A federal employee earning $90,000 a year stands to lose $3,420 in the first year of a freeze, compared with the 3.8% raise lawmakers from both parties are now demanding. That's about $131 per biweekly paycheck. Raises compound into your base salary, so a freeze that's never made up also cuts the FERS annuity. A 30-year retiree with that $90,000 salary would collect roughly $1,026 less a year, or about $25,650 over a 25-year retirement.
The fight is over whether Congress steps in. The administration's plan would freeze pay for most civilian employees while giving law enforcement personnel a supplemental increase of 3.8%. A bipartisan group wants leadership to extend that figure to the whole civilian workforce, as a floor rather than a ceiling. Their argument: if 3.8% works for one slice of the workforce, it works for the rest.
By the Numbers
- $3,420: first-year difference between a freeze and a 3.8% raise on a $90,000 salary
- $131.54: the same gap per biweekly paycheck (26 pay periods)
- $1,026 a year: lower FERS annuity for a 30-year retiree if that 3.8% never gets made up ($85.50 a month)
- $25,650: cumulative annuity loss over 25 years of retirement, before any COLAs
- $171 a year: TSP money you'd forgo if you contribute 5% of pay, because the agency match tracks your salary
- 3.8%: the floor lawmakers are asking for. They've left room for more.
How it works
General Schedule pay runs under the Federal Employees Pay Comparability Act of 1990, codified mainly at 5 U.S.C. 5303 and 5304. FEPCA sets a formula with two pieces.
The first is the base (across-the-board) adjustment. It's pegged to the Employment Cost Index for private-sector wages and salaries, minus half a percentage point, using ECI data with a built-in lag of about two years. The second is locality pay, which is supposed to close the gap between federal and local non-federal pay in each area. Locality calculations rely on data and recommendations from the Federal Salary Council and the President's Pay Agent.
That's the law on paper. In practice, the formula is a default the president can set aside. Under the alternative pay plan authority in 5 U.S.C. 5303(b), the president can send Congress a different plan, citing a "national emergency or serious economic conditions affecting the general welfare." The deadline is August 31 of the year before the raise takes effect. Presidents of both parties have used that authority in most years, and the full locality adjustments the formula calls for have essentially never been paid.
If Congress does nothing, the president's plan takes effect in the first pay period of January. That's the default, which is why this is a fight about congressional action rather than inaction.
To override, Congress has to pass a law setting a different number. The usual vehicle is the annual Financial Services and General Government appropriations bill, though a standalone bill or another must-pass measure can carry pay language too. Either way, both chambers have to pass it and the president has to sign it, or Congress has to override a veto. The bipartisan letter is a signal, not a law. Pay language tends to travel with spending bills, so when and how those bills move determines when a raise could become final.
A freeze has stuck before. Federal civilian base pay was frozen across the board for 2011, 2012 and 2013, following a two-year freeze announced in December 2010 and then extended. Employees got 1% in 2014. Whether Congress overrides a freeze comes down to the votes and the vehicle, not how sympathetic the case is.
A worked example
Take a mid-career GS employee at a base salary of $90,000. The number is illustrative, but it sits comfortably inside the range of many GS-11 to GS-13 salaries. Say she's 42, has 20 years of service, plans to retire at 62 with 30 years, and is FERS-covered.
Step 1: The raise. 3.8% of $90,000 is $3,420. Her new salary would be $93,420. Under a freeze, it stays $90,000.
Step 2: Per paycheck. $3,420 divided by 26 pay periods is $131.54 gross per paycheck, before taxes and deductions.
Step 3: The TSP angle. FERS agencies contribute 1% of pay automatically and match employee contributions up to 4% more. If she contributes at least 5% of pay, the agency puts in 5% of her salary. On the extra $3,420, that's $171 a year in agency money she wouldn't get under a freeze, before it grows in the account.
Step 4: The annuity. The basic FERS formula is 1% of the high-3 average salary times years of service (1.1% if you retire at 62 or later with at least 20 years). She'd retire at 62 with 30 years, so the multiplier is 1.1%, or 33% of high-3. Hold everything else equal, and the 3.8% lifts her high-3 by $3,420. That means:
- 33% × $3,420 = $1,129 a year, or about $94 a month, with the 1.1% multiplier
- At the standard 1.0% multiplier (retiring before 62), it's 30% × $3,420 = $1,026 a year, or $85.50 a month
Over 25 years of retirement with no COLAs, that's $28,215 at 1.1% or $25,650 at 1.0%.
Step 5: The catch. This assumes the freeze is never made up. Congress could award larger raises later, and the gap would shrink. It can't fully erase the lost year of pay, though. In a freeze year, you simply don't get it.
Who is affected — and by how much
Everyone in the GS system, though not equally in dollars. A flat 3.8% scales with salary:
- $60,000 salary: $2,280 a year
- $90,000 salary: $3,420 a year
- $100,000 salary: $3,800 a year
- $130,000 salary: $4,940 a year
GS employees outside law enforcement are the group the freeze hits directly. The lawmakers' proposal would bring them up to the level the administration has already proposed for law enforcement personnel.
Law enforcement personnel are slated to get the 3.8% under the administration's plan, so the push wouldn't change their number. How the administration defines "law enforcement" determines who qualifies. Check your occupational series against the language when it's published.
Wage grade (Federal Wage System) workers are paid under prevailing-rate rules rather than the GS formula, but their increases are generally tied to what GS employees get. A GS freeze can limit their raises too.
Military service members are on a separate track. Their basic pay raise is set by a different statutory formula tied to the ECI, and nothing here changes it unless Congress ties them together. See the FAQ.
Postal employees are covered by collective bargaining, not this process.
Retirees don't get a pay raise, but a freeze reaches them indirectly. Future retirees' annuities are based on salary, so a freeze lowers the starting point. Current retirees' COLAs run off the CPI and aren't touched by this fight.
How to estimate your own
You need three inputs: your current base salary (or your locality-adjusted salary, if you want the real take-home number), the raise percentage, and how many years you expect to stay. Multiply salary by the percentage, then divide by 26 for your paycheck. To see the annuity effect, multiply that increase by 1.0% or 1.1% and by your years of service.
Or skip the arithmetic. Plug your numbers into the federal pay raise calculator and compare 0%, 3.8% and a higher figure side by side. Use your actual grade and step, not a round number, because within-grade increases and locality pay change the baseline.
FAQ
Can Congress really override a presidential pay freeze? Yes. The president's alternative pay plan is a default under the statute, not a permanent decision. Congress can pass legislation setting a different raise, and the president has to sign it, or Congress has to override a veto.
Does 3.8% include locality pay? The reporting describes it as an across-the-board raise for civilian employees. How it would be applied, such as whether it's base-only or blended with locality, would be in the legislative text. Don't assume until you see the bill language.
Would a 3.8% raise apply to military pay? No. Military basic pay is set under a separate statutory formula tied to the ECI. Raises for troops and civilians sometimes get discussed together, but they're legally distinct.
If the raise passes late, do I get back pay? It depends on the language. Congress can make a raise retroactive to January, and has done so in some cases, but it isn't automatic. Watch for an effective date in the bill.
Is 3.8% a ceiling? Not according to the lawmakers. They've framed it as a minimum, so the final number could be higher. It could also end up lower.
Bottom line
A freeze isn't a one-year problem. It's a permanent cut in the base your future raises, TSP match and FERS annuity are built from, unless someone later makes it up. For a $90,000 employee, the gap is $3,420 in year one and roughly $1,000 a year in retirement. The 3.8% push is bipartisan, but it's a request to leadership, not yet a bill. Until a vehicle with pay language moves and gets signed, the president's plan is the default.