August 28, 1987

To the Congress of the United States:

Under the Federal Pay Comparability Act of 1970, the President is required to make a decision each year on what, if any, pay adjustment should be provided for Federal employees under the General Schedule and the related statutory pay systems.

My pay advisors have reported to me that an increase in pay rates averaging 23.74 percent, to be effective in October 1987, would be required under existing procedures to raise Federal pay rates to comparability with private sector pay rates for the same levels of work. However, the law also empowers me to prepare and transmit to the Congress an alternative plan for the pay adjustment if I consider such an alternative plan appropriate because of ``national emergency or economic conditions affecting the general welfare.'' Furthermore, section 15201(a) of the Consolidated Omnibus Budget Reconciliation Act of 1985, Public Law 99 - 272, requires that, in adjusting rates of pay under the Comparability Act, I achieve savings of at least $1.264 billion in fiscal year 1988 compared to the ``baseline'' the Congress has used in its budget process. Section 15201(a) also requires that the effective date of the pay adjustment be delayed until January 1988.

Accordingly, after reviewing the reports of my Pay Agent and the Advisory Committee on Federal Pay, after considering the adverse effect that a 23.74 percent increase in Federal pay rates might have on our national economy, and in order to implement the requirements of the Reconciliation Act, I have determined that economic conditions affecting the general welfare require the following alternative plan for this pay adjustment:

In accordance with section 5305(c)(1) of title 5, United States Code, the pay rates of the General Schedule and the related statutory pay schedules shall be increased by an overall percentage of 2 percent for each schedule, with such increase to become effective on the first day of the first applicable pay period beginning on or after January 1, 1988.

This alternative plan would produce savings that exceed the amounts required by the Congress in the Reconciliation Act for fiscal year 1988.

Accompanying this report and made a part hereof are the pay schedules that will result from this alternative plan, including, as required by section 5382(c) of title 5, United States Code, the rates of basic pay for the Senior Executive Service, in accordance with the formula established in Schedule 4 of Executive Order 12578.

Ronald Reagan

The White House,

August 28, 1987.

Note: The message was released by the Office of the Press Secretary on August 29.