Obama proposes two-year pay freeze for federal workers

Washington Post's Lisa Rein talks to federal workers about President Obama's proposal to stop pay increases for two million federal employees.
By Lisa Rein and Perry Bacon Jr.
Washington Post Staff Writers
Tuesday, November 30, 2010; 12:46 AM

President Obama on Monday announced a two-year pay freeze for most of the 1.9 million civilians who work for the federal government, as he tried to address concerns over a mushrooming deficit and placate Republicans who have targeted the workforce for big cuts.

"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 White House speech. He called federal workers "patriots who love their country" and said the cut is not just "a line item on a federal ledger." But he said he is asking federal workers to sacrifice for the country as "they've always done."

The president's proposal comes just before a fiscal commission he appointed is scheduled to issue a final report Wednesday on how to staunch deficit spending. The panel's leadership has recommended a three-year pay freeze for most federal workers.

The freeze, which must be approved by Congress, would be the first two-year halt to federal raises in modern history. With health insurance premiums for civil servants set to jump 7.2 percent on average next year and a federal transit subsidy to be cut by half Dec. 31, the plan will amount to a pay cut for many workers.

But the freeze is a largely symbolic move to address a federal deficit that will top $1 trillion next year. It is estimated to save just $2 billion over the next year.

"You could always count on your increase," said Danielle Swain of Manassas, an analyst for the foreign export service of the Agriculture Department who is nervous about the cut to her commuter-rail subsidy. "If you don't get a bonus, this is all you get. They're picking on the government because they assume we sit around and don't do anything. Well, it's not true."

The last freeze to federal pay came in 1986, and it was for one year. President Bill Clinton proposed skipping the 1994 raise but was rebuffed by Congress.

Obama's proposal would apply to nearly all federal civilian workers, including 600,000 in the Washington area, for 2011 and 2012. Defense Department civilians would be included but uniformed military personnel exempted. The government would save $5 billion over the two years, White House officials said; the savings would grow to $28 billion over five years because future salary increases would be set from a lower base, said Jeffrey Zients, deputy budget director and the government's chief performance officer.

Civil servants still will be eligible for bonuses and promotions to higher pay grades. However, John Berry, the government's personnel chief, said the White House has told federal managers to ensure that bonuses are "truly performance based" amid what he expects to be a declining pool to reward good workers.

Federal employees were scheduled to receive a 1.4 percent across-the-board raise in 2011.

Rochelle Diamond, a program analyst for the Agriculture Department, said that raise would have been insignificant anyway. But on principle, she's mad that Republicans have, in her view, pushed the president to take aim at federal workers. "I look at those Republicans who are forcing his hand, and I think, 'We should be looking at what they make and start there,' " Diamond said.

The move comes amid a festering debate over pay and benefits of federal workers that became an issue on the campaign trail this fall. Congressional Republicans and other critics have said the workforce is being shielded from an economic downturn that has left millions of Americans at private companies facing layoffs and pay cuts.

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