Analysis: What the pay freeze means to feds

Monday - 11/29/2010, 8:03pm EST

Mike Causey, Senior Correspondent, Federal News Radio

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Jason Miller, Executive Editor, Federal News Radio

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The proposal to freeze federal civilian workers' pay for two years still needs congressional approval, but Federal News Radio's Mike Causey said the freeze is essentially a "done deal."

"I think whether it's the lame duck Congress or the one that takes office in January, either one would've voted for a pay freeze," Causey told the DorobekINSIDER.

The proposed freeze will not affect military personnel, postal workers or federal retirees. Retirees did not get a cost-of-living adjustment this year.

"Everybody's kind of in the same boat," Causey said.

Mixed reaction
Based on conversations with feds and comments on www.federalnewsradio.com, reaction to the proposed freeze has been mixed.

"Some will take it and say it's our duty and we're lucky we have jobs...others are outraged by it," Causey said.

Federal News Radio's Jason Miller told the DorobekINSIDER that feds want to know if others -- such as Congress or government contractors -- will also see a pay freeze.

Ultimately, the $5 billion savings is a "drop in the bucket" when faced with a $14 trillion deficit, Miller said.

Miller said he expects some "political games, some back and forth" before anything is a done deal.

Unions representing federal workers are against the freeze. In the past, the unions have supported Obama's actions but "today was the first time I saw the word 'decried,'" Causey said.

Furloughs next?
Causey said he does not expect the president to propose federal furloughs because he would have made that announcement today.

Furloughs are too disruptive to government functions, Causey said.

"They get your attention and may save money, but they're probably more trouble than they're worth," Causey said.

Causey said he thinks some lawmakers will still propose a furlough, but having a two-year pay freeze "takes a lot of the sting" out of the argument for a furlough.

Impact on hiring and retiring
A freeze puts government at a disadvantage when trying to recruit the best and brightest.

Feds who are stepping up a grade level will receive that raise from the promotion, Miller said. OMB tells Federal News Radio that step increases and within-grade increases will not be affected by the pay freeze.

Causey said a freeze will encouraged people who can retire to hang onto their jobs because they see how bad the economy is.

"The irony is this (pay freeze) may further reduce retirement," Causey said.

Two-year freeze would be unprecedented
Other presidents have proposed pay freezes but did not have congressional approval.

The last federal pay freeze was in 1986 during the Reagan administration.

President Clinton proposed a freeze in 1994 but Congress did not pass the proposal.

Causey said Congress could pass the two-year proposal and then vote to give a raise for the second year. But that's probably not going to happen, he said.

"Congress could do anything at anytime, but I don't see next year somebody saying, You know what, we should give those poor federal workers a raise," Causey said.

We want to know what you think as well. Is the pay freeze fair? Take our poll!

And be sure to check out Federal News Radio's Pay Debate Resource Page for the latest on this story.