President Obama announced today that he is freezing federal pay for the next two years. This action will save $60 billion over the next ten years, and about $2 billion for the remainder of FY 2011.
This freeze will apply to all civilian federal workers, including those who work under alternative pay scales (such as those not in the G-S scale) and includes civilian workers in the Defense Department. According to the New York Times, the two-year pay freeze will affect roughly 2.1 million federal workers in total. The freeze effectively removes a 1.4 percent pay increase scheduled for 2011, but will not affect members of the armed services.
The White House said in releasing this news:
"This freeze is not to punish federal workers or to disrespect the work that they do. It is the first of many actions we will take in the upcoming budget to put our nation on sound fiscal footing -- which will ask for some sacrifice from us all."
This is a great first step in deficit reduction. While this will not by itself solve our long term fiscal problem, it is a great pyschological step towards that eventual goal. This plan also is a symbol that everyone must share in deficit reduction efforts going forward, especially when many believe that federal workers are paid more than private sector workers.
While this is largely a symbolic gesture in deficit reduction, CRFB applauds President Obama for taking this bold action.