President Bush ordered Wednesday that federal workers living in more expensive regions of the country will get smaller pay raises than expected, citing what he called unacceptably high costs to the nation.
Current law provides that federal civilian workers will get a 2.5 percent across-the-board raise in January. That will not change under Bush's order.
The law also gives an extra pay bump to some federal employees based on a formula that incorporates cost of living and comparable private-sector pay. On average, workers who live in such metro areas were due to receive an additional raise of 12.5 percent. Bush is cutting that added bump to 0.5 percent.
That means that workers scheduled to receive pay differentials will now receive a total pay raise of 3 percent, not 15 percent, on average.
Bush said he was taking action because the scheduled pay raises would exceed his budget by $12.7 billion next year, and only compound in later years.
"Such cost increases would force deep cuts in discretionary spending or federal employment to stay within budget," Bush said in a letter to congressional leaders. "Either outcome would unacceptably interfere with our nation's ability to secure the homeland and pursue the war on terrorism."
The president has the power to put in place his own pay plan in times of a national emergency or serious economic conditions affecting the nation. Bush has invoked this authority before, as have other presidents over the years.