Obama to freeze federal worker pay, save $5 billion over two years
posted at 12:55 pm on November 29, 2010 by Ed Morrissey
Give the President some credit. This mainly empty gesture will net a lot more than Barack Obama’s earlier exhaustive budget trimming that saved all of $100 million after running up a $1.3 trillion deficit. Today, Obama will announce a two-year freeze on the wages of civilian federal workers that will arguably result in $5 billion in savings over two years:
President Barack Obama will announce a two-yearpay freeze for federal employees Monday, a move White House officials say is the first of many difficult decisions that must be made to reduce the nation’s mounting deficit.
The White House said Monday that the freeze would apply to all civilian federal employees, including those working at the Department of Defense, but would not affect military personnel. The freeze is expected to result in more than $5 billion in savings over two years, according to Jeffrey Zients, a deputy director at the Office of Management and Budget.
That would make only a small dent in the $1 trillion-plus budget deficit. But with voters voicing their anger over Washington’s spending during the midterm elections, even a symbolic gesture could demonstrate the White House got the message.
Actually, it will make a miniscule dent in $2 trillion in deficits. If the savings get calculated over two years, then we have to do the same with the deficits they supposedly address. The savings, assuming they actually occur, will amount to a reduction of 0.25% in the biennial deficits. Calling it a drop in the bucket is an insult to both drops and buckets. It’s a single grain of sand from the coast.
Will we actually see this cost savings? Probably not. Gabriel Malor received an official explanation given to federal employees today, which assured them that the freeze “will not impact step increases or bonuses for federal workers.” It applies to cost-of-living increases, mainly. If an agency wants to give a worker an increase, they just need to increase their pay grade or boost their bonuses to make it happen.
Even if Obama is sincere in this announcement, it’s nibbling at the far edges of the federal spending problem. The Corner has Rep. Darrell Issa’s instructive response to the proposal:
“At a time when our nation’s seniors have been denied a cost-of-living-increase and private sector hiring is stagnant, it is both necessary and quite frankly, long over-due to institute a pay-freeze for the federal workforce. As Republicans outlined in our Pledge to America there are a number of actions the President and Congress should immediately act on to demonstrate a real commitment to reigning in the excessive growth and spending of the federal government.
“To put this in perspective, the Obama Administration says this two-year pay freeze will save $2 billion, however, just last week, OMB released a report revealing that the federal government’s improper payments for FY-2010 totaled $125 billion, $15 billion higher than the previous year. It is unthinkable that we have come to accept having a bureaucracy that has institutionalized waste, fraud and abuse to the point where $125 billion in improper payments were made last year. The first place we should look to make progress on higher costs, increased debt and a stagnant economy is look inward at how taxpayer dollars are being spent and doing more to ensure that tens of billions of dollars are no longer erroneously paid out.”
We need a pay freeze a lot less than we need a reduction in the size of the federal workforce and a smaller, more effective government focused on areas of its actual jurisdiction. We need a federal government able to account for its money more successfully than the one we have built to this point. COLA freezes aren’t a solution’ they’re a way to look busy while business goes on as usual.