Memorandum From the President on the Federal Pay and the Anti-Inflation Program

Memorandum for the Heads of Executive Departments and Agencies
Subject: Federal Pay and the Anti-inflation Program

The success of our anti-inflation effort is critical to the economic well-being of the nation. To achieve this success, it is vital that the Government, in managing its own affairs, join with the rest of the nation in a positive commitment to reducing inflationary pressures. Accordingly, I have determined that it would be inconsistent with the public interest for any category of Federal pay rates to be increased by more than 5.5 percent during fiscal year 1979.

To this end, this Administration and the Congress have frozen Federal executive pay altogether, and have placed a 5.5 percent ceiling on pay increases for most Federal workers—those under the General Schedule and related pay systems, the members of the uniformed services, and most Federal wage employees.

However, there are substantial numbers of nonappropriated fund employees and other workers employed by entities of the Federal Government who are not covered by these Government-wide actions, since they are under a variety of relatively small pay systems over which you have pay setting authority. In order to ensure that proposed pay increases for other pay systems do not exceed the maximums for Federal pay that the Congress and I have set, the policy of this Administration is:

In the public interest to control inflation, each officer or employee in the executive branch who has administrative authority to set rates of pay for any Federal officers or employees should exercise such authority, to the extent permissible under law, treaty, or international agreement, in such a way as to ensure that no rate of pay for any category of officers or employees is increased more than 5.5 percent during fiscal year 1979. Specifically excluded from this limitation are rates of pay for foreign nationals authorized under the Foreign Service Act of 1946 as amended (22 U.S.C. 889) and increases in rates of pay to implement the minimum wage provisions of the Fair Labor Standards Act of 1938, as amended, as authorized under current agency policies.

The Chairman of the Civil Service Commission, until January 1, 1979, and the Director of the Office of Personnel Management, on and after January 1, 1979, will provide you with any further advice or assistance you may need in complying with this policy.

JIMMY CARTER