But he defended the freeze proposed in Trump’s fiscal 2019 budget plan, saying, “We’re going to freeze everybody, and then put a bunch of money in this pot to try to give us the flexibility necessary to reward the people that were really performing well.”
Some employees “might be really good at their jobs,” he added, “and some of the might not be, yet we . . . come close to paying them pretty much the same. ”
Mulvaney indicated that the General Schedule (GS), the federal pay system for 70 percent of federal employees, has outlived its usefulness. It was created in 1949 and “hasn’t really been dramatically overhauled since then,” he said. “And it’s led to a situation where we pay entry level more than we probably should, but we don’t pay the really advanced, experienced people as much as we should.”
But Trump’s budget proposal would reduce compensation in several ways for all feds, even those Mulvaney says aren’t paid enough.
When the administration released its spending plan, we outlined five ways it would cut compensation:
- Freeze pay in 2019
- Slow “tenure-based ‘step-increase’ promotions,” while increasing pay for performance
- Reduce government payments to federal employee retirement plans and increase employee out-of-pocket contributions
- Cutback on employee vacation time and sick leave
- Decrease the interest rate on the “G Fund,” an investment fund in the Thrift Savings Plan for federal employees.
Actually, there are more than five ways, because the plan to reduce retirement benefits alone has four ways to upset employees.
Mulvaney reminded committee members that employees at the Consumer Financial Protection Bureau “can make so much more money” because they, like staffers at certain other regulatory agencies, are not covered by the General Schedule.
Tony Reardon, president of the National Treasury Employees Union, warned against “efforts to gut banking regulatory agencies’ ability to recruit and retain the best qualified attorneys, examiners, accountants and other financial experts.”
The proposed pay freeze is “an affront to the men and women of the civil service,” he told the Federal Insider. “To label a pay freeze during a healthy economic period as civil service reform is laughable.”
Meanwhile, if the proposed pay freeze, after a three-year partial pay freeze during the Obama administration, isn’t enough to discourage federal employees, EPA Administrator Scott Pruitt has his own recipe to stifle agency morale.
Pruitt, who generates scandals like a spring lawn grows weeds, has made sure a few favorites will be warmly compensated even if the freeze leaves others shivering. A “management alert” to Pruitt, from EPA’s Inspector General Arthur A. Elkins Jr. on Monday, said five agency employees were given raises ranging from 20.9 to 72.3 percent.
“I have never seen it this bad in all of my years of federal service — a pay freeze for some employees, but not for the chosen few working in the administrator’s office,” said Denise D. Morrison, a 40-year federal employee, 33 of them with EPA, speaking in her role as executive vice president of the American Federation of Government Employees and the National Council of EPA Locals #238.
“This is discouraging for employees that come to work every day believing they will be compensated fairly for their contributions to the organization,” she said. “There are employees still fighting for equal pay for equal work, and large raises are being handed out just because of nepotism in the administrator’s office.”
EPA defended the huge pay raises. An email from spokesman Jahan Wilcox said “salaries are based on work history; and, any increases are due to either new and additional responsibilities or promotions. Salary determinations are made to avoid disparities among positions of equivalent or similar responsibilities, to the extent possible.”
But Rep. Gerald E. Connolly (Va.), the top Democrat on the House Government Operations Subcommittee, isn’t buying the EPA line on pay raises for a favored few.
“This behavior is deeply demoralizing for our rank-and-file federal employees who are on the front lines protecting public health and the environment, but sadly it’s what we’ve come to expect from the Trump administration,” he said. “Once again, we learn EPA Administrator Pruitt is handing out raises to his allies while he simultaneously advocates draconian cuts to his own agency and supports the White House’s pay freeze.” Government operations subcommittee Chairman Mark Meadows (R-N.C.) did not respond to a request for comment.
Speaking of demoralizing, Mulvaney told the panel he hadn’t even heard of one small agency, the Federal Labor Relations Authority (FLRA), which plans to close two of seven field offices under Trump’s reorganization plans.
“It is disappointing to hear that Director Mulvaney has not heard of the FLRA, particularly given that the plan to close Boston and Dallas is linked to his memo on streamlining the federal government,” said Ernest DuBester, the Democratic appointee to the three-member authority. It resolves issues between federal unions and agencies.
“Nobody knows better than OMB the sacrifices we have made in terms of reductions in personnel and reductions in physical space,” he added. “We have saved the federal government millions of dollars already by our practice of fiscal responsibility in recent years.”
FLRA Chair Colleen Duffy Kiko declined to comment.