What happens to federal pay raise if Congress fails to pass a budget?

Correction: A previous version of this article misattributed information regarding how pay raises are implemented.

If Congress fails to fund the government by the time its continuing resolution expires next week, will federal employees still get a raise on Jan. 1?

Lawmakers on Capitol Hill are fast approaching the Dec. 16 deadline to finalize a 2023 spending deal after Congress passed a short-term CR in September. Another one, if passed, may punt the deadline to Dec. 23.

Whether or not Congress passes a stopgap bill or puts an end once and for all to deliberation via a final spending package, the federal pay raise is likely to take effect as proposed by President Joe Biden in late August, according to John Hatton, who leads policy and programs at the National Active and Retired Federal Employees Association.

“Whether it’s a continuing resolution or even the full-year appropriations bill, if that’s silent on federal pay for the next year, or if it doesn’t have anything explicit on the pay raise, the pay raise will go into effect,” Hatton said in an interview with Federal Times.

Biden’s proposed pay raise included an across-the-board base pay increase of 4.1% and a locality pay average increase of 0.5%, which will be final upon issuing an executive order that will go into effect at the start of the calendar year. Customarily, that order is signed before the end of December, usually in the last week but possibly sooner.

Hatton said Congress can dictate what the federal pay raise is in the appropriations bills, a CR or the 2023 Financial Services and General Government bill, but it’s unlikely it will interfere this year, thereby deferring to the president’s authority.

“There’s a lot of indications that nobody’s really fighting this battle,” he said.

That also means it’s unlikely at this stage that a higher across-the-board pay raise will be proposed, which federal employee groups and unions advocated to offset inflation.

And if a CR is passed, that doesn’t mean the pay raise will automatically be stripped.

The bottom line is once the executive order is signed for COLAs, the pay increase is approved, whether or not lawmakers used a CR or omnibus.

Some agencies use funding for staffing more than others, so that can have differing degrees of impact on agencies.

If the funding is under a CR, agencies will have fewer resources available elsewhere because they need to make room in their budgets for the pay increase.

In short, if the President issues an executive order saying pay raises must go up, agencies cannot refuse it, Hatton said.

There have been close calls in the past with regard to Congress’ budget negotiations and pay raises.

In 2018, former President Donald Trump initially said he would not give a raise to federal employees. It wasn’t until mid-February of 2019 that Trump signed the spending package to avoid a shutdown that allowed for a 1.9% civilian employee pay raise to be applied retroactively.

Federal Times reported that Congress can pass a CR with an anomaly, a component of the legislation that funds the government beyond previous levels, to increase federal pay if none is provided for by the president.

Once the pay…