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                           Office of the Press Secretary 
                        (Martha's Vineyard, Massachusetts) 
For Immediate Release                                   August 29, 1997 


The President today announced a plan to limit to 2.8 percent the average total pay increase for Federal white-collar employees that takes effect in January 1998. Without this action by the President, pay increases costing an estimated 10 percent of payroll would automatically take effect at that time under current Federal law.

In a letter notifying Congress of the alternative pay raise plan, the President noted that the 2.8 percent pay increase was proposed in his 1998 Budget and is necessary to be consistent with the bipartisan agreement to balance the budget in 2002. The President also noted that the increase is equal to the 2.8 percent basic pay increase he proposed for military personnel in his 1998 Budget.

Both the House and Senate have already approved a 2.8 percent increase for military personnel based on his recommendation.

The 2.8 percent pay raise consists of two parts: a 2.3 percent increase in the base pay schedule received by employees worldwide, and a 0.5 percent payroll increase to be used for locality pay adjustments in the 48 states other than Alaska and Hawaii.