Federal Employee Pay Freeze: A Bill Clinton “Flashback?”

The author offers comments by a number of agency and union members of the National Council on Federal Labor Management Relations but finds no mention of the pre-decisional involvement of Federal employees or their unions in the decision to freeze Federal employee pay. Didn’t Executive Order 13522 require that? Is this a Bill Clinton flashback? You decide.

In a move reminiscent of the Clinton Administration’s tanking of a couple of hundred thousand Federal employees while Federal union leaders went to White House dinners, Mr. Obama announced a decision to propose a two year pay freeze on Federal civilian employees while a number of his political minions sit at National Council on Federal Labor Management Relations meetings with union leaders struggling with how to pre-decisionally involve them in executive branch-wide employee decisions.

All of that now may appear an expensive bone thrown to the leadership as the rank and file considers higher heath care insurance premiums with no pay increases. A net loss? Sounds like one, huh?

I thought you might find interesting the press releases from some of the players. As of this writing, the National Treasury Employees and the Federal Education Association (labor members) had not issued public statements. After you’ve read them, I have just a few comments.

What Council Members Had to Say



WASHINGTON – The American Federation of Government Employees today decried President Obama’s proposal to freeze pay for federal civilian employees in 2011 and 2012.

“This proposal is a superficial panic reaction to the draconian cuts his deficit commission will recommend,” stated AFGE National President John Gage. “A federal pay freeze saves peanuts at best and, while he may mean it as just a public relations gesture, this is no time for political scapegoating. The American people didn’t vote to stick it to a VA nursing assistant making $28,000 a year or a border patrol agent earning $34,000 per year.

“President Obama asks federal workers to share the sacrifice, but it’s unconscionable for him to attack the wages of federal working people while the millionaires and billionaires on Wall Street not only get their bailouts and astronomical bonuses; they also get their tax cuts,” concluded Gage.


Statement of NFFE National President William R. Dougan on White House Announcement of 2-Year Federal Pay Freeze

We are deeply disappointed by the White House announcement this morning calling for a two-year freeze on civilian federal employee pay. It is unfortunate that the Administration has chosen to support a policy that could diminish the government’s ability to recruit and retain top talent at the federal agencies that protect our borders, care for our veterans, and support our armed forces abroad. We understand that sacrifices will have to be made in order to reduce our nation’s growing budget deficit, but we believe doing so at the expense of dedicated civil service employees is a misguided approach. Deficit-reduction efforts should not be focused solely on the federal workforce. All of us need to do our part to get our nation’s fiscal house in order, not just the federal workforce.


Statement by President Holway on Federal Pay Freeze

We are disappointed to see civilian federal employees singled out in an effort to reduce the federal budget deficit. We understand that the budget deficit is very large, and that everyone has to do his part, but freezing civilian federal pay is the wrong way to address this problem.

I have major concerns about what this will mean for federal services like caring for veterans, protecting our borders, and maintaining our military readiness. Over half the federal workforce is at or near retirement age, and I fear we could reach a tipping point as a result of a pay freeze where federal employees start retiring in droves. A wave of federal employee retirements would cause a brain drain throughout the federal government. If thousands upon thousands of federal employees walk out the door in a short period of time, the American people will lose invaluable institutional knowledge that can never be replaced. This pay freeze could do irreparable harm to the functioning of the federal government.


International Federation of Professional and Technical Engineers (IFPTE) President, Gregory Junemann, provided the following comment in response to today’s announcement:

“Just last month the Bureau of Labor Statistics reported that civil servants are paid 24% less than their private sector counterparts, so today’s announcement is obviously a disappointment. However, IFPTE members fully realize the dire economic straights that our nation is currently facing, and the high unemployment numbers facing private sector workers. So, with this comes an expectation that federal workers are not being asked to sacrifice in order to subsidize the very policies that got our nation in this economic mess to begin with.

“For example, one of the few recommendations from the Deficit Commission that IFPTE agrees with is the call to increase taxes on investment income. The time has also come to allow the immoral tax cut that President Bush doled out to the wealthiest two percent of American wage earners to expire. That alone will prevent another $1 trillion from being added to our national debt over the next ten years. While we understand that sacrifice is necessary to bring our deficit under control, we expect that these sacrifices should not just impact our dedicated federal workforce.

“Lastly, I want to stress that our union stands in solidarity with unemployed workers. While we are talking about fiscal realities today, it is important that we also stress the sobering reality that without immediate action by Congress and the White House to extend Unemployment Insurance (UI) benefits by Wednesday, two million unemployed workers are slated to immediately lose their only economic lifeline.

“Federal workers are doing their part, so we urge the President and the Congress to do their part by allowing the Bush tax cuts for the wealthy to expire, tax investment earnings, and immediately pass the much needed UI extension before the close of this week.”


Statement by U.S. Office of Personnel Management Director John Berry on Federal Employee Pay Freeze

“Federal employees work hard for our nation each day, and this sacrifice the President asked them to make today is significant and emblematic of the shared sacrifice we all will have to make if we are to bring the deficit to heel and preserve an economic future for our children.”


Tightening Our Belts

Posted by Jack Lew on November 29, 2010 at 12:13 PM EST

As I wrote last week upon my return to the Office of Management and Budget, the fiscal and economic situation we face today is very different than the projected surpluses we left behind the last time I served as OMB Director in the 1990’s. After years of fiscal irresponsibility, President Obama inherited a $1.3 trillion projected deficit and the worst economic downturn since the Great Depression.

The President and his economic team worked quickly to address the crisis, and we are seeing our economy recover – albeit more slowly than anyone would like. Families and businesses are still hurting, and too many who want to work are not able to find a job. Our top priority must be to do what we can to help boost economic growth and spur private sector job creation.

But to lay the foundation for long-term economic growth and to make our nation competitive for years to come, we must put the United States back on a sustainable fiscal course. And that’s going to require some tough choices.

Today, the President made one of those: proposing a two-year pay freeze for all civilian federal workers. This will save $2 billion over the remainder of this fiscal year, $28 billion in cumulative savings over the next five years, and more than $60 billion over the next 10 years. The freeze will apply to all civilian federal employees, including those in various alternative pay plans and those working at the Department of Defense – but not military personnel.

We are announcing this move today because tomorrow is the legal deadline to submit to Congress the President’s decision about locality pay, a key component of overall federal worker pay. In addition, we are in the midst of the 2012 budget process, and need to make a decision about pay to develop the 2012 budget. Simply, the time to decide about pay for those two years is now.

Make no mistake: this decision was not made lightly.

Like everyone honored to serve in the White House or the Cabinet, we work with extraordinarily talented public servants every day. Throughout my career in the Congress, at the State department, and here at OMB, I have met federal workers who have sacrificed more lucrative jobs and hours with their families – -and, in some cases, put their lives in harm’s way — in order to serve their fellow Americans. Indeed, anyone who has flown safely, enjoyed our national parks, received a Pell grant to go to college, or relied on a Social Security check to retire in dignity has benefited from the service of federal workers.

This pay freeze is not a reflection on their fine work. It is a reflection of the fiscal reality that we face: just as families and businesses across the nation have tightened their belts, so must the federal government.

Already, the Administration has taken a number of steps in this regard as part of its Accountable Government Initiative from the President freezing the salaries for all senior White House officials and other top political appointees upon taking office to his efforts to get rid of $8 billion of excess federal real property over the next two years, reduce improper payments by $50 billion by the end of 2012, and freeze non-security spending for three years – which will bring non-security discretionary spending to its lowest level as a share of the economy in 50 years.

Moving forward, we will need to make many more tough choices to construct a plan to pay down these deficits and put our nation on sound fiscal footing. Later this week, the Fiscal Commission will release its report laying out its approach, and I look forward to working with people from across the spectrum on this challenge in the weeks to come.

What Happened to Pre-decisional Involvement?

Executive Order 13522 requires the following:

“Management should discuss workplace challenges and problems with labor and endeavor to develop solutions jointly, rather than advise union representatives of predetermined solutions to problems and then engage in bargaining over the impact and implementation of the predetermined solutions. The purpose of this order is to establish a cooperative and productive form of labor-management relations throughout the executive branch.” (Section 1)

“The head of each executive department or agency that is subject to the provisions of the Federal Service Labor-Management Relations Act (5 U.S.C. 7101 et seq.), or any other authority permitting employees of such department or agency to select an exclusive representative shall, to the extent permitted by law:
(ii) allow employees and their union representatives to have pre-decisional involvement in all workplace matters to the fullest extent practicable, without regard to whether those matters are negotiable subjects of bargaining under 5 U.S.C. 7106…” (Section 3(a))

It appears from the above, that the Obama Administration may have had a change of heart since last December when it called for an executive branch-wide “cooperative form” of labor management relations. I have no way of knowing whether there was pre-decisional involvement on the part of the White House, but it is certainly not evident from Mr. Gage’s denouncement of the President’s decision. (AFGE’s words, not mine).

As always, any opinion (outside the quotes) that you find above is my sole responsibility.

About the Author

Bob Gilson is a consultant with a specialty in working with and training Federal agencies to resolve employee problems at all levels. A retired agency labor and employee relations director, Bob has authored or co-authored a number of books dealing with Federal issues and also conducts training seminars.