By Rachel Rose Hartman
Mon Nov 29
President Obama announced Monday that civilian federal workers’ salaries will be frozen for two years to help cut federal spending.
In announcing the decision, Obama stressed the sacrifices made by the armed services and said: “These are also times where all of us are called on to make some sacrifices. And I’m asking civil servants to do what they always do and play their part.”
The president added that the decision was not easy. The White House estimates that the freeze, which does not affect military personnel, will save $2 billion for the remainder of the 2011 fiscal year, $28 billion over the next five years and more than $60 billion over the next 10 years.
[Related: Salaries of the Obama White House]
Obama’s announcement comes at a crucial political time for the president. He is scheduled to sit down with Republican congressional leaders Tuesday to discuss the economy, the upcoming lame-duck session and other issues. The pay freeze may help him gain favor with some of the fiscal conservatives in Congress whom Obama is hoping to tap for some key White House economic measures, including extension of tax cuts for the middle class, defense appropriations and plans to fund the federal government.
Fiscal conservatives have made federal salaries a major target. Before Monday’s White House announcement, budget hawks had planned Tuesday to propose significant federal spending cuts — a move that Obama has headed off for the moment.
Recent news reports have fueled public outrage over what federal workers are paid. USA Today reported this month that the number of federal workers earning $150,000 or more has doubled since Obama took office.
The president had originally announced a plan to raise 2 million federal workers’ pay 1.4 percent.
In context, the pay freeze itself represents only a small fraction of the federal deficit, but it was among the recommendations in the preliminary report from the president’s deficit commission. The commission’s full report is due Wednesday.
The issue of public employee salaries and retirement benefits has already played out as a major issue in many cash-strapped states around the country:
* In California, where pension debt is considered the largest driver of the state’s soaring budget deficit, Republican Gov. Arnold Schwarzenegger reached agreements with some unions to cut pensions for new state hires.
* In Minnesota, Republican Gov. Tim Pawlenty signed legislation this year to overhaul public employee pension plans.
* And in Wisconsin, state workers will soon begin paying into their pension funds instead of having it fully covered by the state.