Citing a state of national emergency brought on by last year's terrorist attacks, President Bush on Friday slashed the pay raises most civilian federal workers were to receive starting in January.
Under a law passed in 1990, federal employees covered by the government's general schedule pay system would receive a two-part pay increase with the new year, a 3.1 percent across-the-board increase plus a pay hike based on private-sector wage changes in the areas where they work.
This law outlining federal pay kicks in because Congress has not yet passed the appropriations legislation directing a specific increase, said Amy Call, a spokeswoman for the White House's Office of Management and Budget.
The White House couldn't say exactly how many federal employees the change would impact, but said it would be almost all.
Bush's pay decision is yet another blow to federal workers, many of whom are facing big changes in job descriptions under the Bush administration.
Earlier this month, the administration announced it wants to let private companies compete for up to half of the 1.8 million federal jobs. Also, in the new Homeland Security Department, Bush won the broad powers he sought to hire, fire and move workers in the 22 agencies that will be merged.
In a letter sent Friday to congressional leaders, Bush announced he was using his authority to change workers' pay structure in times of national emergency or "serious economic conditions" and limiting raises to the 3.1 percent across-the-board boost. Military personnel will receive a 4.1 percent increase.
That means that the additional so-called locality-based payments would remain at current levels because "our national situation precludes granting larger pay increases ... at this time," Bush said.
The White House quietly released the letter to journalists via e-mail late on Friday, the middle of a long holiday weekend when most Americans were apt to be paying little attention.
Officials of unions representing federal workers could not immediately be reached Friday night for comment.
Call said the locality-based payments have rarely gone into effect since their creation in 1990, either because former President Clinton limited them or Congress prescribed other salary increases.
"The whole locality-based adjustment ... for the most part doesn't go into effect," Call said.
The White House estimated that the overall average locality-based pay increase would amount to about 18.6 percent. Bush said granting the full raises would cost about $13.6 billion in 2003, or $11.2 billion more than he proposed for the year — a cost the nation can't bear as it continues to battle the war against terror.
"A national emergency has existed since September 11, 2001," Bush wrote. "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."
The president noted that the raises still amount to more than the current inflation rate of 2.1 percent.
"I do not believe this decision will materially affect our ability to continue to attract and retain a quality federal workforce," he said.