Cuts to federal pay may hurt public services, CBO warns supercommittee

Thursday - 10/27/2011, 7:54am EDT

Emily Kopp, reporter, Federal News Radio

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Cuts to federal pay would hurt government programs down the road, the Congressional Budget Office director warned the supercommittee, tasked with cutting the federal deficit.

Doug Elmendorf offered this warning during a rare public hearing of the Joint Select Committee on Deficit Reduction, which is supposed to unveil its deficit-cutting plan by Nov. 23.

"Lowering pay rates for federal civilian employees could hamper efforts to recruit and retain workers [particularly in some occupations], which could reduce the overall skill level of the federal workforce over time," Elmendorf said in his written testimony. "Having fewer federal workers would probably lower the levels of service that federal agencies provide to the public, unless cuts in the agencies' workforce were accompanied by actions to enhance productivity."

Republican lawmakers have suggested that the supercommittee extend the a less generous retirement package.

The hearing focused on potential cuts to discretionary spending, which makes up 40 percent of federal spending.

"In many respects, today we may be debating the pennies, nickels and dimes in a debt crisis that is demanding half-dollars and dollar bills," said committee co-chairman Rep. Jeb Hensarling (R-Texas)

More than half of the $1.3 trillion in discretionary spending goes to defense, according to the CBO. The rest is low-hanging fruit for lawmakers.

"Listening to the debates here in D.C. over the past few months, you would think this small piece of the pie was a whole lot bigger," said committee co-chairwoman Sen. Patty Murray (D-Wash.) "Congress has gone to this relatively small pot with cuts and spending caps again and again while leaving many other pieces of the budget essentially untouched."

This part of the pie, she said, was not enough to erase the deficit, and suggested that tax revenue and cuts to mandatory programs would have to be in the solution.

Republicans have refused to consider tax increases.

Twice, protesters disrupted the public hearing. They urged lawmakers to tax the rich and cut defense spending.

But lawmakers gave no hint of the path they may take, and their comments indicated they were far from agreement.

Murray said they were working hard to come up with a bipartisan plan with a chance of getting through Congress.

"We aren't there yet, but I am confident that we are making progress and I'm hopeful that we are moving quickly enough to meet our rapidly approaching deadline," she said.

If the supercommittee fails to submit a plan to Congress, or Congress fails to pass it, it will trigger automatic across-the-board spending cuts throughout the government.

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