Federal Pay Status of January 2004 Adjustments: A Fact Sheet
CRS Report for Congress
Federal Pay – Status of January 2004
Adjustments: A Fact Sheet
Sharon S. Gressle
Specialist in American National Government
Government and Finance Division
Summary
Federal pay adjustment rates going into effect in January 2004, under Executive
Order 13322 (69 Federal Register 231) were less than those in the pending Consolidated
Appropriations Act, 2004 (H.R. 2673). The General Schedule (GS) and related salary
systems were limited to 2.0%, as opposed to the 4.1% subsequently passed. Salaries of
officials in the three branches were temporarily limited, due to the lower GS rate, to
will go into effect retroactively.
Status of General Schedule Pay Adjustment1
!Under 5 U.S.C. 5303, General Schedule basic salaries, and those of other
related statutory systems, are to be adjusted the first pay period beginning
on or after January 1 of each year (January 11, 2004). The adjustments
are determined by the change in the private sector element of the
Employment Cost Index (ECI) from September to September. The
percentage of change, minus 0.5%, becomes the scheduled rate of
adjustment. For January 2004, the rate of adjustment was scheduled at
2.7%. Locality-based payments are determined separately, based on
wage survey data from 32 geographic areas.
!Under 5 U.S.C. 5303 and 5 U.S.C. 5304, President George W. Bush sent
forward an alternative plan in August 2003 that called for a 1.5%
increase in General Schedule, and related systems, basic pay and an
average of 0.5% in locality-based payments for January 2004.
!Barring any action by Congress to establish a different rate or effective
date, the President’s alternative plan will govern.
1 For a more detailed discussion of both basic pay and locality-based payments, see CRS Report
RL31823, Federal White-Collar Pay: FY2004 Salary Adjustments, by Barbara L. Schwemle.
Congressional Research Service ˜ The Library of Congress
!Both the House and Senate voted to establish a 4.1% pay adjustment,
effective January 2004.2
!With passage of the 4.1%, the basic pay adjustment will be the scheduled
ECI adjustment of 2.7% and the locality pay adjustment will average
Status of Pay Adjustments of Officials3
!Under Section 704, P.L. 101-194, the Ethics Reform Act of 1989,
salaries of Members and officers of Congress, federal judges, and
executive branch officials on the Executive Schedule (collectively
referred to herein as “officials”) are to be adjusted annually based on
December-to-December percentage changes in the private sector element
of the ECI, effective in the same month as the GS adjustments.
!The scheduled January 2004 pay adjustment, based on the ECI, is 2.2%.
!Section 704, as amended, stipulates that officials’ pay adjustments cannot
exceed the rate of adjustment for GS basic pay.
!P.L. 108-167, as required under Section 140, P.L. 97-92, permits the
judges to receive the annual adjustment.
Effect of Delayed Passage
!GS pay adjustment in January 2004, pending presidential approval of the
FY2004 Consolidated Appropriations Act, is limited to 1.5% for basic
pay and an average of 0.5% for locality. The net adjustment for the
Washington, DC, area has been 2.12% (Executive Order 13322, 69
Federal Register 231).
!The pay adjustment for officials has been limited to 1.5%.
!Upon approval of the Consolidated Appropriations Act, 2004, GS pay
will be adjusted to a total of 4.1%, retroactive to the first pay period
beginning on or after January 1, 2004, with the rate of 2.7% for basic pay.
Salaries of officials will increase to the 2.2% rate, retroactively.
2 H.R. 2989, Transportation, Treasury, and General Government Appropriations Act, 2004, the
provisions of which are found at Division F; H.R. 2673, Consolidated Appropriations Act, 2004,
see Section 640 for the pay provision.
3 For current and projected rates of pay for officials, see CRS Report 98-53, Salaries of Federal
Officials, A Fact Sheet, by Sharon S. Gressle.