According to reporting in Federal News Radio, the White House is wanting to propose a 2023 federal pay raise of 4.6% in their budget request to Congress. If approved, this would be the highest pay raise in 15 years.
“The budget request is expected to go to Congress after the State of the Union, which is on March 1, Shalanda Young, the nominee to be director of the Office of Management and Budget, told the Senate Budget Committee on Feb. 1,” Federal News Radio wrote. The White House did not provide details of how the pay raise would be divided into an across-the-board increase and locality pay for 2023.
Federal employees have been concerned of increasing inflation. A recent report from the Bureau of Labor Statistics indicated an annual increase in the inflation rate of 7% for the last year.
House Democrats have already showed support for a higher pay raise in 2023. In January, Congressman Gerry Connolly (D-VA)and Senator Brian Schatz (D-HI) reintroduced the Federal Adjustment of Income Rates (FAIR) Act which — if passed — would provide federal employees with a 5.1% average pay raise for 2023.
For 2022, the White House and Congress approved a 2.7% pay raise. In 2021, federal employees received a 1% increase, but there were no adjustments in locality pay.
The process to arrive at a final figure of a 2023 pay raise for federal employees is long and complicated particularly in a mid-term election year. Pay raises for the next year are not usually announced until December.
Federal Retirees and the 2023 COLA
Federal retirees also have concerns about the impact of increasing inflation on their income.
The 2022 federal retiree cost-of-living adjustment (COLA) was 5.9 percent for those under the Civil Service Retirement System (CSRS) and 4.9 percent for those under the Federal Employees Retirement System (FERS).
The last COLA for federal retirees near this figure was in 2009, when CSRS retirees received 5.8 percent and FERS retirees received 4,8 percent. In 2021, the COLA for both CSRS and FERS retirees was 1.3 percent.
The January update for the Consumer Price Index — which is an indicator of inflation and a factor in determining retiree COLAs — is scheduled to be released by the Bureau of Labor Statistics on Feb. 10, 2022.