Bush Sets Up Civil Service Incentive Pay

President Bush, intent on breaking with the current seniority system, will initiate an incentive pay plan where high-performing and specially skilled federal workers are eligible for raises.

"Most Americans recognize that the current pay system for the federal work force is broken," said Kay Coles James, director of the Office of Personnel Management, in outlining the new plan. Rewarding performance "is extraordinarily good news for the hardworking federal employee."

Rep. Steny Hoyer of Maryland, the House's second-ranked Democrat, said the plan was "totally unacceptable" and would face strong opposition in Congress.

James and Mark Everson, deputy director of the Office of Management and Budget, told reporters that Bush, in his proposal for the 2004 budget year coming out next month, will ask for a 2 percent pay raise for all 1.8 million civilian federal workers.

On top of that, they said, he will ask Congress to approve $500 million for a "human capital performance fund," to be prorated to government agencies, to boost the base pay of the best workers.

The president's plan also would try to make federal workplaces more competitive with the private sector by raising the pay cap for the 7,000 high-level officials of the Senior Executive Service from the current $142,500 to $154,700. Pay grades within that service, which now start at about $100,000, would be eliminated.

After a $4,000 raise this year, senators and representatives earn $154,700 a year.

Everson, nominated by Bush as the next commissioner of the Internal Revenue Service, said Bush is determined to make the federal work force more accountable. "The federal pay system has been in a time warp for over 50 years," he said. "The president is committed to fixing it."

Under the proposal, James' OPM would oversee plans submitted by the agencies on how they will reward high-performing or critical workers. James said agencies would not be allowed to use their shares of the fund for across-the-board raises. "That's demoralizing to the federal employees," she said.

The government spent about $100 billion this year for federal workers' salaries.

Bobby Harnage Sr., president of the American Federation of Government Employees, said his group, the largest federal employees union, would oppose the plan strongly.

"In order to give one employee a little more money, you must take it away from others," he said. Harnage recommended that Bush offer a 2.7 percent raise to everyone instead of a 2 percent raise with a "slush fund" for chosen workers.

Hoyer agreed. He said he was not against enhancement pay but saw the Bush plan as a ruse for underpaying federal workers and ignoring directives on civil servant pay keeping pace with private sector and military pay.

Rep. Tom Davis, R-Va., the new chairman of the House Government Reform Committee, thinks the Bush plan is dynamite, said his spokesman, David Marin. Davis, whose northern Virginia district includes many federal workers, "is intent on creating a culture of achievement in the civil service" and believes the president's proposal "is a significant step in the right direction," Marin said.

Federal pay also was an issue in the 2003 budget, in which Bush broke with the normal custom of giving military personnel and civilian employees similar raises.

The military is getting a 4.1 percent raise in basic pay, but Bush, citing the national emergency created by the war on terrorism, held the civilian pay increase last November to 3.1 percent.

The Senate, in its passage Thursday of a spending package for the fiscal year that began last October, approved the 4.1 percent raise for civilians but said agencies would have to pay for the increased costs from their own budgets.