Whether one agrees or disagrees with President Obama’s proposal to skip the scheduled 1.4 percent cost-of-living increase for civilian federal workers, his plan does mark his first real acknowledgment that a new political reality exists after the November 2 election. It would be hard to imagine Obama taking such a step if Democrats had kept the House.
The big question is whether Obama’s proposal signals a real change in direction or is just an idle gesture, albeit one that many federal workers and public-employees unions—an important part of the Democratic base—will not appreciate. Will the president selectively embrace more issues designed to appeal to independents, who reversed course and voted Republican for Congress by an 18-point margin, the exact opposite of the 2006 midterm election? It is telling that 95 percent of voters who identified themselves as Republican supported GOP House candidates and that those calling themselves Democrats supported their party’s candidate by a similar percentage (92 percent). Democrats’ control of the House was lost not among Democrats or Republicans but among independents.
This isn’t a new phenomenon. In 2006, when Democrats recaptured the House, Democratic voters voted for their party by 93 percent to 7 percent while Republicans voted for GOP candidates by 91 percent to 8 percent. And the election results weren’t really about turnout. In 2010, 36 percent of those who voted called themselves Democratic, only 2 points less than four years ago, while 36 percent of the electorate in both midterm elections identified themselves as Republican. For the most part, independents determined this election. (The Colorado and Nevada Senate races were notable exceptions because Latino voters turned out in high numbers there.)
So a key question is whether Obama will follow up his announcement about federal pay with other initiatives. Is the pay freeze a sign that the president will go along with Republicans on extending all of the Bush tax cuts for a year or two? Although such a move would obviously be sending a contradictory message on deficit reduction, it does take a step toward working with Republicans on something important and avoiding the train wreck of higher rates on January 1.
Will we see the president selectively embrace an element or two of the recommendations of Erskine Bowles and Alan Simpson, the co-chairmen of Obama’s National Commission on Fiscal Responsibility and Reform? Or from the recommendations of the Peterson-Pew Commission on Budget Reform, or the Bipartisan Policy Center’s Debt Reduction Task Force? Will Obama be demonstrating the true commitment to deficit reduction that independents profess to be so important—or avoiding it?
The second interesting aspect of the pay-freeze decision is that it represents the most recent sign that federal, state, and local government employees face rough times ahead. For state and local public employees, the fear is that the president’s move will serve as a green light for elected officials at their levels to take similar or even more dramatic actions. Effective government relations and political activity for years have protected many public employees from some of the hard times that their brethren in the private sector have faced.
Massive layoffs, pay freezes, pay reductions, an increased emphasis on productivity, and rising pressure to do more with less have become part of the daily lives of many private-sector workers. Increasingly, all of that will be a part of the lives of public employees as well. Creeping into newspaper opinion pieces and even news stories are phrases like “coddled” and “a protected class,” suggesting resentment among private-sector workers toward those in the public sector. Public-employee unions are under siege like never before.
Workers’ dramatically different circumstances have been obvious for years and can be seen in the labor-union movement’s fissures. The issues of grave importance to manufacturing and industrial workers were irrelevant to public and service employees. In 2004, many of the trade crafts backed the presidential candidacy of former House Majority Leader Dick Gephardt, while many of the public-employee unions supported Sen. John Kerry.
The solidarity that once existed evaporated as workers in the manufacturing and industrial sectors faced realities that were alien to public-sector workers. Meanwhile, many of the lower-paid service employees grew apart from both of the other sectors. In effect, the labor movement became three movements, with none having the individual clout that all three once collectively had.
The president’s simple move to freeze federal pay in some ways raises far more questions than it answers. It definitely increases the uncertainty hanging over the next Congress. Will there be a new President Obama? And will other sacred Democratic cows be headed for the slaughterhouse or at least get nicked by the blade?
This article appears in the Dec. 4, 2010, edition of National Journal.