Just When You Thought It Was Safe! New Move in Senate to Freeze Feds’ 2006 Raise

A “Fiscal Watch Team” has been formed in the Senate to cut back on government spending. One target: The 2006 pay raise for federal employees.

Here is a new twist to a well-worn topic. The topic is freezing pay raises for federal employees. The new twist is a move in the Senate to accomplish this goal.

As we have noted in several articles recently, (See Federal Pay: The Good, Bad and Ugly) the federal employee pay raise is part of the political process. Unlike the COLA’s for retirees and the pay raise for military personnel, the yearly pay raise for executive branch employees is sometimes subject to vigorous debate in Congress and is eventually signed by the President. In past years, the President’s recommendation for a smaller pay raise has been overridden by Congress.

That may still happen this year. Both the House and the Senate have approved a 3.1% pay raise for federal employees in 2006. That still isn’t law as the appropriations bill with this provision is yet to be ironed out in a conference committee. And, of course, President Bush has not signed off on the law either.

In effect, it looks like the raise may go through but strange things can happen in our Republic as new laws are being passed.

This is not a normal year for government spending. Government expenses are rising rapidly. Discretionary federal spending has gone up 48 percent since 2001. Some federal agencies have much more money to spend on programs than they ever had.

But the recent natural disasters, the war in Iraq, and other legislation passed by Congress is creating fiscal problems. The deficit is growing and political pressure is building to cut government spending.

Now, seven Senators known as the “Fiscal Watch Team” have asked Congress to offset the costs of paying for damage from natural disasters along the Gulf Coast. One way to help offset these costs is to freeze the salaries for lawmakers and federal employees for 2006.

And, in a related development, President Bush also said yesteday he is willling to back the Senate effort to cut the federal budget.

Here is what the Heritage Foundation had to say about the proposal to freeze salaries for executive branch employees and lawmakers:

Lawmakers and federal employees should not exempt themselves from the sacrifices necessary to rebuild the Gulf Coast following Hurricane Katrina. A one-year salary freeze for lawmakers and federal civilian employees allows them to take part in the grand American tradition of sacrifice. This will save $2 billion in 2006.

The members of the Senate Fiscal Watch Team are John Ensign (R-NV), Sam Brownback (R-KS), Tom Coburn (R-OK), Jim DeMint (R-SC), Lindsey Graham (R-SC), John McCain (R-AZ), and John Sununu (R-NH).

Their goal is to cut government spending by $115 billion in the next two years.

The agenda for cutting spending, in addition to freezing federal employee salaries next year is straight-forward. Here is a quick summary.

Reduce non-discretionary spending by five percent across the board for the federal government. This has happened before. Between 1991 and 1996, discretionary spending was essentially frozen for the federal government.

The proposal also calls for delaying the new Medicare Drug Entitlement for two years. This change would save about $80 billion over two years.

Rescind highway bill “pork projects.” This would save approximately $24 billion over the next four years.

The proposal also calls for creating a government waste commission. The commission is called “CARFA.” This commission would be structured similar to the way military bases are closed. Congress would vote “up or down” on the entire list of suggestions as to how to cut back on government spending. There are currently 25 Senators who are co-sponsoring the CARFA legislation.

Senator Brownback said about the proposal to cut spending:

“I’m pleased to be a part of this team of senators dedicated to taking a stand against the culture of spending that grips Congress. Before we commit ourselves to significant new spending for hurricane victims, it’s imperative that we ask the question of where these funds will come from. There is no better time than now to find wasteful spending and redirect it to Americans who need it most.”

The bottom line on your 2006 raise: Don’t spend the money yet. Chances are the 3.1% raise will still go through but until the legislation is finalized and signed by the President, the deal is not done. Your 2006 raise may yet go in the direction of helping to cut the federal budget deficit.

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 on federal human resources. Follow Ralph on Twitter: @RalphSmith47