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Pay freeze may go a third year

Jun. 17, 2012 - 02:53PM   |  
By STEPHEN LOSEY   |   Comments
President Obama walks into the Rose Garden on June 15 at the White House.
President Obama walks into the Rose Garden on June 15 at the White House. (Chip Somodevilla / Getty Images)

Democrats in the Senate last week surprisingly made no attempt to include a pay raise in a key 2013 spending bill, dimming hopes that an end is in sight for the current two-year federal pay freeze.

Senate Democrats are pinning their hopes on a rare scenario in which President Obama could unilaterally impose a pay raise for next year. Obama has proposed a 0.5 percent raise for federal employees.

Congress usually proposes a pay raise in the annual financial services and general government spending bill. But both the House and Senate versions of the bill advanced in recent weeks have been uncharacteristically silent on the issue of pay raises. Lawmakers have not even mentioned federal pay — let alone proposed amendments raising pay — during markup sessions in both the House and Senate Appropriations committees.

Federal unions blasted the House Appropriations subcommittee on financial services and general government earlier this month for approving a bill with no pay raise, saying it would extend the pay freeze through 2013.

But that may not necessarily be the case.

If Congress does not specifically pass a pay raise or freeze pay, the 1990 Federal Employees Pay Comparability Act allows the president to set a pay raise through an executive order.

A Senate staffer familiar with the issue confirmed to Federal Times that Democratic staffers hope to pass spending bills that don’t mention federal pay at all this year, allowing Obama to set next year’s pay raise. Obama has until Aug. 31 to officially propose his 2013 pay raise.

Henry Romero, a federal pay expert and former Office of Personnel Management official, said that the political gamesmanship in Democrats’ “thread-the-needle” strategy could put Obama in a politically difficult position. Obama’s late-August pay raise order would likely come in the heat of what is likely to be a tough presidential election. Romero said he could see Obama backtracking on his proposed 0.5 percent raise and choosing to freeze pay again to show fiscal discipline.

“If things get tough for the Obama campaign on the economy, I would not be shocked if we end up with a proposed extended pay freeze from the administration,” Romero said. “There is a high level of anti-federal employee attitude out there.”

The Senate Democrats’ legislative tightrope act could easily fail. Many Republicans — especially in the House — are eager to further freeze feds’ pay, which they say is excessive and has far outpaced private-sector pay. Republicans have included pay freeze language in several House bills in recent months, and if one of those bills becomes law, Obama would be powerless to grant a pay raise.

And the fact that Democrats are even considering this unprecedented strategy shows how politically difficult passing a federal pay raise has become. Until recent years, Congress has usually only debated how big of a pay raise to grant feds, and whether they should get the same raise as military service members.

If federal pay scales are frozen again in 2013, it would be the first three-year pay freeze since the early 1950s, when the newly established General Schedule was still in flux.

“These are unique times,” said John Palguta, vice president for policy at the Partnership for Public Service.

Palguta and Romero think that when the dust settles, federal employees will receive their 0.5 percent pay raise next year. It would be the smallest raise in the GS system’s six-decade history.

“Clearly that’s a possibility, and it’s not remote,” Palguta said. “If I were to make a small wager, I think they will find a small increase. But that’s a wager I might lose.”

The House subcommittee passed its spending bill June 6, sending it to the full committee, where it is likely to pass. The Senate Appropriations subcommittee on financial services and general government passed its bill June 12, and the full committee approved it on a party-line vote June 14.

The National Treasury Employees Union said freezing pay another year will hurt agencies’ ability to recruit and retain talented employees.

Sen. Barbara Mikulski, D-Md., inserted language into the bill that she said would prohibit “arbitrary freezes or cuts to the size of the federal workforce.”

Mikulski’s additions would require agencies to scale back their workloads based on available funds and the workforce necessary to carry out their missions. It would also prevent federal work from being outsourced without comparing the cost of feds and contractors, and order agencies to identify wrongly outsourced work and bring it back in-house.

“Whenever deficit reduction comes up, federal employees are the first to take a hit,” Mikulski said. “They are the targets of unending attacks. The language I put in the bill would protect our federal employees.”

The Senate bill would also provide $56 million to the General Services Administration for new construction and $515 million to repair federal buildings and courthouses.

It would also provide the Internal Revenue Service $12.5 billion, a $702 million increase over fiscal 2012, but a $242 million cut from Obama’s request. And the Securities and Exchange Commission would receive $1.6 billion, an increase of $245 million, or 19 percent, above this year’s level.

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Andy Medici contributed to this report.

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