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[House Document 108-8]
[From the U.S. Government Publishing Office]

                                     

108th Congress, 1st Session - - - - - - - - - - - - - House Document 108-8

 
            AN ALTERNATIVE PLAN FOR LOCALITY PAY INCREASES

                               __________

                             COMMUNICATION

                                  from

                   THE PRESIDENT OF THE UNITED STATES

                              transmitting

  AN ALTERNATIVE PLAN FOR LOCALITY PAY INCREASES PAYABLE TO CIVILIAN 
FEDERAL EMPLOYEES COVERED BY THE GENERAL SCHEDULE PAY SYSTEM IN JANUARY 
                 2003, PURSUANT TO 5 U.S.C. 5305(a)(3)

 January  7, 2003.--Referred to the Committee on Government Reform and 
                         ordered to be printed
                                           The White House,
                                     Washington, November 27, 2002.
Hon. J. Dennis Hastert,
Speaker of the House of Representatives,
Washington, DC.
    Dear Mr. Speaker: I am transmitting an alternative plan for 
locality pay increases payable to civilian Federal employees 
covered by the General Schedule (GS) pay system in January 
2003.
    Under title 5, United States Code, civilian Federal 
employees covered by the GS pay system would receive a two-part 
pay increase in January 2003: (1) a 3.1 percent across-the-
board increase in scheduled GS rates of basic pay linked to the 
part of the Employment Cost Index (ECI) that deals with changes 
in the wages and salaries of private industry workers, and (2) 
a locality pay increase based on Bureau of Labor Statistics' 
salary surveys. For Federal employees covered by the locality 
pay system, the overall average pay increase would be about 
18.6 percent.
    For each part of the two-part pay increase, title 5, United 
States Code, authorizes me to implement an alternative pay plan 
if I view the adjustment that would otherwise take effect as 
inappropriate due to ``national emergency or serious economic 
conditions affecting the general welfare.'' For the reasons 
described below, I have determined that it would be appropriate 
to exercise my statutory alternative plan authority to limit 
the locality pay portion of the January 2003 GS pay increase.
    A national emergency has existed since September 11, 2001. 
Full statutory civilian pay increases in 2003 would interfere 
with our Nation's ability to pursue the war on terrorism. They 
would cost about $13.6 billion in 2003 alone--$11.2 billion 
more than the 2.6 percent overall Federal civilian pay increase 
I proposed in my 2003 Budget--and would build in later years. 
Such cost increases would threaten our efforts against 
terrorism or force deep cuts in discretionary spending or 
Federal employment to stay within Budget. Neither outcome is 
acceptable. Therefore, I have determined that a total pay 
increase of 3.1 percent would be appropriate for GS employees 
in January 2003.
    Because 5 U.S.C. 5303 already mandates an across-the-board 
GS pay increase of 3.1 percent in January 2003, GS locality-
based comparability payments under 5 U.S.C. 5304 must remain at 
current levels. While my Administration remains committed to 
the principle of adjusting civilian Federal pay rates in 
keeping with changes in local labor market rates, our national 
situation precludes granting larger pay increases to GS 
employees at this time.
    Accordingly, I have determined that:
          (1) Under the authority of section 5303(a) of title 
        5, United States Code, the pay rates for each statutory 
        pay system will be increased by 3.1 percent, effective 
        on the first day of the first applicable pay period 
        beginning on or after January 1, 2003; and
          (2) Under the authority of section 5304a of title 5, 
        United States Code, locality-based comparability 
        payments in the percentages set forth in the attached 
        table will remain in effect in 2003.
    Finally, the law requires that I include in this report an 
assessment of the impact of my decision on the Government's 
ability to recruit and retain well-qualified employees. I do 
not believe this decision will materially affect our ability to 
continue to attract and retain a quality Federal workforce. 
Inflation, as measured by the Consumer Price Index, is at 2.1 
percent, well below the 3.1 percent across-the-board pay 
increase already mandated by current law, and Federal quit 
rates are at an all-time low of 2.1 percent per year, well 
below the overall average quit rate in private enterprise. 
Should the need arise, the Government has many compensation 
tools, such as recruitment bonuses, retention allowances, and 
special salary rates, to maintain the high-quality workforce 
that serves our Nation so very well.
            Sincerely,
                                                    George W. Bush.
    Attachment.
      Locality-Based Comparability Payments Under Alternative Plan

                                                        Locality payment
        Locality Pay Area                                   (in percent)
Atlanta, GA.......................................................  9.74
Boston-Worcester-Lawrence, MA-NH-ME-CT............................ 13.57
Chicago-Gary-Kenosha, IL-IN-WI.................................... 14.58
Cincinnati-Hamilton, OH-KY-IN..................................... 12.09
Cleveland-Akron, OH............................................... 10.33
Columbus, OH...................................................... 10.70
Dallas-Fort Worth, TX............................................. 10.90
Dayton-Springfield, OH............................................  9.62
Denver-Boulder-Greeley, CO........................................ 13.34
Detroit-Ann Arbor-Flint, MI....................................... 14.71
Hartford, CT...................................................... 14.11
Houston-Galveston-Brazoria, TX.................................... 18.61
Huntsville, AL....................................................  9.08
Indianapolis, IN..................................................  8.85
Kansas City, MO-KS................................................  9.28
Los Angeles-Riverside-Orange County, CA........................... 16.05
Miami-Fort Lauderdale, FL......................................... 12.45
Milwaukee-Racine, WI.............................................. 10.05
Minneapolis-St. Paul, MN-WI....................................... 11.56
New York-N. New Jersey-Long Island, NY-NJ-CT-PA................... 15.23
Orlando, FL.......................................................  8.67
Philadelphia-Wilmington-Atlantic City, PA-NJ-DE-MD................ 12.11
Pittsburgh, PA....................................................  9.52
Portland-Salem, OR-WA............................................. 11.64
Richmond-Petersburg, VA...........................................  9.67
Sacramento-Yolo, CA............................................... 11.99
St. Louis, MO-IL..................................................  8.98
San Diego, CA..................................................... 12.70
San Francisco-Oakland-San Jose, CA................................ 19.04
Seattle-Tacoma-Bremerton, WA...................................... 11.77
Washington-Baltimore, DC-MD-VA-WV................................. 11.48
Rest of U.S.......................................................  8.64

                                
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