In an effort to reduce the federal government’s $1.3 trillion deficit, the President announced this afternoon a pay freeze on federal salaries. Estimates are that the freeze would save the U.S. government $5 billion over the next two years, and $28 billion over the next five years. The White House also projects that the freeze will save more than $60 billion over the next 10 years.
Blacks, who the federal government employs at a higher proportion than any other group in the population at large, could be overwhelmingly impacted by today’s announcement. While Blacks make up just 12.9% of the U.S. population, 18% are federal workers.
Today’s decision, is perhaps, a signal from President Obama that he is serious about cutting spending, which was an element of his campaign promises during his 2008 run for office. Moreover, during the election season, the GOP successfully created an anti-government workers sentiment, orchestrating a political climate in which the federal government was criticized for paying salaries and pensions to government workers, items which were seen as contributing to the deficit.
As part of today’s announcement, the President reminded the public that when he started in office, he froze salaries for all senior White House officials. Since then, he has proposed an extension of the freeze to other top political appointees, and has eliminated bonuses for all political appointees.
“I did not reach this decision easily,” the President said. ” This is not just a line item on a federal ledger.” He went on to say,
These are people’s lives. They’re doctors and nurses who care for our veterans; scientists who search for better treatments and cures; men and women who care for our national parks and secure our borders and our skies; Americans who see that the Social Security checks get out on time, who make sure that scholarships comes through, who devote themselves to our safety. They’re patriots who love their country and often make many sacrifices to serve their country.
Congress would have to approve the freeze in order for it to be effective, a prospect that seems more likely under the Republican-lead Congress which will convene in January 2011. The GOP has been asking that government spending be returned to its 2008 levels, and this may be a step toward that effort.
“This is about finding ways to deal with deficit and cut spending,” said OMB Deputy Director for Management Jeffrey Zients ahead of the President’s announcement.
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 the military, the President announced.
There is a perception that government work is cushy, offers benefits and is more stable than work in the private sector. What’s more, the number of federal employees in the workforce has neither dramatically increased nor decreased during the history of the United States, which gives it an extra aura of job security. There are currently 1.9 million people employed by the federal government, without counting postal workers or military members.
“In these challenging times, we want the best and brightest to join and make a difference,” President Obama said. “But these are also times where all of us are called on to make some sacrifices [and] I’m asking civil servants to do what they’ve always done — play their part.”
Ordinarily, there would be concern that the government would risk losing good workers to the private sector when announcements like these are made. However, in these economic times, that may be less of an issue as people are more willing to stay put notwithstanding the cost cutting measure.