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In choice to cut jobs or raises, Obama chose raises

Sep. 3, 2012 - 11:57AM   |  
By STEPHEN LOSEY   |   Comments
President Obama walks across the South Lawn upon returning to the White House on Aug. 29.
President Obama walks across the South Lawn upon returning to the White House on Aug. 29. (Mandel Ngan / AFP via GettyImages)

The hated two-year federal pay scale freeze isn’t going to end anytime soon. And depending on how sluggish Congress is, and how this fall’s election shapes up, the freeze could last through 2013 — or longer.

President Obama earlier this year proposed lifting the pay freeze next year and granting federal employees a 0.5 percent pay-scale raise in 2013. But on Aug. 21, Obama called on Congress to extend the pay freeze until lawmakers pass a fiscal 2013 budget. Because Congress is expected to vote on a six-month continuing resolution sometime this month, that would mean no pay raise until at least next April.

Promotion raises and step increases would continue, however. Roughly half of the 1.5 million General Schedule employees will be eligible for step increases next year, which would bring them raises of about 3 percent.

Obama could have used his power under the Federal Employees Pay Comparability Act to set next year’s pay raise himself if Congress did not act to extend the freeze or pass its own pay raise, but he chose not to do so. J. David Cox, national president of the American Federation of Government Employees, denounced Obama’s decision and said the president has flip-flopped on federal pay after initially supporting a 0.5 percent pay scale raise for the full year.

Obama said he still supports a 0.5 percent increase to GS pay scales but said it would take effect only once the budget is passed and would not be retroactive to January.

Agencies have been struggling to cope with tight budgets in recent years, and many have resorted to buyouts and early retirements to avoid furloughs or layoffs. The money saved by a pay freeze extension could help agencies avoid furloughs and layoffs.

Congress’ track record on approving budgets in recent years has been abysmal. In 2011, only the Defense Department had an approved operating budget — the rest of the government operated on a continuing resolution. It is conceivable that federal employees’ 2013 raise could be delayed further — or denied entirely if the polarized Congress can’t settle on a budget.

The outcome of this fall’s election could also factor in whether feds get even the historically low 0.5 percent raise proposed by Obama. John Palguta, vice president for policy at the Partnership for Public Service, expects Republican presidential candidate Mitt Romney to extend the pay freeze if he wins the White House. Romney has repeatedly criticized federal employees’ pay and benefits, and his running mate, Rep. Paul Ryan, has backed a five-year pay freeze for feds.

“What happens Nov. 6 will weigh those odds” of a full-year pay freeze, Palguta said. “It depends on who is president Jan. 21.”

Cox said a delay until April will whittle down the practical effect of a 0.5 percent raise — already the lowest in the General Schedule’s six-decade history, except for years when pay was frozen.

“You’ve taken a half-percent and cut it to a quarter of a percent,” Cox said. “That is no money. [Employees’] health insurance has gone up. I don’t need to tell anyone about the price of gasoline.”

A 0.5 percent pay raise would equate to only a few extra dollars per paycheck. Even GS-15 employees at the top of their pay scale, earning $155,500, would bring home only about $21 more per paycheck, after taxes. Lower-rated employees would likely take home less than $10 extra every two weeks.

National Treasury Employees Union President Colleen Kelley said “the federal pay freeze has gone on long enough.”

“Federal employees have already made sacrifices in the name of deficit reduction and economic recovery,” Kelley said in a statement. “The [two-year] pay freeze … will produce a $60 billion contribution over 10 years from the federal workforce, while increased pension contributions from new federal hires will generate another $15 billion. The time has come for others, including the nation’s wealthiest individuals and corporations, to be asked to share in the sacrifice.”

NTEU said that delaying a 0.5 percent raise by three months would probably save the government about $2 billion over a decade, and a half-year delay would save more than $4 billion.

Both Cox and Kelley pledged to fight to make the pay raise, if and when it is passed, retroactive to January.

Employees interviewed by Federal Times had mixed feelings about the prospects of a further freeze.

One employee, Carol Smith, who asked for her agency and grade not to be printed, said Congress might as well not bother passing such a tiny 0.5 percent raise, if it’s only going to be effective for a few months. Republican lawmakers’ criticisms of federal employees’ pay have hit home, she said, and even a small raise will look bad to the public.

“Don’t even bother,” Smith said. “If they give us that raise, people will see that as — even though it’s minuscule — ‘Oh, they got a raise again.’”

The current two-year freeze has prompted her to tighten her belt, Smith said. She and her husband don’t go to the movies anymore, cut back on the clothing they help buy for their grandchildren, and took a more modest vacation this year.

For some federal workers, even a tiny raise would help.

A GS-6 medical supply technician at the Veterans Affairs Department, who spoke to Federal Times but asked for her name not to be printed, said the raise would help her pay for vital therapy classes and exercise sessions for her 15-year-old autistic daughter. She said her daughter, who is developmentally disabled and functions on the level of a second- or third-grader, has difficulty speaking and performing tasks such as writing her name or tying her shoes, and those classes have helped her develop.

The VA technician, who is a single mother, said she’s already had to cut her daughter’s classes from five days a week to three during the first two years of the pay freeze. With rent and other living costs rising, further freezing pay would probably force her to reduce that to two days or even one.

The technician said she is due to go up to a Step 9 in October 2013, which would bring her a nearly 3 percent raise.

Without that increase to help pay for a babysitter while she goes to her night shift at VA, she said she would probably have to put her daughter in a group home.

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