President extends federal pay freeze

August 21, 2012

President Obama told congressional leaders Tuesday that he is extending a two-year pay freeze for federal employees until at least next spring because Congress has not agreed on a budget for the next fiscal year.

The freeze will stay in effect until a spending plan is passed, but the presidential election makes it unlikely that will happen before the start of fiscal 2013 on Oct. 1. As a result, the president is required by the end of August to come up with an “alternative pay plan” to avoid a legal trigger that would automatically raise federal pay in line with private-sector salaries. The alternative pay plan is usually a routine event signaling that Congress and the White House have agreed on a salary increase for federal workers.

With no budget, the freeze will stay in place until at least April, when a short-term spending deal that congressional leaders reached before their August recess to fund the government for six months runs out. The short-term agreement keeps spending at current levels and is silent on the federal pay freeze.

In a letter to House and Senate leaders, the president reiterated his support for ending the pay freeze with a 0.5 percent raise, to take effect Jan. 1, 2013, that he proposed early this year.

“Civilian federal employees have already made significant sacrifices as a result of a two-year pay freeze,” Obama wrote. “As our country continues to recover from serious economic conditions affecting the general welfare, however, we must maintain efforts to keep our nation on a sustainable fiscal course. This is an effort that continues to require tough choices and each of us to do our fair share.”

Union leaders were furious, calling the decision to extend an already drawn-out pay freeze unjustified.

“The well is dry, Mr. President,” J. David Cox Sr., the newly elected president of the American Federation of Government Employees, said in an interview.

“This is a president who has said he wants to end the freeze,” Cox said. “It’s unconscionable.” AFGE is the largest federal employee union.

The temporary spending agreement does not resolve an election-year debate between Democrats and Republicans on the scope and cost of government and how much federal employees should sacrifice during an economic downturn.

Under a law passed in 2010, salary rates are frozen for 2011 and 2012, although employees still can get raises upon promotion, as a performance reward or as they advance up the steps of their pay grades.

Cox said he and other union leaders had hoped the president would end the freeze by imposing the 0.5 percent raise, although the additional cost under the current budget would have required federal agencies to rein in their spending to compensate.

Cox called on the administration to negotiate a freeze in health-care premiums that would otherwise increase in January 2013.

“Federal employees cannot afford another four months or even another day of frozen wages,” Cox said. “The Veterans Administration nursing assistant struggling on less than $30,000 per year has already lost almost $2,000 during the last two years, while still facing rising health insurance premiums and annual increases in rent, child care and grocery prices.”

The pay issue has been put off but is still unresolved. The House has voted several times to extend the pay freeze by a year or more, and a budget resolution sponsored by Rep. Paul Ryan (R-Wis.), the GOP vice presidential candidate, calls for continuing the freeze through 2015.

The White House has objected to each measure in turn, advocating for the 0.5 percent raise.

Lisa Rein covers the federal workforce and issues that concern the management of government.
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