WASHINGTON — President Barack Obama announced Monday a two-year pay freeze for civilian federal workers as he sought to address concerns over high annual deficits and appealed to Republicans to find a common approach to restoring the nation's economic and fiscal health.
"The hard truth is that getting this deficit under control is going to require some broad sacrifice, and that sacrifice must be shared by employees of the federal government," Obama told reporters.
He called federal workers "patriots who love their country" but added, "I'm asking civil servants to do what they've always done" for the nation.
The freeze, which must be approved by Congress, applies to all executive branch workers — including civilian employees of the Defense Department, but does not apply to military personnel, government contractors, postal workers, members of Congress, congressional staffers, or federal court judges and workers.
The pay freeze amounts to an opening bid as the president and Republican congressional leaders begin jousting in earnest over tax and spending policy. It also illustrates how Obama can use his executive power on occasion to get ahead of newly elected Republicans; they have been talking about making such a move when they assume control of the House and additional Senate seats in January.
But while the move represents a gesture toward public anger over the anemic economic recovery and rising national debt, the $5 billion to be saved over two years will barely dent a deficit that has exceeded $1 trillion for the past two years. And even those savings would be swamped by the multi-trillion-dollar costs of the bigger issue dividing Obama and the Republicans — what parts of the Bush-era tax cuts to extend beyond their Dec. 31 expiration, and for how long.
That issue and others will be on the agenda today when Obama hosts the House and Senate leaders of each party at the White House for the first time since midterm elections.
Today will also be the last day for emergency federal assistance for about 2 million Americans who have been unemployed for long periods, and Friday a temporary measure providing money for government operations will run out. The two parties are at odds over both matters, with many Republicans opposed to additional unemployment aid and demanding more cuts from domestic spending for the fiscal year that began in October.
As Obama made his comments at the announcement of the federal pay freeze, the bipartisan commission he established in February to propose ways to reduce the growth of the national debt entered a final two days of negotiations over various combinations of spending cuts and revenue increases. In a sign of the struggle to find a compromise that could attract Democratic and Republicans votes, the commission chairmen — Alan Simpson, a former Senate Republican leader, and Erskine Bowles, a chief of staff to President Bill Clinton — decided to meet privately with members one at a time Monday and today.
The Republicans on the panel are generally opposed to raising taxes and the Democrats to big changes in Medicare, Medicaid and Social Security.
Bowles and Simpson revised their draft debt-reduction package during the Thanksgiving holiday break to reflect members' criticisms. Their goal is to reduce projected deficits by nearly $4 trillion over the coming decade. That is roughly the same amount that would be added to the national debt by extending the Bush-era tax rates — a juxtaposition that underscores the contradictory impulses of elected officials as constituents demand both smaller deficits and low taxes.
The pay freeze Obama announced wiped out plans for a 1.4 percent across-the-board raise in 2011 for 2.1 million federal civilian employees, and it would mean no raise in 2012. Workers who are promoted would still receive the higher pay that comes with the higher grade or position.
The move would save $2 billion in fiscal 2011, which ends Sept. 30, and $5 billion by the end of two fiscal years. Over 10 years, it would save $60 billion, according to Jeffrey Zients, deputy director of the Office of Management and Budget and the government's chief performance officer.
The federal work force is an obvious first target, if one fraught with political risk for a president who relies on union support. Opponents of big government have been trying to build a political case that federal employees are being overpaid. In a report in June, Chris Edwards of the Cato Institute, a libertarian research organization in Washington, found that federal civilian workers had an average annual wage of $81,258 in 2009, compared with $50,464 for nation's private-sector workers. Average federal salaries rose 58 percent from 2000 to 2009, compared with 30 percent in the private sector.
Union leaders, though, cited other data showing that federal workers were paid 24 percent less than their private sector counterparts, and they accused Obama of playing politics.
"Sticking it to a VA nurse and a Social Security worker is not the way to go," John Gage, president of the 600,000-member American Federation of Government Employees, said in an interview.
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