Feds could see extended pay freeze in new proposals

Federal employees could soon see the current pay freeze extended by up to three years beyond its original planned termination, if the so-called "supercommittee"decides to implement some senators’ proposals on how to reduce the federal deficit.

Sens. Joseph Lieberman (I-Conn.) and Susan Collins (R-Maine), chairman and ranking member of the Homeland Security and Governmental Affairs Committee, on Oct. 14 presented the Joint Select Committee on Deficit Reduction with a proposal they said was necessary to save the nation from “fiscal disaster.”

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In their plan, the senators suggested extending the current federal pay freeze for fiscal years 2011 and 2012 for an additional year, which they said could save $32 billion “without significant disruption to agency mission and activities." Federal employees, as well as members of Congress, “must sacrifice as part of an urgent need to curtail the cost of the federal government and reduce the national debt,” the lawmakers wrote in their letter.

The senators gained support from Rep. Darrell Issa (R-Calif.), House Oversight Committee chairman, whose separate proposal on Oct. 14 laid out ideas for how the government could save $375 million over a 10-year period. Issa’s recommendations include extending the pay freeze through fiscal 2015 and reducing the federal workforce by one-tenth through attrition.

But some experts say the proposed extension would do more harm than good, especially when the federal workforce has already gone through sacrifices.  

“Federal employees by and large took the two-year pay freeze very well; they understood that they had to sacrifice along with everybody else,” said John Palguta, vice president at the Partnership for Public Service. “But three years would be a hardship for many, and five years just really exacerbates everything.”

One alternative to the extended pay freeze from a management perspective would be to give federal agencies budget targets and let them figure out how to best find meet them, as seen during the Clinton administration when some agencies decided to close some regional offices or merge with other offices to achieve cost savings, Palguta noted.

“That’s a good management way, but for someone to say, ‘we’re going to freeze pay and we’re going to tell you the other ways that you’re going to save money’ is less satisfying,” Palguta said. “It was fine for the president to suggest as the chief executive of the government that he wanted to save money through the pay freeze. Once you start going for an extended pay freeze, then you have to start weighing the costs of that – the ability for agencies to recruit and retain.”