On August 30 President Biden formalized his planned 2 percent pay raise, as previously announced in his Fiscal Year 2025 budget request. The 2 percent raise – comprised of a 1.7 percent across-the-board raise and an average 0.3 percent boost to locality pay – was included in a letter to Congress. This disappointment comes after two years of reasonable pay raises – 5.2 percent in 2024 and 4.6 percent in 2023.

Both the House and Senate versions of the Fiscal Year 2025 spending bill for Financial Services and General Government stay silent on the issue of a pay raise, in effect endorsing President Biden’s alternative pay plan. The uniformed military is slated to receive a 4.5 percent raise for 2025. FMA supports the 4.5 percent raise for active military and has advocated for pay parity for feds. Federal employees work side-by-side with their uniformed military colleagues and there is no excuse for failing to reward them evenly.

Federal pay has not kept pace with inflation, and retention of feds is at a severe risk. The Federal Salary Council reported in 2023 that federal workers earned more than 27 percent less than private sector counterparts, a growing disparity that will only force more of the best and brightest out of federal service.

While the 2 percent raise appears probable at this point, Biden must issue an Executive Order by the end of the year in order for the raise to be implemented.