CRAWFORD, Texas (CNN) -- Citing the "national emergency" created by the September 11, 2001, attacks, President Bush Wednesday exercised his authority to limit the pay increase for many federal workers next January to 2 percent -- well below the 15 percent some employees would have been entitled to receive.

The president exercised the same authority last year, as have other presidents in the past. In this case, Bush said the country could not afford to give civilian federal employees who are covered by what is known as the General Schedule the full raises they would get had he not invoked his authority.

Those raises would have included a 2.7 percent increase to cover inflation as set by the government's Employment Cost Index.

Some federal employees also are eligible for -- but not guaranteed -- locality pay increases that are determined based on inflation and other factors, including housing costs. In some cases, the raises for employees covered by the locality system could have been as high as 15.1 percent.

In a letter to congressional leaders, the president said he was invoking his authority to implement an alternative pay plan if he came to the conclusion that allowing the full raises to go into effect would be inappropriate due to "national emergency or serious economic conditions affecting the general welfare."

Explaining his decision to limit raises to a total of 2 percent, Bush said granting the full increases would "interfere with our nation's ability to pursue the war on terrorism."

He said allowing the maximum raises to take effect would cost the Treasury Department about $13 billion in fiscal year 2004 -- $11 billion more than his call for 2 percent overall raises.

"Such cost increases would threaten our efforts against terrorism or force deep cuts in discretionary spending or federal employment to stay within the budget," the president's letter said. "Neither outcome is acceptable."

© 2003 CNN

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