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Monday, November 29, 2010

Obama To Propose Pay Freeze For Federal Workers

H/T Memeorandum.

The New York Times' headline is slighting misleading when they state "Obama to Freeze Pay for Most Federal Workers," since Barack Obama does not have the authority to freeze wages of federal employees.

He can propose they be frozen though and that is more of an accurate description of what he is doing:


President Obama plans to announce a two-year pay freeze for civilian federal workers later Monday morning in his latest move intended to demonstrate concern over sky-high deficit spending.

The president’s proposal will effectively wipe out plans for a 1.4 percent across-the-board raise in 2011 for 2.1 million civilian federal government employees, including those working at the Defense Department, but the freeze would not affect the nation’s uniformed military personnel. The president has frozen the salaries of his own top White House staff members since taking office 22 months ago.

Emphasis mine.

Further down we see this is just the first steps as well as being given an idea of why federal employees will be the first hit.

The number of federal workers making more than $150,000 a year has grown ten-fold in the past five years and doubled since Mr. Obama took office, according to a USA Today study earlier this month. Since 2000, federal pay and benefits have increased 3 percent annually above inflation, compared with 0.8 percent for private sector workers, according to data cited by the newspaper.

CNN Money:

The freeze would not apply to military personnel, but would apply to all civilian federal employees, including those in various alternative pay plans and those working at the Department of Defense.

Federal workers shouldn't feel singled out: The White House says more tough choices are on the way.

"This freeze is not to punish federal workers or to disrespect the work that they do," the White House said in a statement. "It is the first of many actions we will take in the upcoming budget to put our nation on sound fiscal footing -- which will ask for some sacrifice from us all."

Very few reactions so far, but it looks like Conservatives will get behind this proposal and liberals, meh, not so much.

The two reactions so far have been from a conservative politician and one from liberal blogger.

Linked examples, Representative Darrell Issa (R., Calif.)states "It is both necessary and quite frankly, long over-due."

Liberal blogger Sean Paul Kelley over at The Agonist states "This is exactly the wrong thing to do in a deflationary environment. A terrible, terrible idea.

This is definitely (spare) Change we can believe in!"

Couple more reactions just showed up on the radar.

James Joyner from Outside The Beltway:

This will of course be very popular politically, since non-military federal employees are widely believed to be overpaid and underworked. And, frankly, given that we have near-zero inflation, there shouldn’t be any cost of living hikes, anyway.

Indeed, it’s not clear how this proposal actually saves any money. It’s not like this would roll back already-enacted pay increases. Presumably, this is “saving” in the federal government sense of not getting a spending hike that you had previously mentioned wanting to have.

Phillip Klein from AmSpec:

"..... On the other hand, it is a glimpse into how Obama plans to react to the Republican victory. He'll use, small, symbolic actions such as this to say he's being bipartisan and is aware of public anger over the growth of the federal government with out making any real concessions on anything that actually matters. This also is a way of stealing the thunder of Republicans, who were planning on pushing this idea.

Republicans, it should be said, have been calling for a federal hiring freeeze in addition to a pay freeze, and there's no indication from the news reports that Obama will get behind that idea."

No doubt more reactions will be forthcoming.

I wonder if this means no pay raises for Congress for the next two years as well?

[Update]Statement from Jack Lew,Director of the Office of Management and Budget at the White House Website.

As I wrote last week upon my return to the Office of Management and Budget, the fiscal and economic situation we face today is very different than the projected surpluses we left behind the last time I served as OMB Director in the 1990's. After years of fiscal irresponsibility, President Obama inherited a $1.3 trillion projected deficit and the worst economic downturn since the Great Depression.

The President and his economic team worked quickly to address the crisis, and we are seeing our economy recover – albeit more slowly than anyone would like. Families and businesses are still hurting, and too many who want to work are not able to find a job. Our top priority must be to do what we can to help boost economic growth and spur private sector job creation.

But to lay the foundation for long-term economic growth and to make our nation competitive for years to come, we must put the United States back on a sustainable fiscal course. And that’s going to require some tough choices.

Today, the President made one of those: proposing a two-year pay freeze for all civilian federal workers. This will save $2 billion over the remainder of this fiscal year, $28 billion in cumulative savings over the next five years, and more than $60 billion over the next 10 years. The freeze will apply to all civilian federal employees, including those in various alternative pay plans and those working at the Department of Defense – but not military personnel.

We are announcing this move today because tomorrow is the legal deadline to submit to Congress the President’s decision about locality pay, a key component of overall federal worker pay. In addition, we are in the midst of the 2012 budget process, and need to make a decision about pay to develop the 2012 budget. Simply, the time to decide about pay for those two years is now.

Make no mistake: this decision was not made lightly.

Like everyone honored to serve in the White House or the Cabinet, we work with extraordinarily talented public servants every day. Throughout my career in the Congress, at the State department, and here at OMB, I have met federal workers who have sacrificed more lucrative jobs and hours with their families - -and, in some cases, put their lives in harm’s way -- in order to serve their fellow Americans. Indeed, anyone who has flown safely, enjoyed our national parks, received a Pell grant to go to college, or relied on a Social Security check to retire in dignity has benefited from the service of federal workers.

This pay freeze is not a reflection on their fine work. It is a reflection of the fiscal reality that we face: just as families and businesses across the nation have tightened their belts, so must the federal government.

Already, the Administration has taken a number of steps in this regard as part of its Accountable Government Initiative from the President freezing the salaries for all senior White House officials and other top political appointees upon taking office to his efforts to get rid of $8 billion of excess federal real property over the next two years, reduce improper payments by $50 billion by the end of 2012, and freeze non-security spending for three years – which will bring non-security discretionary spending to its lowest level as a share of the economy in 50 years.

Moving forward, we will need to make many more tough choices to construct a plan to pay down these deficits and put our nation on sound fiscal footing. Later this week, the Fiscal Commission will release its report laying out its approach, and I look forward to working with people from across the spectrum on this challenge in the weeks to come.

Another misleading headline from The Politico "President Obama freezes federal pay," yet the caption on the photo as well as the article itself makes it clear 1) This is a proposal and 2) Congress must endorse the idea.

President Barack Obama on Monday proposed a largely symbolic freeze on pay for civilian federal workers for the next two years, staking out a moderate position in the looming debate over the budget deficit and the proper size of government.

If Congress endorses the idea, the freeze would save $2 billion in 2011 and roughly $6 billion a year over the next 10 years – a drop in the bucket of the federal budget deficit, which is expected to top $1 trillion this year and next year. With the president’s bipartisan deficit commission due to report this week as the number of deficit-reduction proposals multiply, Congress will debate both pay cuts and a reduction in the number of government employees and federal contractors.

Why are the headlines misrepresenting what is in the actual articles?

[Update] Other reactions reported by Fox News, link here.

House Republican Whip Eric Cantor (R-VA)makes this point:

"I am encouraged by President Obama's proposal to freeze non-military federal pay for the next two years. This past May, House Republicans-prompted by YouCut voters-offered the very same spending-cut proposal on the floor of the House. The YouCut proposal was one of many specific spending reductions offered by House Republicans over the past two years, and we are pleased that President Obama appears ready to join our efforts. As the recent election made clear, Americans are fed up with a government that spends too much, borrows too much and grows too much. "Many federal employees do important work, but this is exactly the kind of savings measure we have to make in order to begin to restore some fiscal sanity in America, especially considering recent reports of federal salaries significantly outpacing private-sector salaries. With so many Americans tightening their belts, Washington must do the same. "I hope that Democrats who are concerned about the debt and America's dire long-term financial health will join House Republicans in embracing President Obama's proposal and other YouCuts going forward. We have to work together if we want to transform the culture of spending in Washington into one of savings."

Going forward, you can vote on what programs you would like to see government spending cut as well as offering suggestions.


YouCut – a first-of-its-kind project - is designed to defeat the permissive culture of runaway spending in Congress. It allows you to vote, both online and on your cell phone, on spending cuts that you want to see the House enact. Each week, we will take the winning item and offer it to the full House for an up-or-down vote, so that you can see where your representative stands on your priorities. Vote on this page today for your priorities and together we can begin to change Washington's culture of spending into a culture of savings.

Go. Vote. Offer your own suggestions.