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Panel approves bill freezing fed pay another year

Jun. 6, 2012 - 04:12PM   |  
By STEPHEN LOSEY   |   Comments

The House Appropriations subcommittee on financial services and general government Wednesday approved a 2013 spending bill that contains no federal pay raise and cuts funding for several major agencies.

The financial services and general government appropriations bill now heads to the full House Appropriations Committee, where it is expected to pass.

This spending bill typically contains a provision raising federal employees’ pay, but the fiscal 2013 bill does not, meaning that if it becomes law, federal employees’ pay would be frozen for a third straight year. President Obama has proposed a 0.5 percent pay raise.

Appropriations Committee Chairman Hal Rogers, R-Ky., said government spending must be cut more severely to rein in the deficit.

“The unsustainable trajectory of federal spending in recent years has left us in a precarious situation,” Rogers said. “At this time of monumental deficits and skyrocketing debt, we cannot afford to let taxpayer dollars slip through the cracks.”

But Rep. Norman Dicks, D-Wash., the committee’s leading Democrat, said the spending bill will hurt federal employees and force agencies to draw down the services they provide to the public.

“This allocation, if enacted into law, would result in substantial reductions in basic services to the public, and furloughs, layoffs and vacancies at a time when employment remains the nation’s top concern,” Dicks said.

The IRS’ budget would remain unchanged from the $11.8 billion it received in 2012 — about $945 million less than the White House requested. Dicks said this would likely force the IRS to cut jobs, especially in enforcement.

“Fewer audits will be performed, more tax cheats will get away with not paying their fair share, and the tax gap, which is very large, will grow,” Dicks said. “These cuts lead to increased deficits, as enforcement resources have been proven to have a return on investment ratio of about four-to-one. This reduction will reduce revenue and increase the deficit by about $4 billion a year.”

The National Treasury Employees Union also denounced the bill’s funding of the IRS and the Securities and Exchange Commission, and its lack of a pay raise. NTEU said continuing the pay freeze will hurt agencies’ ability to recruit and retain talented employees.

The bill calls for almost $21.2 billion in spending, which would be $376 million below fiscal 2012 levels and $2 billion below the White House’s request. When adjusted for inflation, the proposed 2013 bill would be virtually equal to 2008 funding levels.

The bill would also beef up oversight of the General Services Administration in the wake of a conference spending scandal there. The bill requires quarterly spending reports, limits on cash awards to GSA employees, stricter limits on travel and conferences, and an inspector general report into travel, conferences and bonus procedures.

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