Washington, D.C.-- President Barack Obama announced a two-year pay freeze for federal employees today, and warned the American public that the move is the first of many difficult decisions that must be made to reduce the nation's mounting deficits. It appears that this move is to gain leverage and approval from next year's Republican led Congress and it should not sit well with America's middle class families."The hard truth is that getting this deficit under control is going to require some broad sacrifice, and that sacrifice must be shared by the employees of the federal government," Obama said.
The freeze would apply to all civilian federal employees, including those working at the Department of Defense, but would not affect military personnel. The freeze is expected to save more than $5 billion in savings over two years, $28 billion over five years and more than $60 billion over 10 years, White House officials said.
Congress is not covered by Obama's order, but lawmakers voted last April to freeze their pay, with the House and Senate opting to forgo an automatic $1,600 annual cost-of-living increase. House members and senators now are paid $174,000 a year. Their last pay increase was $4,700 a year at beginning of 2009.
The president's pay of $400,000 a year was fixed by Congress in January 2001. It has not changed since then.
The savings from the pay freeze is a small dent in the nation's $1 trillion-plus budget deficit. But with voters supposedly voicing their anger over Washington's spending during the midterm elections, even a symbolic gesture would show the White House got the message. But once again, it's public employees who are taking it on the chin.
Obama and bipartisan congressional leaders will meet at the White House tomorrow for the first time since Republicans gained control of the House and increased their strength in the Senate during the midterm elections. Obama said he hopes the move to freeze federal pay sets a serious tone for the meetings.
"We're going to have to budge on some deeply held positions, and compromise for the good of the country," Obama said.
The co-chairmen of Obama's bipartisan deficit commission have proposed a three-year freeze in pay for most federal employees as part of its plan to reduce the nation's growing deficit. The commission's proposal also suggested cuts to Social Security benefits and higher taxes for millions of Americans to stem the flood of red ink that they say threatens the nation's very future. The popular child tax credit and mortgage interest deduction also would be eliminated.
The commission's final report is due to be released later this week. You can be sure that the report will include alarmist rhetoric and hyperbole. Logically, and in response to the over-the-top recommendations by the commission, you can also expect some fireworks from the working class and advocates of the poor.
Shortly after taking office in January 2009, Obama froze salaries of top White House aides. He proposed extending that freeze to political appointees across the government in last year's budget, and also eliminated bonuses for political appointees.
AFGE union responds
John Gage, president of the 600,000-member American Federation of Government Employees, called the decision "a slap at working people."
"Working people's wages are not the issue with this deficit or what is going on in our country," Gage said. "To symbolically hit at federal employees I think is just wrong."
Gage said the White House was using federal workers as scapegoats for the nation's deficit problems. He said the move would not really save as much as the White House claims because federal employees often get just a fraction of projected raises. Federal workers received a 1.9 percent pay increase this year.
