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Obama's budget would maintain federal workers' pay freeze

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President Barack Obama is unveiling his $3.73 trillion spending plan that is certain to ignite a political battle with Republicans who say the proposed budget is too timid about reducing the spiraling U.S. Debt. (Feb. 14)

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Washington Post Staff Writers
Monday, February 14, 2011; 8:05 PM

President Obama's proposed 2012 budget recommends a 1.6 percent pay increase for members of the military but keeps intact a two-year pay freeze for civilian federal employees.

The government's civilian employees are "patriots who work for the nation often at great personal sacrifice; they deserve our respect and gratitude," Obama's budget document said, but the ongoing freeze "reflects the shared sacrifices we must make."

Federal workers still will be eligible for bonuses, longevity-based raises or higher pay upon promotion. The freeze should save about $28 billion over the next five years by lowering the government's base compensation over the next two years, according to the White House.

Obama's pay proposals ignore recommendations made by the bipartisan fiscal commission to freeze federal civilian and military pay for three years. It also ignores the long-standing push by some lawmakers and federal union leaders to ensure that troops and civilian employees receive the same pay increases each year.

The concept of pay parity "is appropriate given the valuable contributions they make in service to our country," said Maureen Beach, a spokeswoman for House Minority Whip Steny H. Hoyer (D-Md.), a leading pay parity advocate whose district is home to thousands of federal workers.

The administration's proposals say nothing about what should happen to civilian and military pay after fiscal 2012, meaning the administration could ask next year for either a raise or a prolonged freeze for 2013 and beyond. Federal workers received a 2 percent pay bump in 2010, a 3.9 percent raise in 2009 and a 3.5 percent increase in 2008.

Even before Congress tackles fiscal 2012 funding, lawmakers must set spending levels for the remaining seven months of the current fiscal year. A plan released Friday by House Republicans would curtail this year's federal employee spending by targeting salaries and expense accounts at numerous agencies. Doing so would put pressure on accounts that pay for salaries, travel, training and other overhead spending. In such situations, agencies commonly resort to hiring freezes. The GOP proposals would not directly impact salary levels because pay is set by separate law.

The administration's budget also defended the generally higher rate of pay for federal employees. Citing statistics from the Census Bureau's Current Population Survey, it noted that more than half of federal employees work in the nine highest-paying occupations (lawyers, judges, engineers, pilots, scientists, human resources managers, nuclear plant inspectors) compared with just less than a third of private-sector workers.

Federal compensation "receives a great deal of public scrutiny," but raw comparisons between average federal pay vs. average private sector pay "mask important differences" in skill sets, work complexity and exposure to personal danger, the document said.

But the government's payroll is also higher because federal employees are older and more expensive , said Chris Edwards, a Cato Institute budget analyst.

"One advantage of reducing federal pay would be to encourage turnover and bring more young people who cost less and have new ideas into the government," Edwards said.

Federal worker union leaders, who strongly disagreed with Obama's pay freeze, were pleased with Monday's proposals. John Gage, president of the American Federation of Government Employees, said he was grateful the budget would not change worker health insurance or retirement programs.

Obama's budget says little about federal benefits. If his plan is adopted, active and retired federal workers would expect no change in retirement benefits, health insurance cost-sharing or other reductions. i.

His budget does, however, seek to reduce, through tighter management, prescription drug costs in the federal employee health insurance program.

Congressional Republicans, however, may still target worker benefits, as the fiscal commission recommended basing civil service retirement payments on the five highest paid years of an employees work instead of the three highest. Such a change would reduce a Civil Service Retirement System annuity by an average of $7,148 over five years, according to the National Active and Retired Federal Employees Association. A Federal Employees Retirement System annuity would be cut by an average of $2,322 during the same period, the group said.

ed.okeefe@washingtonpost.com yodere@washpost.com


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