Statement About Pay Increases for Federal Employees

THE Senate's action today in overturning my plan to defer Federal pay raises for a e-month period comes as a distinct disappointment.

It occurs at a time when we are attempting to hold down Federal spending in order to reduce inflationary pressures in the economy. This Senate action will add $340 million to Federal outlays and place additional strains not only on the taxpayers but also on other Government activities already hard-pressed for adequate funding.

My proposal called for a deferral of Federal pay increases from October until December of this year as an essential part of our fight against rising prices. Inflation is a serious national concern, and most Americans are undergoing sacrifices as their National Government strives to bring it under control.

As one of the largest groups of workers in the country, Federal employees recognize that they have a special obligation to join in this fight, and they have consistently met that obligation. They had a pay increase of more than 5 percent some 9 months ago, and I am confident that many of them would have been prepared to delay another increase until late this year.

The Senate's action makes it necessary for pay adjustments to become effective this October. Having considered the recommendations of my Federal pay "agent" (Director of the Office of Management and Budget and the Chairman of the Civil Service Commission), the Federal Employees Pay Council, and my advisory committee on Federal pay, I have decided to issue Executive orders early next week that will place into effect a 4.77 percent pay increase for civil service employees and comparable increases for the military services and other pay systems. The pay increases will be effective on the first pay period beginning on or after October 1, 1973.