President Obama on Monday proposed a two-year freeze of all pay for federal workers, excluding military personnel, in his first major post-election move to show seriousness about spending restraint and debt and deficit reduction.
“We need to turn our attention to addressing the massive deficits we inherited and the unsustainable fiscal course that we are on. Doing so will take some very tough choices,” said White House communications director Dan Pfeiffer. “Just as families and businesses around the nation have tightened their belts so must their government.”
Jeffrey Zients, the deputy director of the Office of Management and Budget, said the government will save $28 billion over the next five years and $60 billion in the next decade with the pay freeze.
There is one loophole: federal employees in some brackets of the federal pay scale will still receive raises if they receive a promotion.
Members of Congress and their staff are also not impacted by the proposal. Congress sets its own pay.
First responses from Republicans mixed faint praise with calls for more.
“At a time when our nation’s seniors have been denied a cost-of-living-increase and private sector hiring is stagnant, it is both necessary and quite frankly, long over-due to institute a pay-freeze for the federal workforce,” said Rep. Darrell Issa, California Republican.
Many conservatives think government pay, which on average is higher for similar jobs in the private sector, should be cut.
“Another step would be to call in an outside human resources firm to audit the federal pay methodology, particularly the mysterious formula used to calculate the federal ‘pay gap,’ which purports to show that federal workers are grossly underpaid,” said Chris Edwards of the Libertarian Cato Institute.
Obama’s announcement is the opening salvo in what promises to be the dominant policy and political debate of the coming year, and potentially the year or years after that, as both Democrats and Republicans will seek to find ways to solve the nation’s fiscal problems while gaining an upper hand in the eye of the public as the true representative of fiscal restraint.
Obama’s announcement also comes two days before the president’s deficit commission announces its findings.
Zients said the pay freeze decision was difficult to make but alluded to the long road ahead of cutting spending and reducing the nation’s debt and deficit.
“We believe it’s the first of many difficult steps,” Zients said.
The White House said in a fact sheet that “this freeze is not to punish federal workers or to disrespect the work that they do.”
Zients said the freeze was not made because they believe federal compensation has grown too rapidly, especially compared to the private sector. Average government salaries and benefits have continued to grow in recent year while the private sector has lost high numbers of jobs.
This article has been updated.