Updated at 2:45 p.m. on November 29.
President Obama announced today that he's proposing a two-year pay freeze to civilian military and federal employees to help reduce the federal deficit and ensure America remains competitive in the years to come.
"I did not reach this decision easily," Obama said during a press conference in the Eisenhower Executive Office Building. "This is not just a line item on a federal ledger. These are people’s lives.”
He noted, as did other officials, that he has already taken steps to reduce unnecessary spending, including proposing a three-year freeze on all non-security discretionary spending.
The pay freeze would save $5 billion during the next two years, and $28 billion during the next five years. The White House also projects that the freeze will save more than $60 billion during the next 10 years. Congress would have to approve the pay freeze.
"This is about finding ways to deal with the deficit and cut spending," said Office of Management and Budget Deputy Director for Management Jeffrey Zients in a conference call with reporters ahead of Obama's announcement.
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, according to the White House.
The announcement of the pay freeze may be an attempt to signal to Republicans that Obama is serious about cutting spending. The GOP have long advocated for that type of spending control with no success, and it was a campaign promise made by many incoming legislators.
The size of federal salaries stirred debate earlier this fall when USA Today reported that the percentage of federal employees making $100,000 or more jumped from 14 percent to 19 percent during the first 18 months of the recession, including a jump in Defense Department civilian employees from 1,868 to 10,100 making more than $150,000. According to the Office of Personnel Management, that represented a 6.6 percent increase in federal salaries during the recession, compared to only 3.9 percent in the private sector.
When reporters raised the issue of increasing federal salaries, Zients denied that the pay freeze was linked to the reports, insisting that the decision was only made “in the context of the difficult deficit situation.”
The president had proposed a 1.4 percent pay hike for civilian and military employees in his fiscal 2011 budget. The Senate Appropriations Committee in July approved legislation that met Obama's request for the civilian raise, but House appropriators have been silent on the issue.
Zients noted that the proposed freeze does not mean that federal workers will remain locked in their government pay-scale levels for the next two years. They will still be eligible to receive a pay increase if they are promoted to a higher GS level.
Presumptive Speaker John Boehner, R-Ohio, said he welcomed Obama’s call for a net federal pay and hiring freeze, and incoming Majority Leader Eric Cantor, R-Va., said he also was “encouraged” by Obama’s plan to freeze non-military federal pay for the next two years.
Said Boehner: “Without a hiring freeze, a pay freeze won’t do much to rein in a federal bureaucracy that added hundreds of thousands of employees to its payroll over the last two years while the private sector shed millions of jobs.”
“Today’s action is a clear indication that the Pledge to America, which lays out concrete steps to cut spending and reduce the size of government, is the right plan to address the people’s priorities. Republicans and Democrats don’t have to wait until January to cut spending and stop all the tax hikes. We can – and should – start right now,” he said.
For ongoing coverage on the pay freeze proposal, see our sister publication, Government Executive.
Cantor also noted that in May, House Republicans had even offered “the very same spending-cut proposal on the floor of the House,” prompted by their YouCut program voters.
But Majority Leader Steny Hoyer, D-Md. -- whose district outside Washington D.C. is home to thousands of federal workers -- was lukewarm. But Hoyer said that while “I appreciate” that Obama reduced the length of his proposed pay freeze from three to two years, “it would have produced significantly more savings had that sacrifice been shared between Federal civilian and military personnel--with a strong exception for the members of our military and civilian employees risking their lives on our behalf in Afghanistan, Iraq, and anywhere else they are serving in harm's way.”
“It would have also added an element of fairness,” he said.
“In the coming days, I will review closely President Obama's proposal for its balance between fiscal responsibility and the need to recruit and retain a Federal workforce able to provide the level of service that the American people expect,” said Hoyer.
Presumptive House Oversight and Government Reform Chairman Darrell Issa, R-Calif., said the pay freeze is “necessary and quite frankly, long overdue.” He also noted that the GOP has been pushing for such cuts, as outlined in its "Pledge to America."
Emily Long of Government Executive contributed as did Billy House contributed to this article.
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