President Obama plans to propose lifting the pay freeze on civilian federal workers in the budget he submits to Congress next month.
An official with the Office of Management and Budget confirms a Washington Post report that the Administration will use the 2013 fiscal year budget to call for a modest 0.5 percent pay hike for civilian federal employees.
For a federal worker making $50,000 a year, that would amount to a $250 pay raise.
An OMB official says the 0.5 percent pay raise will cost $800 million in the 2013 budget.
Mr. Obama announced a two-year pay freeze on federal workers on November 29, 2010.
"The hard truth is that getting this deficit under control is going to require broad sacrifice," he said on that date. "And that sacrifice must be shared by the employees of the federal government."
He said it would save $28 billion over five years.
A proposal to lift the pay freeze is welcome news to the nation's 2 million federal workers, many of whom live in states deemed essential to Mr. Obama's bid for re-election. Over 300,000 civil federal employees live in Virginia, a state Mr. Obama won in 2008 and is counting on again this year.
The pay raise plan would have to be approved by Congress, where some members looked to continue the pay freeze in order to offset the cost of extending the payroll tax cut to the end of 2012.