inflation and doesn't cover recent increases in health care premiums deducted from paychecks.

"They are already operating under a pay freeze, they are already facing deep cuts at their agencies, and they have been targeted all year by Republican plans to extend their pay freeze or pass backdoor pay and benefit cuts," said Sen. Barbara A. Mikulski, who said she would review the White House plan before deciding whether to support it.

Employees "should be paid at a rate that keeps their salaries in line with inflation."

Maryland is home to 286,810 federal workers. Social Security, the National Institutes of Health, and the National Security Agency are among the many agencies based in the state. Maryland's economy is hitched so closely to the federal government that credit agencies threatened to downgrade the state's bond rating in 2011 when it appeared Congress might fail to raise the nation's debt ceiling.

The freeze has been difficult for many to swallow, the employees have said.

"For federal workers who are in the mid- to lower-pay ranges, the freeze has been hard," said Donna Keck, who lives in Charles Village and has worked for the U.S. Department of Housing and Urban Development since 1998.

But Keck said the freeze has not presented a major burden for her own budget: "I personally have been happy to sacrifice along with the rest of the American people who have had economic problems."

Even though the raise falls below the 2 percent average increase in earnings experienced last year in the private sector, federal employee unions may have a difficult time lobbying for more. Compensation for the federal workforce has become a political flash point and a target in recent deficit reduction efforts.

Last month, House Republicans unveiled a bill that would have extended an expiring payroll tax cut for all American workers in part by continuing the pay freeze on federal workers for another year. Federal compensation also was a target of a bipartisan deficit reduction panel appointed by President Barack Obama in 2010.

And some have noted that many federal employees continue to receive periodic step increases in salary for length of service and promotions — even during the current freeze.

"President Obama is proposing to lift a federal pay freeze he never implemented in the first place," said Stephen Miller, spokesman for Alabama Sen. Jeff Sessions, the top Republican on the Senate Budget Committee.

Rep. Dennis A. Ross, a Florida Republican who chairs the House Subcommittee on Federal Workforce, U.S. Postal Service and Labor Policy called the White House announcement "pure politics as the president needs the people who benefit under his economic policies, namely, government unions."

Sen. Ben Cardin, a Maryland Democrat, noted that the proposal did not keep workforce pay at pace with inflation but called the increase a "welcome acknowledgment that federal employees have made sufficient sacrifices to help solve our nation's fiscal problems."

Democrats have pegged the savings from the pay freeze at $60 billion.

The 0.5 percent raise proposed by the White House received a tepid response from Southern Maryland Rep. Steny Hoyer, the second-highest ranking Democrat in the House, who noted that the number is below a 1.2 percent base pay increase that would take effect if Congress did not act at all.

"While this modest increase is a positive step toward recognizing the contribution these hard-working men and women make in service to this nation, it must be pointed out that federal civilian employees have been experiencing the effects of a two-year pay freeze," Hoyer said in a statement, adding that he will "consider" the proposal.

Roscoe G. Bartlett, a Maryland Republican whose newly redrawn 6th District includes a large chunk of Montgomery County — where many federal workers live — could not be reached for comment.

The proposed raise will be included as part of Obama's 2013 fiscal year budget and would begin next January.

Officials at several unions that represent federal workers, including those in Maryland, said they appreciated that the administration was looking for a way to end the freeze, but said they are concerned that the raise could get even smaller as the two parties hash out a budget for next year.

American Federation of Government Employees National President John Gage, in a statement, called the half-percentage point increase "minuscule."

"The good news is that the pay freeze is ending, but I am disappointed at the size of the proposed… increase," said National Treasury Employees Union President Colleen M. Kelley. "I believe something more reflective of private sector increases would have been more fair and appropriate"

john.fritze@baltsun.com

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