Federal pay freeze: why Obama is following path trod by states, businesses now
Obama's proposed federal pay freeze is an idea whose time has come to a sector whose turn has come. It's also a nod to the GOP and recognition that deficit-cutting is a priority for the public.
President Obama proposes a federal pay freeze for civilian employees this year and next at the Eisenhower Executive Office Building in Washington on Nov. 29.
Andrew Harrer/UPI/Newscom
President Obama's proposed pay freeze for federal workers underlines a message that was already signaled in national elections this month: Leaner times are coming to Washington.
Skip to next paragraph
In a way, federal workers are the last to be hit by the aftershocks of America's deepest recession since the 1930s. Private-sector companies took emergency cost-control measures during the recession. State and local governments have been similarly cutting costs – including with freezes on hiring and pay raises.
IN PICTURES: Inside President Obama's White House
Why is Mr. Obama calling for pay restraint now?
The president's proposed two-year freeze, which would require congressional approval and would not affect the military, reflects a shift in political and economic conditions:
• A changed public mood. When Obama took office, the obvious imperative was to stop a freefall in the economy, and economists were widely calling for federal stimulus spending at a time when the private sector was spending less. By this fall, as congressional elections rolled around, the public mood had shifted considerably, with curbing deficits outweiging stimulus as a priority.
• A natural cycle. It's not unusual for private-sector employers and consumers to feel the pinch of a recession first, while the impact on the federal government is delayed. Congress sets budgets on a slower timetable, and the Treasury's ability to borrow cushions Washington from the impact of falling tax revenues.
• Fiscal reality. Even before the election drubbing, with Republicans taking control of the US House of Representatives, Obama said a fiscal reckoning was drawing near. Earlier this year, he set up a bipartisan commission to define ways to reduce federal deficits and stabilize the nation's public debt as a share of gross domestic product over the next few years.
At best, restraint on federal-employee pay is just a small part of any long-term budget fix. And a two-year freeze is just a temporary step. (Obama said the move would save $28 billion over five years.)
Obama cast his announcement Monday as part of a broader effort to put the federal budget on sounder footing.
These comments are not screened before publication. Constructive debate about the above story is welcome, but personal attacks are not. Please do not post comments that are commercial in nature or that violate any copyright[s]. Comments that we regard as obscene, defamatory, or intended to incite violence will be removed. If you find a comment offensive, you may flag it.