Biden proposes giving federal employees a 2.7 percent raise next year

By Eric Yoder,

President Biden used his budgetary proposal released Friday to reinforce how his approach to the federal workforce differs from that of his predecessor, calling for a 2.7 percent raise that would go into effect January 2022, exceeding any raise proposed by President Donald Trump.

The budget also would allow for increased staffing at a number of agencies including the Veterans Affairs, Labor and Energy departments. While federal employment grew by about 3 percent overall during the Trump administration, growth at a few large departments masked cuts elsewhere, some of them deep.

“After decades of under-investment in a modern-day workforce, a failure to partner with labor unions, and ongoing, unwarranted attacks on its independence, the civil service is in need of repair and rebuilding and the Administration has already taken swift action to deliver on that goal,” a budget document released Friday by the White House said.

“The Administration is committed to empowering, rebuilding, and protecting the Federal workforce, which is why the Budget provides for a 2.7 percent pay increase for the Federal civilian workforce,” it added. That is the same figure being recommended for military personnel.

The raise is part of a proposed $6 trillion budget that the administration must now negotiate with Congress — a process that typically does not conclude until late in the year, when funding for federal agencies is finalized, with increases taking effect with the first full pay period of the new year.

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Several federal employee unions have been calling for a 3.2 percent boost.

“While we are supportive that the long tradition of military-civilian pay raise parity has been honored in the president’s proposal, 2.7% is simply not nearly enough to compensate for the losses in buying power of federal wages and salaries over the past decade,” American Federation of Government Employees president Everett Kelley said in a statement.

Some congressional Democrats have also endorsed that figure in bills.

One of the sponsors, Rep. Gerald E. Connolly (D-Va.), said the higher amount is needed “if we are going to recruit the next generation of public servants and be competitive with the private sector.” Connolly chairs the House Oversight subcommittee on government operations.

The White House noted Friday that in his early days in office, Biden revoked a series of 2018 Trump administration executive orders that restricted the role of unions in the federal workplace and limited employee protections in disciplinary matters to the minimum required by law.

Biden also erased a 2020 order that could have effectively removed standard civil service protections from potentially tens of thousands of employees involved with policy matters and another that effectively suspended diversity and inclusiveness training programs pending a review of their content.

“After four years of an Administration that treated our civil servants as their enemies, I’m glad to see the Biden Administration commit to investing in our workforce, including recognizing their dedicated service with a cost of living adjustment. This increase is crucial to building and maintaining a highly-skilled and experienced federal workforce to best serve the American people,” Sen. Chris Van Hollen (D-Md.) said in a statement.

Notable by their absence from the Biden budget are proposals regarding retirement, health insurance and other benefits the government provides to its workers.

Trump’s budgets had annually called for requiring most employees to pay more toward their future benefits; using a less-generous formula for determining annuity benefits of future retirees; and limiting inflation adjustments for retiree benefits, among other proposals. However, changes in law would have been needed to carry them out and Congress did not agree to them.

Similarly, although Trump several times had proposed freezing federal salary rates, federal employees received an annual raise since 2018 ranging from 1 percent to 3.1 percent. A 1 percent boost was paid early this year after Trump made a last-minute bid for a freeze despite initially proposing that amount.

“For the first time in four years, federal employees can read the president’s budget proposal and feel hopeful about the future,” National Treasury Employees Union president Tony Reardon said in a statement. “There are no devastating cuts to their retirement benefits, insulting commentary about their role in government or dramatic reductions in agency staffing or funding.”

Federal raises typically are divided into two parts: one paid across the board and the other a “locality” component that differs among some four dozen city areas and a flat rate for other locations. Employees working in the sprawling Washington-Baltimore locality typically receive one of the larger increases.

The raise would not apply to the 600,000-plus employees of the U.S. Postal Service, where raises are set in labor-management bargaining.

It also would not apply to federal retirees. Most draw benefits under an older system paying the same cost-of-living adjustment each January that is paid under Social Security regardless of age. Those under the current system generally don’t receive inflation boosts until reaching age 62 and the increases are limited if the Social Security figure is above 2 percent.

In its budget, the White House proposes increasing the federal workforce by about 50,000 positions in the fiscal year that starts in October, on top of nearly 2.2 million current employees, excluding the Postal Service.

In raw numbers, the greatest growth would be at the Department of Veterans Affairs, which would increase by 19,000 to 425,000. That department has been one of the fastest-growing for years, up from 376,000 in 2019, for example.

Among larger agencies, growth would be greatest on a percentage basis at the departments of Labor, Housing and Urban Development, Energy and Treasury — which includes the Internal Revenue Service. The largest decrease would be at the Commerce Department as it winds down temporary hiring related to the 2020 Census.