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THE BUDGETARY TREATMENT OF
FEDERAL CIVILIAN AGENCY PAY RAISES:
A TECHNICAL ANALYSIS
 
 
January 1983
 
 
NOTES

Unless otherwise noted, all years referred to in this report are fiscal years.

Details in the text, tables, and figures of this report may not add to totals because of rounding.

In tables, BA refers to budget authority, O signifies outlays.
 
 
PREFACE

The Congressional Budget Act (Public Law 93-344) requires the Congressional Budget Office (CBO) to submit an annual report on budgetary projections and to assist the House and Senate Committees on the Budget in preparing the Congressional budget resolutions. As part of these responsibilities, CBO periodically issues technical analysis papers that provide background information and documentation on CBO's budget estimates. This paper, the latest in the series, reviews the budgetary treatment of federal civilian agency pay raises and describes how CBO estimates the costs of those pay raises.

The report was written by Charles Essick of the Projections Unit, Budget Analysis Division, under the supervision of Paul N. Van de Water and James L. Blum. The author gratefully acknowledges the assistance of Frank White of the Office of Management and Budget and Fred Hohlweg of the Office of Personnel Management. Valuable comments were provided by David Delquadro, Robert Hartman, and the Projections Unit staff. Francis Pierce edited the report, and David A. Bashore prepared it for publication.
 

Alice M. Rivlin
Director
January 1983
 
 

CONTENTS
 

SUMMARY

CHAPTER I. INTRODUCTION

CHAPTER II. PAY RAISES IN THE FEDERAL BUDGET

CHAPTER III. ESTIMATING THE COST OF PAY RATE INCREASES--THE MODEL

CHAPTER IV. CURRENT PAY ESTIMATES

TABLES
 
1.  HISTORICAL FEDERAL WHITE-COLLAR PAY RATE INCREASES
2.  HISTORICAL PAY RAISE ABSORPTION RATES-AVERAGE FOR ALL CIVILIAN AGENCIES
3.  PORTRAYAL OF FIRST CONCURRENT RESOLUTION PAY RAISES IN FUNCTION 920
4.  NET BUDGETARY EFFECT OF A FEDERAL PAY RAISE
5.  STATED AND EFFECTIVE PAY RATE INCREASES
6.  INCREASES IN BUDGET AUTHORITY FOR SALARIES OF WHITE-COLLAR WORKERS NOT PAID OUT OF TRUST AND REVOLVING FUNDS
7.  INCREASES IN BUDGET AUTHORITY AND OUTLAYS FOR SALARIES OF WHITE-COLLAR WORKERS NOT PAID OUT OF TRUST AND REVOLVING FUNDS
8.  INCREASES IN BUDGET AUTHORITY AND OUTLAYS FOR SALARIES OF MILITARY EMPLOYEES IN CIVILIAN AGENCIES
9.  INCREASES IN BUDGET AUTHORITY AND OUTLAYS FOR WAGES OF BLUE-COLLAR WORKERS
10.  TOTAL INCREASES IN BUDGET AUTHORITY AND OUTLAYS FOR CIVILIAN AGENCY PAY
11.  TOTAL INCREASES IN BUDGET AUTHORITY AND OUTLAYS DISPLAYED BY CBO IN THE ALLOWANCES FUNCTION
12.  BASELINE ESTIMATES FOR CIVILIAN AGENCY PAY
13.  COMPARISON OF CBO BASELINE PAY ESTIMATES FOR CIVILIAN AGENCIES WITH THOSE OF THE FIRST CONCURRENT RESOLUTION
14.  COMPARISON OF FEDERAL PAY RAISE COSTS UNDER THE PRESIDENT'S 1983 MID-SESSION REVIEW AND CBO'S REESTIMATE OF THE PRESIDENT'S POLICY
15.  COMPARISON OF CBO'S FULL COST ESTIMATES OF THE PRESIDENT'S BUDGET WITH AND WITHOUT WORK FORCE REDUCTIONS
 
FIGURES
 
1.  DISTRIBUTION OF GENERAL SCHEDULE AND MERIT SYSTEM EMPLOYMENT BY GRADE, ALL AREAS, MARCH 1982
2.  ESTIMATING THE TOTAL INCREASED FUNDING FOR FEDERAL CIVILIAN AGENCY PAY


 
SUMMARY

This report deals with the treatment of civilian agency pay raises in the federal budget. It addresses two primary topics: the major determinants of federal civilian pay costs, and the model used by CBO to project the cost of civilian agency pay raises.

These topics are important for two reasons. First, federal civilian agency pay raises usually involve a great deal of money. In 1982, for example, the Congress appropriated nearly $1 billion to cover the cost of the 4.8 percent pay adjustment approved for civilian agency workers in that year. Because the actual level of expenditures depends largely on policy decisions made by the President and the Congress, the ramifications of federal pay policy should be made as clear as possible. Second, computing federal pay costs is very complex, largely because of the numerous pay systems maintained by the federal government. Separate salary schedules exist for regular white-collar employees (General Schedule), Foreign Service workers, doctors and nurses, blue-collar employees, uniformed personnel, and top-level federal executives. Because of this complexity, CBO has developed a computerized model for projecting the additional budget authority and outlays required to finance anticipated pay raises for federal workers. This model projects pay raise costs for a five-year period.

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