Obama cuts pay raises for federal workers

Obama cuts pay raises for federal workers

In an Aug. 31 letter to House Speaker Nancy Pelosi (D-Calif.), Obama said he would use his power to reduce the federal employee pay raise set for January 2010 from 2.4 percent to 2.0 percent.


“The growth in federal requirements is straining the federal budget,” wrote Obama. His letter said a 2.4 percent increase would cost $19.9 billion more than the 2 percent increase he proposed in his 2010 budget.

The Congressional Budget Office last week set the fiscal year deficit at $1.6 trillion, the highest deficit ever in the post-World War II era. The Office of Management and Budget estimated the 10-year deficit to 2019 had expanded from $7 trillion to $9 trillion.

Republicans have hammered Obama and congressional Democrats over the size of the budget deficit, and have used it to argue the national cannot afford healthcare reform. Democrats say their healthcare legislation will reduce costs and improve the country’s fiscal health in the long run.

The president can impose a new pay plan if he views the raises that would otherwise take place as being inappropriate because of a national emergency or serious economic conditions affecting the general welfare.”

Obama noted the 9.5 percent unemployment rate in June, and wrote that, “few would disagree that our country is facing serious economic conditions affecting the general welfare.”

In addition to citing the national unemployment rate, which dipped to 9.4 percent in July, Obama said his decision was also based on the state of emergency the nation continues to endure following the terrorist attacks of Sept. 11, 2001.

Obama said he did not believe the change in the planned raises would hurt the government’s ability to recruit and retain well-qualified employees. He is required to make that determination under law.

House members from districts full of federal employees have called on the White House in future years to provide the same increases to civilian federal employees that it seeks to give to members of the military. The 2010 budget passed by Congress follows Obama's proposal to increase military pay by 2.9 percent and federal civilian pay by 2 percent.

Spokespersons for House Majority Leader Steny Hoyer (D-Md.) and Rep. James Moran (D-Va.) said that the lawmakers understood the need for small pay increases during the recession, but they're looking forward to working with the White House on pay parity for military and civilian workers in future years.

"Though [Hoyer] believes it was reasonable to have a smaller adjustment this year during a time of national economic hardship, he was extremely disappointed the administration did not follow pay parity," said Stephanie Lundberg, a Hoyer spokeswoman.

Walter Alarkon contibuted to this article.

This story was updated at 5:59 p.m.