Extending Pay Freeze Until 2015? Spending Reduction Bill Becomes Public

By on January 26, 2011 in Current Events with 117 Comments

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In the State of the Union address, President Obama said:

“So tonight, I am proposing that starting this year, we freeze annual domestic spending for the next five years. This would reduce the deficit by more than $400 billion over the next decade, and will bring discretionary spending to the lowest share of our economy since Dwight Eisenhower was president. This freeze will require painful cuts. Already, we have frozen the salaries of hardworking federal employees for the next two years. I’ve proposed cuts to things I care deeply about, like community action programs.”

Will There Be A Five Year Federal Pay Freeze?

Does this mean that the President would support a five-year federal employee pay freeze when proposing to freeze annual domestic spending for five years?

Perhaps the speech is just providing something for everyone. Perhaps he is trying to sooth his union supporters by implying that the two year freeze was a sop to those that wanted a longer pay freeze for the federal workforce (or, perhaps, it is an implied threat–“don’t give me a hard time on other issues or we will freeze pay for five years through Congressional action.”)

Some will conclude that calling for a freeze on domestic spending automatically includes a five year freeze on federal salaries.

Politicians and interest groups on both sides will speculate as they see fit to support their respective positions.

But, as often happens, there is a confluence of events coming together that will have an impact on our readers regardless of the President’s intent with regard to the pay freeze.

We recently posted an article entitled Five-Year Pay Freeze for Federal Employees?

Several readers commented it was not certain that the legislation would extend the current pay freeze–and voiced their opinion that it was a spending freeze but not a pay freeze on federal employee pay. Others upbraided us for not publishing the bill so they could read it for themselves.

The bill was made available today for the first time. Previously, we only had a summary of the bill provided by the Republican Study Committee. 

So, now that the bill has been published, and we have made a copy available to readers, what information does the bill provide on a federal pay freeze?

For those who were thinking that the bill does not really call for an extension of the federal pay freeze, check out the title of one section: Section 401: Extension of Federal Employee Pay Freeze. In this section, the pay freeze would be extended until 2015. Perhaps this is what the President was referring to in his speech or perhaps it was not. In any event, it is contained in this bill that has been introduced in the House with 24 co-sponsors listed in the introduction to the bill.

Reducing the Size of the Federal Workforce 

And, as noted in our earlier article, the bill would cut the civilian workforce by 15% through attrition. The recommendation would allow only one worker to be hired for every two that leave until the reduction target has been met. 

“Official Time” for Federal Union Representatives 

In addition, the Spending Reduction Act would eliminate “official time” for federal employee union representatives.

Government unions on federal, state and local levels have recently been the subject of intense scrutiny for their role in the unsustainable spending levels of governments. The prohibition against spending taxpayer money to pay the salary and benefits of a federal employee who is being paid a full federal salary and benefits while working as a union representative is likely to find a favorable reaction among some taxpayers–most of whom are unaware of this benefit given to federal unions by the Civil Service Reform Act of 1978.

As Bob Gilson noted in a previous article: “The OPM report states that, government-wide, 2,893,922 hours of official time were reported used in FY 08. That’s an interesting number in itself. Most Agencies will tell you, or at least they used to tell you, that union official time use was one of the most under-reported things in America. Perhaps second only to movie star ages.”

About Those Delinquent Tax Payments… 

The bill would also require that any federal employee pay up any taxes owed to the federal government. While this would seem obvious, this provision will be politically popular by itself. The reality is that some current employees and federal retirees owe considerable money to the the government that is providing a paycheck. In fact, federal employees reportedly owe $3.3 billion in back taxes to Uncle Sam while employed. The bill would require: An individual who has a seriously delinquent tax debt shall be ineligible to be appointed, or to continue serving, as a Federal employee. 

Selling of Government Property 

The bill would also require selling some government property. The bill states: “For the fiscal years 2011 through 2020, the Director (of OMB) shall dispose of real property generating proceeds of not less $19,000,000,000 under the Federal Real Property Disposal Pilot Program.”

President Obama also reflected this theme and raised the Republican call to sell property. He stated: “We’re selling acres of federal office space that hasn’t been used in years, and we will cut through red tape to get rid of more. But we need to think bigger. In the coming months, my administration will develop a proposal to merge, consolidate, and reorganize the federal government in a way that best serves the goal of a more competitive America. I will submit that proposal to Congress for a vote – and we will push to get it passed.”

There are plenty of opinions about how closely the White House and the Congress will work together on issues, including a reduction in federal spending. It is, of course, all about politics and President Obama wants to win another term in the 2012 elections and the Republicans want to win control of Congress and the White House. 

Pay and Benefits on the Bargaining Table 

What is clear is that federal employee pay is on the bargaining table. And, with the deficit commission proposals to reduce federal spending having been issued recently, it is likely there will be negotiations on the future of federal employee benefits as well. 

2011 should be an interesting year for the federal workforce and federal retirees. 

 

© 2016 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written consent from Ralph R. Smith.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters onĀ federal human resources.

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