Federal Civilian and Military Pay Message to the Congress Transmitting the Federal Pay Comparability Alternative Plan.

To the Congress of the United States:

Under the Pay Comparability Act of 1970, an adjustment in Federal white collar pay will be required on October 1.

I have reviewed the report of my Pay Agent and the recommendations of the Advisory Committee on Federal Pay relative to pay adjustment. Their findings indicate that an average 8.4 percent increase, at a cost of $4.5 billion, will be required to achieve comparability with the private sector.

I support comparability in pay between the Federal Government and the private sector. It is essential to ensure that the Federal Government continues to attract and retain qualified and dedicated employees. The Federal Government's civilian and military personnel have given the country loyal and competent service, and I would normally have no hesitancy in ordering a pay raise achieving comparability. However, pay comparability must be viewed in the light of the overall economic situation now facing our country. For that reason, my decision about pay comparability this year is especially difficult.

Today the greatest single threat to our national economic growth and the jobs and prosperity of our people is inflation. It persists because all of us—business and labor, farmers and consumers—are caught on a treadmill that none of us can stop alone. Each group desires to raise its income to meet rising costs; eventually we all lose the inflation battle together.

To curb the wage and price spiral, I proposed last spring that in each industry and sector of the economy, wage increases this year be held significantly below the average increases for the two preceding years. The Federal Government should set an example in this effort. A Federal white collar civilian and military increase of 5.5 percent would be consistent with this guideline.

The pay act gives me the authority to propose an alternative pay adjustment which I consider appropriate in the light of, "economic conditions affecting the general welfare." Therefore I am submitting to the Congress an alternative plan for a 5.5 percent pay increase. This will allow the Federal Government to set an example for labor and industry and lead the fight against inflation by example, and not just words alone.

Accordingly, I strongly urge the Congress to support the alternative recommendation which is attached.

JIMMY CARTER

The White House,

August 31, 1978.

FEDERAL PAY COMPARABILITY ALTERNATIVE PLAN

In consideration of economic conditions affecting the general welfare, I hereby transmit to the Congress the following alternative plan, as authorized and required by Section 5305 (c) (1) of Title 5, United States Code:

The adjustment in the rates of pay of each Federal statutory pay system to become effective on the first day of the first applicable pay period that begins on or after October 1, 1978, shall be limited to a 5.5 percent increase for any position at any grade in lieu of the adjustments as determined under the comparability procedure set forth in Section 3(a) of the Federal Pay Comparability Act of 1970 (5 U.S.C. 5305).