Feds could see pay freeze

President Barack Obama has proposed a freeze in civilian employees’ pay for fiscal 2011 and 2012, administration officials said today.

The administration expects the freeze to save $2 billion for the remainder of fiscal 2011, said Jeffrey Zients, federal chief performance officer and deputy director for management at the Office of Management and Budget. Looking further ahead, he said government may save as much as $3 billion in 2012. Based on current savings trends, Obama’s proposal might save as much as $28 billion during the next five years, and more than $60 billion during the next decade, Zients said.

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The freeze would apply to all civilian federal employees, including those in various alternative pay plans and those working at the Defense Department. However, military personnel won’t be affected by the freeze, Zients said. He added that the freeze would not apply to promotions.

"This is clearly a difficult decision," he said. "The president is asking them to make a sacrifice."

The president was expected to make an announcement about the pay freeze later this morning.

"The freeze will not get in the way of bringing in talented people," Zients said, seeking to reassure those who worry about the overall capabilities of the federal workforce and already-troublesome difficulties in recruting new hires.

Zients said officials made the announcement today based on a legal deadline to submit information on pay to Congress. It is not directly tied to possible proposals from the National Commission on Fiscal Responsibility and Reform (better known as the Debt Commission) on ways to save money the government money, he said.

Overall, the freeze is a part of the Obama’s Accountable Government Initiative to cut costs, save money and do more with less in the federal government. The president has already frozen pay increases for senior White House officials. He suggested approximately $20 billion in terminations and reductions of federal programs, encompassing more than 120 programs. The administration has been making efforts to reduce the amount of money the government sends out improperly.