During the recent presidential election campaign, Joe Biden told Americans that “it was time to be part of the deal” and to be patriotic by paying higher taxes. He said he wanted to take more money from individuals and that giving this money to the government would help get America get out of its rut.
He was talking about higher taxes for those making more than $250,000 a year. But, with American’s soaring debt, the reality is that it will be necessary for the much larger group of middle class Americans to give the government more money to pay back the trillions that we now owe.
Politicians obviously prefer spending money to cutting back on government programs. It is easier to get elected (and usually less controversial) to ask people to vote for you when you are promising to give them something from government (more money, a job, better benefits, etc.) they would not get if the politician were not in office.
Eventually, it becomes more politically popular to cut back on government spending. When the political climate changes, we can expect that various groups will lose some of their benefits or money they are getting from the government. We can also expect vigorous disagreement from those who are impacted by the cuts in government spending. In fact, there have been proposals in recent memory to change the method of computing federal retirement benefits in order to save money for Uncle Sam (See How Safe Are Your Federal Benefits? Don’t Answer Too Fast)
Americans are certainly not unique as we have seen from the recent riots in Greece as the government there decided to cut back on some of the various programs.
Most of us in the federal community are relatively well-off although few make more than $250,000 a year. But, as we are well-off, and the income for current and retired federal employees is paid for out of government funds, it is not too surprising that federal employees will be a target for cuts in government spending.
That is now happening.
Senators John McCain (R-AZ) and Tom Coburn (R-AZ) have proposed to freeze salaries and bonuses for federal employees. There is probably little chance of their new amendment being enacted but readers should be aware of the initiative as, if it does pass, it will have an impact on federal employees.
According to Senator McCain, amendment 4231 to a new supplemental spending bill being considered in Congress would save taxpayers $59.6 billion by doing the following:
- Freezing raises, bonuses and salary increases for federal employees for one year ($2.6 billion)
- Collecting unpaid taxes from federal employees ($3 billion)
- Reducing printing and publishing costs of the government documents ($4.4 billion – over ten years)
- Reducing excessive duplication, overhead and spending within the federal government ($20 billion)
- Eliminating non-essential government travel ($10 billion – over ten years)
- Eliminating bonuses for poor performance by government contractors ($8 billion – over ten years)
- Repealing the Energy Star program ($627 million – over ten years)
- Eliminating increase in foreign aid for international organizations ($68 million)
- Limiting voluntary payments to the United Nations ($10 billion – over ten years)
- Striking unnecessary appropriations for salaries and expenses of a government commission Congress ignored, the Financial Crisis Inquiry Commission ($1.8 million)
- Rescinding a State Department training facility that was not requested by the community where it is to be constructed ($500 million)
In addition, amendment 4232 would allegedly save another $60.3 billion by taking these actions:
- Cutting budgets of members of Congress ($100 million)
- Disposing of unneeded and unused government property ($15 billion)
- Auctioning and selling unused and unneeded equipment ($250 million – over ten years)
- Rescinding unspent and uncommitted federal funds ($45 billion)
Here is the reaction from NARFE to the proposed amendments:
“We believe it is wrong to single out federal workers for cuts that others serving our country are not being asked to make. More specifically, why would the Congress take a punitive action against the thousands of federal civilian employees whom are working alongside their uniformed colleagues in Iraq and Afghanistan by requiring them to forgo a small salary increase to partially pay for the wars they are helping to win?… “If we are to make wise choices about putting our fiscal house in order, Members of Congress and the public need to be educated about the invaluable contributions made to our country by Americans who devote their careers to public service.”
The proposal is not surprising. Editorials and news articles have filled the media recently regarding the relatively high salary and benefits levels of federal employees as compared to the salary and benefit levels of most Americans. In fact, when we run these articles, there are always numerous complaints about the content of the articles and at least a few complaints about the FedSmith site even publishing them.
The reality is that we live and work in a political environment and, while there are employees organizations that are active in lobbying Congress in securing various benefits for the federal community, political change is likely to impact all members of the federal community in some way.
Chances are, these amendments will not pass in their current form. But, with the federal deficits continuing to increase, we can also expect some changes to impact current salaries and retirement income as well in the future. No one can predict what these changes will be but, as events change, we will keep readers informed.
Do you think that a freeze on federal employee salary levels for 2011 is justified? Do you think the amendment will pass?