President Obama announced a proposal for freezing the pay of civilian federal employees today. Reuters reports this announcement as a demonstration of “commitment to reining in the ballooning U.S. budget deficit.” The White House says its proposal will save $2 billion in the current fiscal year, and $60 billion over the next ten years.
The current federal budget is just over $3.8 trillion, with the government set to spend $1.25 trillion more than it takes in. This means President Obama’s pay freeze would trim about 1.5% off the annual deficit.
The average civilian federal employee currently earns $123,000 per year in salary and benefits, which is about double the average compensation of private-sector workers. Based on the average annual increase in pay for the private sector, which is about 45% over ten years, the federal salary freeze would have to last a couple of decades for private sector income to reach parity. There is also the question of the overall size of the federal payroll, which has exploded even as the private sector loses millions of jobs. A pay freeze will do nothing about the notorious difficulty of firing, or sometimes even reassigning, civil servants, even when they’re perched at money-bleeding agencies like the Post Office or Amtrak.
With these points in mind, a pay freeze is a decent first step on the road to spending reform. There is absolutely zero evidence, beyond watery rhetoric, that the White House sees it that way. Spokesman Dan Pfeiffer is quoted by Reuters as saying, “Just as families and businesses around the nation are tightening their belts in this economy, so must the government.” Declaring that you’ll spend a bit less money in the coming year is not “belt-tightening.” It’s a gesture of minimal restraint at best.
Of course, the Administration still blames its horrifying deficits and spending excess on George W. Bush, which is like a six-pack-per-day smoker blaming his emphysema on the bad lungs he inherited from his father. This is not to excuse the role of Bush, or his predecessors, in building our unsustainable federal government… but it’s neither useful nor fair to pretend Obama’s mad spending spree has any comparable precedent in recent history. A more encouraging sign of fiscal reform would be seeing this Administration take responsibility for its actions, and talk honestly about the horrendous misuse of the “stimulus” finds, which dwarf the potential savings from a federal pay freeze by a factor of over 300 to 1.
The L.A. Times has an interesting quote from Jeffrey Zients, deputy director for management of the Office of Management and Budget, which highlights the difficulty of serious federal spending reform. “Clearly this [pay freeze] is a difficult decision,” said Zients, adding that hard-working federal employees are “central to delivering services to the American people.” Certainly many federal employees are skilled, dedicated, and hard-working, worth every penny of their salaries. Expect to hear a great deal more about them as the Republicans press for a genuine reduction in the size of government, while the overpaid and underperforming flab of the federal government vanishes into the background.