Pres. Obama Proposes Federal Worker Pay Freeze

President Obama proposes a two-year pay freeze for federal civilian employees.

ByABC News
November 29, 2010, 2:33 PM

WASHINGTON Nov. 29, 2010— -- President Obama proposed a two-year pay freeze for federal civilian employees on Monday. The announcement is the latest move intended to demonstrate the administration's commitment to reduce the soaring deficit.

"The hard truth is that getting this deficit under control is going to require some broad sacrifices, and that sacrifice must be shared by the employees of the federal government," Obama said.

"Small businesses and families are tightening their belts," the president added. "Their government should too."

If Congress approves, the freeze would do away with a 1.4 percent pay raise in 2011 for all civilian federal government employees. The freeze does not apply to the armed forces, though it does affect civilian employees of the Department of Defense. It also does not apply to congressional workers or members of Congress, who voted to freeze their own pay last April.

Monday's announcement is in line with the budget proposal released by the president's bipartisan deficit commission earlier this month. That proposal recommended a three-year freeze and included non-combat pay for members of the military.

"I think it is the right kind of thing, people are no longer denying that this enormous debt problem is out there," said Erskine Bowles, co-chair of the commission. "The federal government now realizes we have to take steps like this to bring this deficit down or we are going to face the most predictable economic crisis in history," he added.

The administration said the move, which would take effect Jan. 1, would save $2 billion over the rest of this fiscal year, and $28 billion in cumulative savings over the next five years. Those numbers, however, seem miniscule when compared to the national budget deficit which topped $1 trillion last year.

"A federal pay freeze saves peanuts at best and, while [Obama] may mean it as just a public relations gesture, this is no time for political scapegoating," the American Federation of Government Employees said in a statement Monday. "The American people didn't vote to stick it to a VA (Veterans Affairs) nursing assistant making $28,000 a year or a border patrol agent earning $34,000 per year."

Deficit commission co-chair Alan Simpson, however, said small savings add up over time, and added there are "more things to come."

"Everybody is going to take a chop here there'll be no stone unturned," Simpson said.

On an individual level, the president acknowledged that the cuts will create difficulties for workers.

"This is not just a line item on a federal ledger, these are people's lives," said Obama.

The president's announcement comes as something of a pre-emptive strike against congressional Republicans, who plan to cut federal pay and workforce next year. Republicans have pushed for a pay freeze in the past. Most recently, Senator-elect Rand Paul (R-Ky.) and Sen. Jim DeMint (R-S.C.) claimed federal employees make $120,000, double the average private sector employee. The six-figure salary appears to be inflated, though some experts maintain that on average, government workers are overpaid.