Freezing Federal Employee Pay (Done!) and Restricting Within-Grade Increases and Promotions (Proposed!)

There is a serious effort to cut back on federal spending with proposals to freeze federal promotions and step increases.

In an article we published last December, we wrote that, in the opinion of one Congressman: “handing out billions of dollars in step increases while touting a pay freeze shows the White House’s plan is disingenuous and ‘full of holes.’ In other words, the federal pay freeze is good political theater but
isn’t a serious effort to cut back on federal spending.”

In this instance, at least, the past may be a prelude to the future.

While those who are serious about cutting the federal budget, and there are many now in Congress who were elected with that being a primary element of their campaign, cutting federal pay and benefits is a way to reduce the cost of government.

As most readers know, Congress did not pass a budget for the current fiscal year which began last October. The new Congress is working on the problem.

President Obama proposed late in 2010 freezing annual federal pay raises in 2011 and 2012. His proposal was for canceling the annual increase to the GS pay scales and that was subsequently adopted by Congress. As we pointed out at that time, the initial pay freeze did not impact  step increases, promotions, bonuses, and raises from pay-for-performance systems.  (See Congress Approves Federal Employee Pay Freeze and President Obama Proposes Freeze on Federal Civilian Employee Pay for 2 Years)

Proposing to Restrict Step and Salary Increases

Darrell Issa (R-CA) introduced an amendment on February 16 in the House of Representatives that would deny federal employee within-grade step
increases. A similar amendment to the continuing resolution from Todd Rokita (R-IN) to prevent federal appropriated funds from being used for federal employee salary increases.

HR 1 is known at the Full-Year Continuing Appropriations Act, 2011. The restrictions to withhold step increases and salary increases are amendments to HR 1.

There are about 600 amendments currently proposed to HR 1. Obviously, there will be major changes to the bill before it becomes law–if, in fact, it even does pass into law this year.

No doubt, employee organizations representing the immediate financial interests of federal employees will be issuing press releases and unleashing their lobbying efforts to try to defeat the amendments. Getting these proposals passed by Congress and the Senate will be a heavy legislative load.

On the other hand, budget proposals are flying around as Congress is serious about cutting the federal deficit. The proposed budget for 2012 issued by the White House this week is being attacked as a political document that is not serious about cutting spending as it would actually raise federal spending in the coming year rather than cut it and the proposal ignores interest on the federal debt as one way to make the proposal look like it would be less federal spending than would actually occur.

Politics and the Federal Workforce

In other words, the politics surrounding the federal budget are unpredictable. While we anticipate these proposals are unlikely to become law, anything can happen in the next few weeks as Congress and the administration wrangle over how to cut federal spending and as politicians position themselves to run for election in 2012.

As we have pointed out to readers, federal employees work in a political environment and the environment has become much more political in recent years as organizations that represent the federal workforce has become increasingly aligned with one political party over another. With a less neutral federal civil service, federal employees are more apt to become a target as the political pendelum swings back and forth. (See Political Reality, Federal Employee Unions and the Financial Future of Federal Employees)

If you are anticipating receiving a within-grade increase or a promotion later this year, don’t spend the money until you see the money appearing in your paycheck. While the chances are you will get paid the amount you may have anticipated, it is not a certainty.

As more information becomes available, and these latest proposals are handled in Congress, we will provide more information as they could obviously have an impact on the financial security of many in the federal community.

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