FOR IMMEDIATE RELEASE February 03, 2003

CONTACT: Stacey Farnen (202) 225 - 3130

Hoyer on the President's 2004 Budget and Federal Employees

WASHINGTON - House Democratic Whip Steny Hoyer (MD) released the following statement today regarding the fiscal year 2004 Budget released by the Bush Administration today and its affect on federal employees:

"I am very disappointed that President Bush continues to pursue policies in his fiscal year 2004 budget proposal that will undercut the morale and the effectiveness of the federal workforce.

"As I said last month, I oppose the Administration's proposal to provide a 2 percent pay adjustment for federal employees in 2004, which is almost a full percentage point below what is required by law. I support the idea of rewarding top-performers but not at the expense of following the law governing federal employee pay. It is critically important that we pay our civilian federal employees a competitive wage or we will not be able to recruit and retain the quality workers that are necessary to fight the war on terrorism and run an effective government.

"The President has also failed again to adhere to the principle of pay parity by proposing a 4.1 percent average pay adjustment for military employees. For 15 of the last 18 years, Congress has provided the same pay adjustments to civilian federal employees and military personnel in recognition of the important role that both play in the nation's defense and future. I will fight with my colleagues in the regional delegation to adhere to the principle of pay parity.

"In addition, I do not support the President's proposal, which Congress disapproved of last year, to shift mandatory costs for CSRS retirement and FEHB costs from the mandatory side of the budget to discretionary accounts. Ultimately, I fear that our mandatory obligation to pay pension benefits to our federal employees and cover the government's portion of health care costs of our federal employees will have to compete against other discretionary programs in the Federal government.

"Finally, I support the process that is already in place to allow for public-private competition but I do not support this Administration's attempts to arbitrarily outsource over 425,000 jobs to the private sector. Last year, the House overwhelmingly disapproved of the arbitrary quotas proposed by the Administration in its 2003 budget. Often, outsourcing appears to save money but in the long run costs go up and the federal government does not save money or become more efficient."

The 2004 pay proposal contained in the Bush Administration's fiscal year 2004 budget proposal combines a two percent across the board increase with a performance component. That component is a $500M "Human Capital" fund to allow managers to increase pay beyond annual raises with the purpose of rewarding top-performing employees with a permanent increase in pay. Even if this was distributed equally, this fund would equate to a 2.5% pay increase for federal employees, below the 2.7% required by law for the base pay increase and far under the 25% increase for locality pay.

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