Federal white-collar employees are intended by law to receive an annual pay adjustment and a locality-based comparability payment, effective in January of each year, under Section 529 of P.L. 101-509, the Federal Employees Pay Comparability Act (FEPCA) of 1990. The law has never been implemented as originally enacted; annual and locality payments pursuant to the statute have been reduced each year. Although the annual adjustment and the locality payment are sometimes referred to as cost-of-living adjustments, neither is based on changes in the cost of living. The annual pay adjustment is based on the Employment Cost Index (ECI), which measures change in private-sector wages and salaries. The size of the locality payment is determined by the President and is based on a comparison of nonfederal and General Schedule salaries in 32 pay areas nationwide. By law, the disparity between nonfederal and federal salaries was to be gradually reduced to 5% during the years 1994 to 2002. Continuing in each year thereafter, FEPCA requires that amounts payable may not be less than the full amount necessary to reduce the pay disparity to 5%. An average 3.1% pay adjustment in January 2006 is included in the conference report accompanying the Transportation, Treasury, ...