Obama to Propose Half-Percent Pay Increase for Federal Employees

The Obama administration will reportedly propose a 0.5 percent pay increase for all civilian federal employees in its 2013 budget proposal — a modest cost of living increase but the first bump in pay for federal workers since President Barack Obama ordered a two-year freeze in late 2010.

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Such a proposal would require congressional approval, no mean task given the Republican stance on federal employee compensation. Republican lawmakers and presidential candidates alike have advocated extending the freeze on federal salaries for at least one more year in order to pare down spending.

However, the proposed pay increase is still well below the 3.6 percent cost of living adjustment that went into effect this week for Social Security and other benefits, keeping them in line with inflation. Private sector hourly earnings grew by about 2.1 percent in 2011, according to the Bureau of Labor Statistics.

The White House notified agency budget offices about its decision on Friday morning, according to two senior administration officials familiar with the plans, so that the agencies could complete their 2013 budget requests. The White House is expected to formally present its fiscal 2013 budget proposal in early February.

Though unauthorized to speak publicly on the matter, the officials added that the proposal, under the caps authorized by the budget control measures passed last year, would save the federal government about $28 billion over the next decade and $2 billion in fiscal 2013.

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