IN THE BUDGET for next fiscal year that he sent to Congress in February, President Reagan proposed a 5 percent pay cut for federal employees. We opposed it. Now Congress and the president have fastened instead on a freeze in the pay of civilian employees. It would be the only such freeze in recent memory, and we are sensitive to the arguments against it. It would have an especially heavy impact in this area. We nevertheless think it is the right thing to do.
The reason is the deficit. It will be in excess of $200 billion this year. It has to come down or it will bring down the economy. Congress claims to have put it on a declining path in the budget resolution adopted before its vacation. We are dubious about what that resolution will actually achieve; we wanted stronger. That was why we endorsed proposals to freeze both Social Security benefits and the defense budget next year. These were the freezes that counted, and we regret that Congress failed to adopt them. But the same logic that argued in favor of these continues to argue in support of the freeze on pay.
The debate over federal pay and other forms of compensation has become an annual affair. It is routinely distorted by political mythology. The federal budget has grown very large, and so, in many areas, has federal power. But the bureaucracy has not, and the cost of keeping it is a much smaller part of the budget than most people, egged on by presidents and other politicians, believe.
The bureaucracy is a better political punching bag than it is a budget target. The federal government had 2.4 million civilian employees at the end of the Eisenhower administration; it has something over 2.8 million now. Then they made up about 28 percent of all government employees (federal, state and local); now they make up about 17 percent. Then there were 13 federal employees for every 1,000 citizens; now there are 12. Total compensation costs for current civilian employees will be about $70 billion this fiscal year (plus $24 billion in benefits for civilian retirees). That is less than a tenth of the budget.
A pay freeze still saves. In various parts of the private sector -- autos, steel, the airlines, trucking -- workers have been squeezed in the last few years. In many cases those who have kept their jobs have had to give back past gains. Many were laid off. The purchasing power of an average hour's pay in the private sector is back where it was in 1968. Federal employees do not face foreign competition and were insulated from the recession. They can give a little ground.
And, of course, a freeze does not mean everyone's pay will be frozen. The step increases that come almost automatically with seniority will still be given. About a third of ciilian employees get these each year; they average around 3 percent. Freezes are always crude devices, but this one comes with foot warmers. Let it happen.