Obama Seeks Pay Freeze for Federal Workers

Updated at 12:36 p.m. on November 29.

President Obama announced today that he's proposing a two-year pay freeze to civilian military and federal employees to help reduce the federal deficit and ensure America remains competitive in the years to come.

"I did not reach this decision easily," Obama said during a press conference in the Eisenhower Executive Office Building. "This is not just a line item on a federal ledger. These are people's lives."

He noted, as did other officials, that he has already taken steps to reduce unnecessary spending, including proposing a three-year freeze on all non-security discretionary spending.

The pay freeze would save $5 billion during the next two years, and $28 billion during the next five years. The White House also projects that the freeze will save more than $60 billion during the next 10 years. Congress would have to approve the pay freeze.

"This is about finding ways to deal with the deficit and cut spending," said Office of Management and Budget Deputy Director for Management Jeffrey Zients in a conference call with reporters ahead of Obama's announcement.

Recommended Reading

The freeze will apply to all civilian federal employees, including those in various alternative pay plans and those working at the Department of Defense--but not military personnel, according to the White House.

The announcement of the pay freeze may be an attempt to signal to Republicans that Obama is serious about cutting spending. The GOP have long advocated for that type of spending control with no success, and it was a campaign promise made by many incoming legislators.

Presumptive House Oversight and Government Reform Chairman Darrell Issa, R-Calif., said the pay freeze is "necessary and quite frankly, long overdue." He also noted that the GOP has been pushing for such cuts, as outlined in its "Pledge to America."

The size of federal salaries stirred debate earlier this fall when USA Today reported that the percentage of federal employees making $100,000 or more jumped from 14 percent to 19 percent during the first 18 months of the recession, including a jump in Defense Department civilian employees from 1,868 to 10,100 making more than $150,000. According to the Office of Personnel Management, that represented a 6.6 percent increase in federal salaries during the recession, compared to only 3.9 percent in the private sector.

When reporters raised the issue of increasing federal salaries, Zients denied that the pay freeze was linked to the reports, insisting that the decision was only made "in the context of the difficult deficit situation."

The president had proposed a 1.4 percent pay hike for civilian and military employees in his fiscal 2011 budget. The Senate Appropriations Committee in July approved legislation that met Obama's request for the civilian raise, but House appropriators have been silent on the issue.

Zients noted that the proposed freeze does not mean that federal workers will remain locked in their government pay-scale levels for the next two years. They will still be eligible to receive a pay increase if they are promoted to a higher GS level.