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                     Office of the Press Secretary
                          (Martha's Vineyard)
For Immediate Release                                    August 31, l994


Today the President announced a revised pay schedule for Federal white-collar employees that reduces from 2.6 percent to 2 percent the pay increase employees are scheduled to receive in January 1995 under current Federal law.

In a letter to the Congress, the President stated that the plan is consistent with a provision of the House version of the 1995 Treasury, Postal Service, and General Government appropriations bill. That provision was proposed by Representative Steny Hoyer, who chairs the House Appropriations Subcommittee on Treasury, Postal Service, and General Government.

Congress has not yet taken final action on the appropriations bill.

In his letter, the President emphasized the need to maintain budget discipline.

"The budget discipline put in place by my Administration has contributed to sustained economic growth and low inflation," he wrote. "To continue this budget discipline and its favorable impact on economic conditions I have determined that an alternative pay adjustment is appropriate for the 1995 pay raise..."

In the letter, the President also said that, in the absence of legislation, he intends to provide locality pay raises to Federal employees equal to 0.6 percent of payroll. This amount, approximately half of what would otherwise be provided under current law, would also be consistent with the House version of the appropriations bill.

Implementation by the President of the locality increases would also be accomplished by an alternative pay raise plan. The deadline for transmitting the locality pay alternative is November 30.