By Ed O’Keefe, Perry Bacon and Joe Davidson
Bowing to growing budget concerns and months of Republican political pressure on federal pay and benefits, President Obama today announced he would stop pay increases for most of the two million people who work for the federal government.
The freeze applies to all Executive Branch workers — including civilian employees of the Defense Department, but does not apply to military personnel, government contractors, postal workers, members of Congress, Congressional staffers, or federal court judges and workers.
“Getting this deficit under control is going to require some broad sacrifices and that sacrifice must be shared by the employees of the federal government,” Obama said in a speech Monday afternoon explaining the decision. He added, “I did not reach this decision easily, this is not a line item on a federal ledger, these are people’s lives.”
The freeze would take effect on Jan. 1, pending Congressional approval by the end of this year. The 2012 pay freeze will be proposed as part of fiscal 2012 budget proposals to be unveiled early next year.
The pay change will not impact bonuses for federal workers or when a federal worker is promoted to a new level of pay, meaning federal workers promoted in the next two years will receive a new level of pay, but not receive any additional annual raises.
Colleen M. Kelley, president of the National Treasury Employees Union, said she disagreed with Obama’s decision.
The union “is mindful of our nation’s economic circumstances, but we are very disappointed with the White House’s position and intend to explore all of our options, including working with Congress to overturn it,” Kelley said. The union represents more than 150,000 federal employees nationwide.
John Gage, president of the American Federation of Government Employees, blasted the announcement, calling it “a superficial, panicked reaction to the deficit commission report.”
“This pay freeze amounts to nothing more than political public relations,” Gage said in a statement, suggesting government nurses, border patrol agents and other personnel are being unfairly targeted for Democratic election losses.
The decision will save the government about $2 billion for the remainder of fiscal year 2011 and $28 billion over the next five years, the White House said. The long-term savings come from lowering the government’s base compensation over the next two years.
Obama made the announcement Monday because Tuesday is the deadline to set federal locality pay, or variations the government makes in pay and benefits based on geographic location, officials said.
House Majority Leader Steny Hoyer (D-Md.), whose district is home to thousands of federal workers, said he was pleased Obama instituted only a two-year freeze instead of the three years proposed by the Bipartisan Deficit Commission. But Obama also should have cut pay for some military personnel, Hoyer said in a statement.
“There has been parity between civilian and military pay raises for 22 of the past 28 years in which raises were authorized, and hundreds of thousands of federal civilian employees work alongside military employees in the Department of Defense and other agencies,” Hoyer said, noting that the first American casualty in the Afghanistan conflict was a civilian CIA agent.
Jeffrey Zients, deputy director of the Office of Management and Budget, said the freeze is “The first of many difficult steps ahead.”
“Clearly this is a difficult decision,” Zients told reporters ahead of Obama’s official announcement. “Federal employees are hard-working and dedicated and essential to delivering services to the American people. Today the president is clearly asking them to make a sacrifice.”
Obama has already frozen the salaries of top White House officials and top political appointees. But freezing the salaries of all civilian workers is a much bolder step that will result in a big economic hit to the Washington region, which is home to more than 600,000 federal workers and their families.
Officials said the decision was not in response to Republican and fiscal conservative critics who have argued that federal employees are better paid than private sector counterparts. “This is in the context of difficult decisions that we need to make as part of deficit reduction,” Zients said.
In a statement, Rep. Darrell Issa (R-Calif.), presumptive chairman of the House committee overseeing federal personnel issues, called Obama’s decision “long overdue.” He called on the president to institute other government spending cuts proposed in the GOP’s campaign “Pledge to America”.
In addition to cuts outlined in the Pledge, Republican lawmakers have introduced several proposals to cut federal pay and benefits and curtail the size of the federal workforce, including cuts to the government payroll through attrition or firing federal workers who fail to pay taxes.
During an October interview just weeks before the midterm elections, Obama signaled a willingness to consider pay and hiring freezes as a way to rein in government spending.
The administration had examined pay levels, “and the data we get back indicates that high-skilled workers in government are slightly underpaid. Lower-skilled workers are slightly overpaid relative to the private sector,” Obama said.
“And that’s not surprising,” he added, “because it’s a unionized workforce” in government, while the private sector typically is not.
“Government should have to tighten its belt as well. We need to do it in an intelligent way,” Obama said in October. “We need to make sure we do things smarter, rather than just lopping something off arbitrarily without having thought it through.”