Federal Employee Pay Likely to be Campaign Issue
by Ian Smith |
We’ve seen the political battle over federal employees’ pay and benefits intensify over the last few years. First, there was a pay freeze, then proposals to extend the pay freeze, then proposals to increase retirement contributions, and the list goes on.
So it should come as no great surprise that federal workers’ pay is poised to be an issue in the Presidential campaign this year.
Republican Presidential candidate Mitt Romney has said in the past on the campaign trail that the notion of federal employees getting better pay and benefits than the taxpayers they serve is fundamentally unfair.
Romney’s web site states that one of his goals as president will be to “Align federal employee compensation with the private sector” as part of reducing federal spending and improving the efficiency and effectiveness of the federal government. This point notes that federal compensation exceeds private sector compensation by as much as 30-40% (including benefits) and must be corrected, and doing so could save as much as $47 billion.
The Obama administration argues that this means that Romney wants a federal pay cut of up to 40%.
According to an article in USA Today, Obama campaign spokesman Adam Fletcher said of Romney’s plan, “To pay for tax cuts for millionaires and billionaires, (Romney) drastically cuts pay for the men and women who secure our borders and skies, enforce our laws, inspect our food, and search for better treatments and cure.”
The article noted that the Romney campaign countered by saying that the proposal isn’t for a 30-40% pay cut since federal employee compensation involves more than just take home pay and includes benefits.
Presumably this means one could expect to see proposals to cut benefits as well as pay from a Romney administration. Recent past proposals along these lines have increased the amount federal employees have to contribute to their retirement plan or set up a new retirement structure for newly hired workers.
The Obama administration is not against asking the federal workforce to sacrifice, however. The pay freeze was originally proposed by President Obama, and the White House’s 2013 budget proposal included a 1.2% increase over three years to the amount employees contribute towards their retirement.
How much federal employees are over or underpaid relative to the private sector depends on who you ask. Some studies have shown federal compensation exceeds private sector compensation by as much as 61%, while others show federal workers are paid, on average, 24% lower than comparable private sector workers. With variances that widespread, it leaves little room for doubt that the issue of federal compensation has become more of a political issue than anything else.
Regardless of what either side says about the issue, both Republicans and Democrats have used federal pay and benefits as a political tool during a time when federal debt and spending are spiraling out of control and it has become politically expedient to look for ways to cut spending. Consequently, the “perfect storm” surrounding federal employee pay and benefits we have outlined before isn’t likely to go away anytime soon.
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by Ian Smith |