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Obama is First President to Freeze Locality Pay

Obama is First President to Freeze Locality Pay

Alyssa Rosenberg | Government Executive

December 02, 2009

President Obama plans to freeze locality pay rates at 2009 levels for civilian federal employees in 2010, a move that has prompted protests from government employee groups.

In a letter sent to House Speaker Nancy Pelosi, D-Calif., and Vice President Joe Biden on Monday, Obama said federal employees nationwide would receive a 2 percent increase in their base pay in 2010, but he would not raise the rates of locality pay that federal employees receive based on where they live. An increase in locality pay rates combined with an increase in base pay traditionally makes up the total raise federal employees receive annually; Obama’s proposal would allocate the entire wage increase to employees’ base pay.

The president said given the economic hardships many Americans are facing, the public “would not understand or accept” higher raises for federal employees.

But National Treasury Employees Union President Colleen Kelley said civilian federal employees have received an increase in their rate of locality pay raise every year since locality payments began in 1994.

NTEU would prefer to see a higher raise with a portion of the pay increase allocated to locality pay, given the importance of that concept in fairly addressing the public-private pay gap,” Kelley said. “We are hopeful that Congress will act to overturn the president’s plan as it has many times in the past.”

Title V, the law governing federal pay and personnel policy, gives the president broad authority to set locality pay, which is intended to bring federal salaries in line with wages for comparable private sector jobs. In the first nine years after the 1990 Federal Employees Pay Comparability Act was enacted (it took effect in 1994), locality pay was supposed to increase by set percentages annually. But the president retained the authority to increase locality pay rates by a larger amount each year.

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