Pay freeze idea gets chilly reception

President Barack Obama today proposed freezing the pay of federal employees for two years.

“I’ve asked the civilian servants to do what they’ve always done: play their part,” Obama said in a press conference.

The freeze must be approved by Congress, and it would affect civilian employees’ pay in fiscal 2011 and 2012.

Obama and his officials expect the freeze to save $2 billion for the remainder of fiscal 2011. The government may save as much as $3 billion in 2012. Looking further down the road, Obama’s proposal might save as much as $28 billion during the next five years and more than $60 billion during the next decade, based on current savings trends.

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The president said he did not arrive at his decision easily.

“This is not a line item on a federal ledger. These are people’s lives,” he said.

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 will not be affected by the freeze, the president said.

The reactions to Obama's announcement were mixed. Steny Hoyer, the House majority leader, supported Obama’s decision, although he said the president would find greater savings by freezing the pay of both civilian employees and military personnel, except those in war zones overseas.

There has been parity between civilian and military pay raises for 22 of the past 28 years in which raises were authorized, and hundreds of thousands of federal civilian employees work alongside military employees in DOD and other agencies, he said.

“It would have added an element of fairness,” he said in a statement.

The National Treasury Employees Union disagreed overall with Obama’s move and said it would work with members of Congress to overturn the decision.

“NTEU is mindful of our nation’s economic circumstances, but we are very disappointed with the White House’s position and intend to explore all of our options,” NTEU President Colleen Kelley said.

Kelley said she was concerned about the ability for agencies to hire new employees because there would be no pay raises until at least 2013.

“Our government needs to be able to hire and keep talented and skilled employees, and worsening federal pay will make that much more difficult,” she said.

However, Jeffrey Zients, federal chief performance officer and deputy director for management at the Office of Management and Budget, was sure agencies still could attract highly skill employees. People come to work for the government for more than pay, he said.

“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 current difficulties in recruiting new employees.

Hoyer said he planned to review Obama’s proposal "for its balance between fiscal responsibility and the need to recruit and retain a federal workforce able to provide the level of service that the American people expect."

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

John Gage, president of the American Federation of Government Employees, called the administration's decision a "panicked reaction" to the commission and nothing more than political public relations.

Overall, the freeze is a part of 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 in more than 120 programs. The administration has also been making efforts to reduce the amount of money the government spends improperly.