- The White House signed an executive order in December, making the 2024 pay raise 5.2%.
- Government shutdown is looming if Congress doesn’t act this month.
- If shutdown does hit and cause furloughs – would 2024 pay raise be retroactively changed?
Since mid-September, when it became clear that the annual budget bills were getting hung up on Capitol Hill, there has been a potential threat of a shutdown. After one speaker of the house was ousted for agreeing to a stopgap measure that kept the government open until November 17th, the new speaker got another continuing resolution passed that created a two-tier deadline with some agencies shutting down on January 19th without action from the legislative branch and the rest of the government closing on February 2nd.
Check out our Financial Planning Webinar for Federal Employees -
Should there be a closure and federal employees have to endure furloughs and all the hardship that goes along with that, then it is possible that Congress could retroactively enact a larger pay increase for the federal workforce – possibly even the 8.7% that was proposed in last year’s RAISE Act. If there is a shutdown that lasts more than a few days, then it is possible as the 2024 fiscal year’s federal budget has just mirrored the 2023 budget due to the aforementioned stopgap measures. There is precedent for this as before the 2018-2019 shutdown, it was looking like feds would not get a raise (a ‘pay freeze’) but once the shutdown ended, Congress approved a 1.9% raise. Without action from Congress though, the 5.2% raise decreed by the recent executive order would stand.
Shutdown Drama
There are four ways this could all end as the month progresses – the first is that there will be another stopgap bill that will “kick the can” further down the road. For what it’s worth, Senator Mitch McConnell has said another continuing resolution is “simply unacceptable.” Or, parts of the government get closed on January 19th but a budgetary bill is passed before the second deadline at the beginning of February. Congress could also prevent a shutdown by passing either the 2024 annual funding bills or a single omnibus bill that would encompass funding for the entire federal government. Before the Christmas break, Congress did pass the NDAA that funded the DoD and finalized a 5.2% pay raise for military personnel.
--
Until Next Time,
You Might Also Enjoy this Podcast:
The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Serving Those Who Serve writers and not necessarily those of RJFS or Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy suggested. Every investor’s situation is unique and you should consider your investment goals, risk tolerance, and time horizon before making any investment or financial decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. **
