BUDGET

Obama to Propose Federal Pay Increase

Employees could see .5 percent jump in 2013.

President Obama will propose a modest pay increase for federal employees as part of his 2013 budget, White House officials confirmed Friday. The .5 percent increase in worker compensation would be the first bonus for federal employees since Obama mandated a two-year pay freeze in late 2010. Republican lawmakers and presidential candidates wanted to maintain the freeze for at least one more year as a way to pay for the payroll-tax extension. The proposal would save roughly $28 billion over the next 10 years and $2 billion in the fiscal year of 2013, officials said. While no date has been set, the White House is expected to formally release its 2013 budget proposal in early February.