Pay Freeze for Federal Employees in 2021?

November 10, 2020 5:28 PM
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The Senate Appropriations Committee has proposed a pay freeze for federal employees in 2021. The proposal comes in the form of a series of funding bills for the federal government for the 2021 fiscal year.

The Senate Appropriations Committee released all twelve of its Fiscal Year 2021 (FY21) funding measures and the FY21 subcommittee allocations.

The pay freeze proposal for the federal workforce was included in the Financial Services and General Government draft bill. A summary document outlining major provisions of the draft legislation mentions the pay freeze.

But wasn’t a 1% pay raise proposed for federal employees for next year? Yes, that is what the White House put on the table in its budget proposal.

However, the the process of arriving at a pay raise (or freeze) for federal employees is a long and sometimes complex process. The president can propose a raise if Congress does not address the issue in the legislative process. That is what President Trump did in February.

Congress can override that proposal if it chooses to do so. The House recently passed FY 2021 funding legislation that did not address a pay raise, which means that this would have deferred to the president’s proposal of 1%.

But since the Senate is explicitly putting a freeze on the table, it is the first step in what could change the outcome for next year’s pay raise.

Keep in mind, all of this has to be finalized as part of the legislative process before taking effect. Any funding legislation has to be passed by Congress and signed into law before next year’s pay raise is known for sure. This normally happens in December, but as we saw with the 2019 pay raise, the number still could change if Congress passes a pay raise that is made retroactive. That is not an altogether outlandish possibility with a new Congress heading to Washington next year.

Some of the proposals in the Senate Appropriations Committee’s draft bills have been met with opposition from Democrats. In a statement, Appropriations Committee vice-chair Patrick Leahy (D-VT) said that he was “disappointed that the majority chose to cancel Committee markups of the FY 2021 bills and that the bills were not considered by the full Senate…”

His statement went on to point out some of the problems that Senate Democrats saw with the bills, but the pay freeze was not mentioned.

Leahy did mention the pressure on Congress to pass funding and avoid a partial government shutdown when the latest continuing resolution expires. Whether or not that could lead Congress to overlook or ignore something like a pay freeze tucked into the broader funding bills is unknown.

One other item of note from the draft legislation is with respect to the Thrift Savings Plan. The bill summary also states that the TSP would be prohibited “from making investments in countries that deny U.S.accounting regulators full access…” This most likely is in reference to the decision made earlier this year to not go forward with a change to the underlying index tracked by the TSP’s I Fund that would have contained investments in Chinese companies.

View Financial Services And General Government, 2021

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About the Author

Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce.

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