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105th Congress, 1st Session - - - - - - - - - - -  House Document 105-20


 
 IMPLEMENTATION OF LOCALITY-BASED COMPARABILITY PAYMENTS FOR GENERAL 
               SCHEDULE EMPLOYEES FOR CALENDAR YEAR 1997

                               __________

                             COMMUNICATION

                                  FROM

                   THE PRESIDENT OF THE UNITED STATES

                              TRANSMITTING


   HIS REPORT ON THE IMPLEMENTATION OF LOCALITY-BASED COMPARABILITY 
    PAYMENTS FOR GENERAL SCHEDULE EMPLOYEES FOR CALENDAR YEAR 1997--
  RECEIVED IN THE UNITED STATES HOUSE OF REPRESENTATIVES NOVEMBER 22, 
                 1996, PURSUANT TO 5 U.S.C. 5305(a)(3)

<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>


 January 9, 1997.--Referred to the Committee on Government Reform and 
                  Oversight and ordered to be printed.


                                           The White House,
                                 Washington, DC, November 22, 1996.
Hon. Newt Gingrich,
Speaker of the House of Representatives,
Washington, DC.
    Dear Mr. Speaker: I am transmitting an alternative plan for 
Federal employee locality-based comparability payments 
(``locality pay'') for 1997.
    Under title 5, United States Code, Federal civilian 
employees would receive a two-part pay raise in January 1997: 
(1) a 2.3 percent base salary raise linked to the change in the 
wage and salary, private industry worker, part of the 
Employment Cost Index (ECI); and (2) a locality pay raise, 
based on the Bureau of Labor Statistics' salary surveys of non-
Federal employers in local pay areas, costing about 5.2 percent 
of payroll.
    But, for each part of the two-part pay increase, title 5 
gives me the authority to implement an alternative pay 
adjustment plan if I view the pay adjustment that would 
otherwise take effect as inappropriate due to ``national 
emergency or serious economic conditions affecting the general 
welfare.'' Over the past 20 years, Presidents have used this or 
similar authority for most annual Federal pay raises.
    In evaluating ``an economic condition affecting the general 
welfare,'' the law directs me to consider such economic 
measures as the Index of Leading Economic Indicators, the Gross 
National Product, the unemployment rate, the budget deficit, 
the Consumer Price Index, the Producer Price Index, the 
Employment Cost Index, and the Implicit Price Deflator for 
Personal Consumption Expenditures.
    Earlier this year, I decided that I would implement--
effective in January 1997--the full 2.3 percent base salary 
adjustment. As a result, it was not necessary to transmit an 
alternative pay plan by the legal deadline of August 31.
    In assessing the appropriate locality pay increase for 
1997, I reviewed the indicators cited above and other pertinent 
measures of our economy. Permitting the full locality pay 
increases to take effect would, when combined with the 2.3 
percent base salary increase, produce a total Federal civilian 
payroll increase of about 7.5 percent. This increase would cost 
about $5.9 billion in 1997, $3.6 billion more than the total 
3.0 percent increase I proposed in the fiscal 1997 Budget. Such 
an increase is inconsistent with the budget discipline that my 
Administration has put in place and that has contributed to 
sustained economic growth, low inflation and unemployment, and 
a continuous decline in the budget deficit.
    To maintain this discipline and its favorable impact on 
economic conditions, I have determined that the total civilian 
raise of 3.0 percent that I proposed in my 1997 Budget remains 
appropriate. This raise matches the 3.0 percent basic pay 
increase that I proposed for military members in my 1997 
Budget, and that was enacted in the fiscal year 1997 Defense 
Authorization Act. Given the 2.3 percent base salary increase, 
the total increase of 3.0 percent allows an amount equal to 0.7 
percent of payroll for locality pay.
    Accordingly, I have determined that: Under the authority of 
section 5304a of title 5, United States Code, locality-based 
comparability payments in the amounts set forth on the attached 
table shall be effective on the first day of the first 
applicable pay period beginning on or after January 1, 1997. 
When compared with the payments currently in effect, these 
comparability payments will increase the General Schedule 
payroll by about 0.7 percent.
    Finally, the law requires that I include in this report an 
assessment of how my decisions will affect the Government's 
ability to recruit and retain well-qulaiifed employees. While I 
regret that our fiscal situation does not permit granting 
Federal employees a higher locality pay increase, I do not 
believe this will have any material impact on the quality of 
our workforce. Under the Federal Workforce Restructuring Act of 
1994, and our efforts to reinvent Federal programs, the number 
of Federal employees is falling substantially. As a result, 
hiring and attrition are very low. In addition, as the need 
arises, the Government can use many pay tools--such as 
recruitment bonuses, retention allowances, and special salary 
rates--to maintain the high quality workforce that serves our 
Nation so very well.
            Sincerely,
                                                William J. Clinton.


 Locality-Based Comparability Payments Under Alternative Plan Effective 
                              January 1997

        Pay locality                                             Percent
Atlanta MSA...................................................      5.65
Boston CMSA...................................................      7.97
Chicago CMSA..................................................      8.13
Cincinnati CMSA...............................................      6.75
Cleveland CMSA................................................      5.51
Columbus, OH, MSA.............................................      6.62
Dallas CMSA...................................................      6.40
Dayton MSA....................................................      5.66
Denver CMSA...................................................      7.06
Detroit CMSA..................................................      8.14
Houston CMSA..................................................     11.52
Huntsville MSA................................................      5.18
Indianapolis MSA..............................................      5.49
Kansas City MSA...............................................      5.10
Los Angeles CMSA \2\..........................................      9.46
Miami CMSA....................................................      6.74
Milwaukee CMSA................................................      5.58
Minneapolis MSA...............................................      6.53
New York CMSA.................................................      9.15
Philadelphia CMSA.............................................      7.28
Pittsburgh MSA................................................      5.07
Portland, OR, CMSA............................................      6.13
Richmond MSA..................................................      5.27
Sacramento CMSA...............................................      6.56
St. Louis MSA.................................................      5.18
San Diego MSA.................................................      7.07
San Francisco CMSA............................................     10.66
Seattle CMSA..................................................      6.62
Washington CMSA \3\...........................................      7.11
Rest of United States \4\.....................................      4.81

Note.--MSA means Metropolitan Statistical Area and CMSA means 
Consolidated Metropolitan Statistical Area, both as defined by the 
Office of Management and Budget (OMB) in OMB Bulletin Number 96-08, June 
28, 1996.

\1\ The comparability payment is a cumulative percentage, beginning with 
the first comparability payments in 1994, applied to base salary to 
calculate total pay. It is not the percentage increase in the 
comparability payment over the previous rate.
\2\ Pay locality also includes Santa Barbara County and Edwards Air 
Force Base, CA.
\3\ Pay locality also includes St. Mary's County, MD.
\4\ Does not include Alaska, Hawaii, or U.S. territories or possessions.
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