'Locality pay' for federal workers won't increase

Federal employees whose regional costs of living entitles them to higher compensation will see no increase in their "locality pay" percentages next year, President Barack Obama informed Congress on Monday.

Workers who receive pay over and above the base federal rates — because of higher living costs and greater private-sector pay in their regions — would have been entitled to an average 16.5 percent increase under a legal formula. But presidents can invoke emergency conditions to set their own pay plans.

Citing the current stress on the economy, Obama said current locality percentages would remain in effect in 2010.

In August, Obama announced he would reduce pay increases for all federal workers from 2.4 percent to 2 percent.

In his letter Monday to House Speaker Nancy Pelosi and Vice President Joe Biden, Obama noted that the initial pay formulas would have increased the salaries of many federal workers by an average of 18.9 percent. Biden received the letter in his capacity as president of the Senate.

"Our country continues to face serious economic conditions affecting the general welfare and most Americans would not understand or accept that federal employees should receive an average pay increase of 18.9 percent while many of their fellow citizens are facing employment cutbacks or unemployment," Obama wrote.

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Paying the full increase, Obama said, would have cost $19.9 billion a year more than he had budgeted for 2010 with the 2 percent wage increase.

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Presidents George W. Bush and Bill Clinton invoked the same authority as Obama did to adopt their own pay plans.

As he did in August, Obama said he did not believe the decision would hurt the government's ability to attract or retain workers. He said any increase above the amount he budgeted would have required reductions in hiring to cover the costs.

There are more than 1.8 million civilian employees in the federal government, most of them working in one of 31 localities or regions where pay is adjusted according to local cost-of-living and private sector compensation rates.