Legislators seeking out funds to fatten pay raise


WASHINGTON -- The goal is $1.9 billion.

That's how much money some lawmakers are struggling to find to fatten a pay raise slated for federal workers.

Just where those dollars will be found is a mystery to many on Capitol Hill, but in recent days lawmakers have stepped up the search for the funds.

Maryland Rep. Steny Hoyer, D-5th, who chairs a House appropriations subcommittee on general government, is meeting this week with Leon Panetta, director of the Office of Management and Budget, and House Appropriations Chairman David Obey, D-Wis., to find ways to come up with money for the pay raise.

"All three are working diligently to come up with some sort of funding mechanism," says Mr. Hoyer's spokesman, Jesse Jacobs. "If they can't do that, they'll have to try to reach some type of accommodation for federal workers."

In President Clinton's budget proposal, $1.1 billion is allocated for a pay raise for federal workers.

That money can be used for a 1.6 percent pay raise or a partial pay raise plus locality pay. The pay raise is designed to reflect national changes in the cost of labor, and locality pay is aimed at gradually closing the gap between federal and private-sector wages.

Under law, federal worker salaries should increase 2.6 percent next year. Mr. Clinton would have had to allocate $3 billion to fully fund that raise, according to the Congressional Budget Office. The difference between what the workers hoped for -- and what they got from the president -- is the $1.9 billion.

The search for the money is snarling some legislative business. The House Appropriations Committee this week postponed a full committee hearing, originally scheduled for tomorrow, aimed at funding next year's pay raise.

"Right now, I don't think anyone knows what the solutions are," says James Hegarty of the Federal Government Service Task Force, a congressional group that develops and coordinates legislation dealing with federal workers. He says the hearing was delayed to give lawmakers more time to deal with funding the pay raise.

"The pay raise is creating a conflict, and people have yet to figure out how to handle it," Mr. Hegarty says.

Appropriations is not expected to take up the pay raise issue until after lawmakers return from the week-long Memorial Day recess.

Lawmakers made at least a written commitment to the pay raise last week, when an Appropriations subcommittee recommended full pay raises for workers. The only problem: The panel did not say where the money will be found.

"The rationale for including the raises, even though there's no money, is just to get a foothold so that somewhere along the way members can pick up the money," Mr. Hegarty says.

If the bill is approved as written, agencies would be forced to make good on the raises by carving money out of their current budgets. But many lawmakers say squeezing the agencies, whose coffers are already tight, is counterproductive.

Another possibility is implementing more reductions-in-force, or RIFs. Mr. Hoyer was quick to denounce that proposal last week.

"Raises for RIFs is not a good trade-off. . . . " he said.

Del. Eleanor Holmes Norton, D-D.C., is pushing her own pay-raise proposal. She wants to cut $1.9 billion in agency funds for service contracts and make that money available for pay raises.

"The basis for my legislation is simple -- to eliminate discrimination between civil servants and contract employees, both of whom are paid out of the same federal funds," she said .

To further her effort, Ms. Norton plans to introduce today a series of measures to curb federal government spending on service contracts.

The bills' aims are threefold -- to require agencies to ensure that contracting out work costs less than doing it in-house; to prohibit agencies from contracting out work previously performed by the recipient of a buyout; and to initiate a new system to measure the size of the service contractor work force.

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