President Biden is proposing a 2 percent pay raise for Federal civilian employees in his proposed fiscal year (FY) 2025 budget released on Monday, marking a significant decrease from last year’s 5.2 percent pay raise.
The White House’s Office of Management and Budget (OMB) said the 2 percent pay increase aims to provide competitive compensation to the Federal workforce and builds on previous years’ pay raises.
“The budget includes a pay adjustment of 2.0 percent, building on significant increases in 2022, 2023, and 2024 while accounting for the fiscal constraints Federal agencies face in FY 2025,” OMB Deputy Director Jason Miller and Office of Personnel Management (OPM) Director Kiran Ahuja wrote in a blog post on the president’s budget.
“The administration continues to prioritize Federal compensation and also looks forward to working with Congress to address long-standing issues of pay compression which impact employees at various levels throughout the government,” Miller and Ahuja wrote. “By continuing to pursue structural improvements and use of flexibilities, we will enhance the competitiveness of the Federal pay system.”
This pay increase would be the smallest since President Biden took office – Federal employees received a 5.2 percent raise in 2024, 4.6 percent in 2023, and 2.7 percent in 2022.
If enacted, most Federal civilian employees would see the pay raise kick in during the first full pay period of January 2025.
While still significant, the 2 percent pay raise is less than some might have hoped for, including Rep. Gerry Connolly, D-Va., and Sen. Brian Schatz, D-Hawaii, who introduced a 7.4 percent pay raise earlier this year in the latest version of their Federal Adjustment of Income Rates (FAIR) Act.
“While every pay raise is a step in the right direction after decades of disinvestment in the Federal workforce, our legislation remains the best option for ensuring Federal employees are fairly and properly compensated for their service,” Rep. Connolly said today in a statement to MeriTalk.
The president’s FY2025 budget also proposes a 4.5 percent pay raise for military service members.
“The budget funds a robust 4.5 percent pay raise for America’s servicemembers, continuing to build on the highest pay raise in decades of 5.2 percent in 2024,” the budget proposal says. “The budget also provides servicemembers with annual rate increases for both housing and subsistence allowances.”
The American Federation of Government Employees (AFGE) – the largest union for Federal employees – expressed its disappointment today that the budget “turns its back on the longstanding practice of pay raise parity for civilian and military employees of the Federal government.”
“A 4.5 percent increase for civilian workers, as requested for our colleagues in the military, would reflect the Employment Cost Index (ECI) and would at least be a nod toward compliance with the Federal Employee Pay Comparability Act (FEPCA),” AFGE National President Everett Kelley said in a statement.
“Civilian Federal workers right now are working for 27.5 percent less than their private-sector counterparts. A paltry, 2 percent raise for civilian Federal employees will do very little to close that widening gap,” he added. “While we are happy to see steps taken to address pay compression, these efforts simply nibble around the edges of a much larger issue with Federal pay.”
