Obama hiking minimum pay for new federal contracts

The increase from a national minimum wage of $7.25 an hour will not affect existing federal contracts, only new ones. Moreover, contract renewals will not be affected unless other terms of the agreement change.

The order would be one of the biggest examples in the State of the Union of Obama's vow to use presidential authority to push for policies by circumventing Congress.

Obama has been under pressure from liberal groups and employee advocates to use his executive authority to raise the minimum pay for federal contractors. By limiting the increase to new contracts, the order would affect far fewer employees than if it applied to all government contractors.

Still, the issue dovetails with what will be Obama's broader call for Congress to increase the national minimum wage to $10.10 and tie future increases to inflation. Obama called last year for an increase in the minimum wage to $9. This year he is lending his support to legislation sponsored by Democratic Sen. Tom Harkin of Iowa and Rep. George Miller, D-Calif. Their bill also would raise the minimum wage for tipped workers for the first time in more than two decades.

Increasing the wage for federal contractors does not require congressional action.

House Speaker John Boehner, R-Ohio, said Tuesday that such a unilateral increase is bad policy that will hurt the people Obama says he wants to help, by costing low-income people their jobs. Boehner said Obama took an oath to obey the Constitution and that Republicans will be watching to make sure he doesn't exceed his authority with other executive actions.

The White House said those who would benefit from the executive order include federally contracted janitors and construction workers as well as workers on military bases who wash dishes, serve food and do laundry.