Lawmakers try to water-down the pay freeze

Wednesday - 12/8/2010, 7:13am EST

WFED's Jason Miller with Tom Davis, director, Deloitte and Touche

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By Jason Miller
Executive Editor
Federal News Radio

The eight Washington D.C. area lawmakers who wrote a letter to the Appropriations Committee asking for only a one-year pay freeze for federal employees instead of a two-year stoppage may have timed their request perfectly.

The Appropriations Committee wants to take up an omnibus spending bill for all federal agencies before Congress finishes out the 111th session in two weeks.

"[Rep.] Steny Hoyer (D-Md.) is still the majority leader and with the budget pending, it could be possible that it is resolved in next few weeks," said Tom Davis, a former Republican Congressman from Virginia and now director of federal government affairs for Deloitte and Touche. "They may have an opportunity to put this into the appropriations bill if they end up with a resolution."

But Davis also said the letter could end up being just an attempt to "show the flag" for their heavily-federal constituents.

"If they do a continuing resolution to February or March, as far as the House goes, it will not have the same relevance," he said. "They will have [Rep.] Frank Wolf (R-Va.), who is on the Appropriations Committee, but the Democrat leaders will have little say in what happens."

In their letter to outgoing Appropriations Chairman David Obey (D-Wis.), Hoyer, Wolf and six others say federal employees are being targeted unfairly.

"Despite politically motivated claims to the contrary, Bureau of Labor Statistics data show that federal employees are paid 24 percent less than their private sector counterparts, a disparity that has increased over the past year," the letter states. "Every day federal employees provide vital services that help keep our nation healthy, safe and strong. We therefore believe that any adjustment to federal employee compensation should be reviewed on an annual basis."

The lawmakers also asked Obey and the committee consider federal pay adjustments in the "context of a more comprehensive approach to deficit reduction."

Jack Lew, the director of the Office of Management and Budget, submitted a legislative proposal to Capitol Hill Dec. 3 asking for the two-year pay freeze.

"Notwithstanding any other provision of law, no statutory adjustment shall be made during the period beginning on January 1, 2011, and ending on December 31, 2012, to any pay system or pay schedule covering employees of the Executive branch," Lew wrote in the proposal.

An administration official said OMB will provide agencies with more guidance once the legislative proposal becomes law.

The Appropriations Committee did not answer several requests for comment on the letter and the legislative proposal.

But either way federal employees should expect to continue to be targets of cuts.

"It's pretty serious this time," Davis said comparing this year to others when Congress attempted to cut spending through federal employee pay and benefits. "Federal employees are on the chopping block. The administration put them front and center because they afraid to address other areas of spending. When it comes to federal employees, the administration assumes they will be with them anyway and they are a smaller group than Medicare or Medicaid in terms of a voting bloc."

Davis said feds are politically low on list of difficult choices so they are most vulnerable.

"The debt issues are serious enough and cutting federal workers' pay is politically palatable enough to most members of Congress," he said.

Additionally, Davis said he wouldn't be surprised if lawmakers also go after employees' transit allowance, parking payments and even try to freeze the amount of health benefits employees receive.

One area where lawmakers will not be successful is in cutting federal pay, he said.

Rep. Jason Chaffetz (R-Utah) proposed cutting federal employees' pay by 10 percent.

"Members need to understand the way business and government work," Davis said. If you start giving people pay cuts you will lose a huge brain drain and it will hurt your ability to get things done. It doesn't mean you won't have someone out there shooting their mouth off about that, but I don't think it's a possibility."

Davis said he would advise federal employees not to sit back and let the pay freeze and other reductions happen. He said if you sit back and let things happen, Congress will take larger bites each time.

"What you see right now when you look at Congress and the fact that they just agreed with the Obama administration and Republican leaders to extend the tax cuts for two years, to extend unemployment benefits, doctors got Medicare extensions, there is a AMT patch on the way, businesses are getting a rate reduction and tomorrow Congress will vote to give seniors a $250 one-time social security check, everyone is at the buffet table and federal employees are being put on a diet," Davis said. "That is hard to swallow."