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Obama to Freeze Federal Wages 2 Years

Treasury Check

“President Obama will announce a two-year freeze in the wages of federal employees Monday, with the intention of saving $60 billion over the next 10 years,” a CNN Breaking News alert informs me.

My initial question was, How the hell can he do that?  He’s got no authority to set civil service salaries.  Turns out, it’s merely a “proposal.”

According to an administration statement, the two-year pay freeze will save $2 billion for the remainder of fiscal year 2011, $28 billion over the next five years, and more than $60 billion over the next decade.

The freeze does not apply to military personnel, but will apply to all civilian federal employees, including those in various alternative pay plans and those working at the Department of Defense.

“This freeze is not to punish federal workers or to disrespect the work that they do,” the White House said in a statement. “It is the first of many actions we will take in the upcoming budget to put our nation on sound fiscal footing — which will ask for some sacrifice from us all.”

This will of course be very popular politically, since non-military federal employees are widely believed to be overpaid and underworked.  And, frankly, given that we have near-zero inflation, there shouldn’t be any cost of living hikes, anyway.

Indeed, it’s not clear how this proposal actually saves any money.  It’s not like this would roll back already-enacted pay increases.  Presumably, this is “saving” in the federal government sense of not getting a spending hike that you had previously mentioned wanting to have.

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About James Joyner
James Joyner is the publisher of Outside the Beltway, an associate professor of security studies at the Marine Corps Command and Staff College, and a nonresident senior fellow at the Atlantic Council. He's a former Army officer and Desert Storm vet. He has a PhD in political science from The University of Alabama. Views expressed here are his own. Follow James on Twitter.

Comments

  1. john personna says:

    Seems like a replay of our California history.  If I recall correctly, it failed in our courts.

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  2. Bill Bacon says:

    It “saves” money the same way that Democrats accuse Republicans of “cutting” school lunches – by bending the cost curve. If the President’s budget projects (for future fiscal years) 1.2 percent pay raises for the next three years, that has a certain ramification for the budget. Reduce those pay raises, and you “save” the money you budgeted for those future years.
    One minor quibble though James, the annual pay raises for federal employees isn’t based on the consumer price index, but on the employment cost index, delayed by, IIRC, a year. According to the Bureau of Labor Statistics, civilian, private industry workers salaries increased 1.4 percent for the 12 months ending September 2009. Not zero, but not terribly significant either.

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  3. jfoobar says:

    This is a very astute political move by President Obama on multiple levels and I have little doubt that this decision was made after some discussions with federal public sector labor union leadership.  Federal wages are in the crosshairs at the moment and this sort of fairly empty move will likely divert attention elsewhere while actually hurting federal employee pocketbooks very little.  It is also another move that seeks to demonstrate that Obama is serious about trimming spending.
    Federal employees should rejoice at this news.  It could have been much, much worse.
     

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  4. Franklin says:

    Semantics aside, it seems like a move in the right direction.  Of course this is a drop in the bucket compared to the looming Medicare (Medicaid?) debacle, but I’ll take it nonetheless.

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  5. [...] “My initial question was, How the hell can he do that?,” says James Joyner at Outside the Beltway. “[Obama's] got no authority to set civil service salaries.  Turns [...]

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  6. William J McKibbin says:

    Many in the US view government employees as the new “landed gentry” of American society.  A pay freeze of Federal wages is simply a gesture intended to placate that view.  What is needed is substantive (double-digit) cuts in the numbers of Federal employees in all agencies.  Moreover, consideration should be given to consolidating or eliminating entire government agencies (can we really afford to have a Department of Homeland Security AND a Department of Defense?).  The question that needs to be asked is how can the US expeditiously reduce the size of government by at least half.  More at:
    http://wjmc.blogspot.com/2010/07/americas-new-landed-gentry.html
    It’s time for the public sector to bear its share of the economic burden in the US…

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  7. [...] Beutler notes that President Obama’s plan to free federal employee pay is getting praised by Republicans but is wildly unpopular among progressive activists (aka [...]

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