National Commentary

A Lump of Coal for Federal Employees

President Obama put a big lump of coal in federal employees stockings this year, announcing a two year pay freeze for all federal civilian employees. The reasoning, according to the White House, is that the two-year pay freeze will save $60 billion over the next 10 years.

I strongly oppose the President’s proposal because it unfairly targets federal employees. Unilaterally freezing pay for civil servants separate from a comprehensive deficit reduction package unfairly asks federal employees to carry a burden that should be shared by all. This freeze strikes at the heart of pay parity, penalizing civilian federal employees in the Defense Department, CIA and other agencies who work side-by-side with our active duty service men and women overseas. Sixty billion dollars in deficit reduction is a drop in the bucket compared to the $13 trillion and counting that makes up our national debt. But this relatively small cut debt reduction-wise will have a negative effect our local economy because of how many federal workers call Northern Virginia home.

Any reduction in federal employee pay, benefits and compensation should be considered as part of an holistic examination of the federal budget. The proposal offered by the President unfairly isolates federal employees, whom should not face this burden simply because they carry out the work of the federal government.
According to the latest data from the Bureau of Labor Statistics, federal employees are paid 24 percent less than their private sector counterparts, a figure that rose over the course of the last year. To target federal employee pay in this manner is misguided and will only exacerbate the disparity between private and public sector compensation. In fact, as a result of sustained private sector job growth and productivity gains, according to the Employment Cost Index (ECI), private sector wages rose by an average of 1.4 percent last year. This key ECI statistic led the President to initially recommend an identical pay increase for members of the federal workforce for FY 2011 as part of his budget submission.

Another concern with the proposed pay freeze is that it may cause many federal employees to retire early or immediately. A key component of a federal employee’s annuity is the highest three years (high 3) of that employee’s salary. The pay freeze may cause employees of retirement age to retire on the presumption that their “high 3” will not change during the interim two years. Given that 45 percent of federal employees will be within retirement age by 2012, the pay freeze heightens the likelihood that a brain drain will occur as the baby boomers retire.

The federal civil service is a talented workforce that needs to be carefully managed and developed. Though federal employees will still be eligible for bonuses and pay increases related to promotion, capping federal pay for two years sends a demoralizing message to the federal workforce that only increases the disparity between public and private sector compensation.

The final reason I oppose this action is that rather than placating conservative anti-government Members of Congress which seems was part of the White House’s political calculus, the freeze will only embolden them. As I have stated before, those who got elected claiming the federal government is broken will now set about trying to break it. This only adds fuel to that fire, rather than standing up to their false attacks on the effectiveness and hard work provided by what is unquestionably the best civil service in the world.

 


Rep. James Moran (D) is Virginia’s 8th Congressional District Representative in the U.S. House of Representatives.