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President Obama Proposes Freeze on Federal Civilian Employee Pay for 2 Years

by Ian Smith |

In a speech this morning, President Obama proposed a 2 year freeze on civilian employee pay to affect all civilian employees, including those in the Department of Defense, but it will not affect military personnel.

The White House said Monday that the freeze will save $2 billion for the remainder of FY 2011, $28 billion over the next five years, and more than $60 billion over the next 10 years.

The White House press release states that the measure is necessary due to irresponsibility of the past decade, including the President inheriting a “$1.3 trillion projected deficit upon taking office and an economic crisis that threatened to put the nation into a second Great Depression.”

The statement continues: “We need to turn our attention to addressing the massive deficits we inherited and the unsustainable fiscal course that we are on. Doing so will take some very tough choices. Just as families and businesses around the nation have tightened their belts so must their government…That is why the President has decided to propose a freeze in civilian pay for federal employees for two years, 2011, and 2012.”

Some readers have asked if this affects members of Congress.  According to an Associated Press article about the pay freeze proposal, it would not cover Congress, however lawmakers voted last April to freeze the pay of Congressional members with both the House and Senate both voting to forgo an automatic $1,600 annual cost of living increase. Members of Congress currently make $174,000 per year and last saw a pay increase of $4,700 per year at the start of 2009.

The pay freeze would also not affect step increases or bonuses for federal employees. It would go into effect on January 1, 2011 provided it is approved by Congress prior to that date.

President Obama will meet with Republicans this week to discuss the deficit, and the National Commission on Fiscal Responsibility is also meeting on Wednesday.  The President stated, “Going forward, we’re going to have to make some additional very tough decisions that this town (Washington) has put off for a very long time, and that is what this upcoming week is really about.”

We will continue to keep readers informed about any decisions or proposals that may arise this week that would be likely to affect the federal workforce.
Attachments

Press release from White House on civilian employee pay freeze (PDF)

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Ian Smith

Ian Smith is one of the founders of FedSmith.com. He writes about current topics that impact federal employees.

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