Finance

Trump nixes federal pay raise

President Trump on Thursday announced that he would cancel a scheduled 2.1 percent across-the-board pay increase for federal workers, as well as locality pay increases.

"In light of our Nation's fiscal situation, Federal employee pay must be performance-based, and aligned strategically toward recruiting, retaining, and rewarding high-performing Federal employees and those with critical skill sets," Trump wrote in a letter to the Speaker of the House and the president of the Senate.

The proposal sets up a fight with Congress, which could effectively overturn the action in upcoming spending legislation. Without such intervention, the move would affect most of the 2.1 million federal employees around the nation, about 1.7 million of which live in areas outside of the Washington, D.C., metro area.

Members of the military, on the other hand, are on schedule to receive a 2.6 percent pay increase.

Last year, the Trump administration approved a 1.4 percent increase in federal pay and a 2.4 percent increase in military pay.

In the letter, Trump said he had the authority to propose an alternative pay schedule based on Title V of the U.S. Code, which allows the president to alter scheduled pay changes he deems inappropriate in light of "national emergency or serious economic conditions affecting the general welfare."

Trump's 2019 budget proposal sought to freeze federal pay, but the Senate Appropriations Committee included a 1.9 percent pay bump in its spending plans for 2019. The House version of the bill did not include such an increase, and sought reductions to spending on federal pension plans.

The two chambers are scheduled to meet in the coming weeks to work out the differences between their bills, negotiations which could effectively override Trump's move to cut pay. Trump has not indicated if he would veto such a measure if it included a pay increase. 

Democrats, and some Republicans, blasted the move.

"For someone who claims to be a leadership maven, President Trump certainly gives the impression through his actions that he has no idea how to run an effective organization," said Rep. Steny Hoyer (D-Md.), the No. 2 Democrat in the House.

"Cutting federal pay is not the way to run the best government possible or to recruit and retain the most talented Americans to serve their fellow countrymen," he added.

Rep. Eric Swalwell (D-Calif.) wrote in a tweet that Trump's actions "screwed" federal employees.

"To the hard-working federal employees Trump just screwed by cutting pay - the folks who run our parks, protect our communities, & serve our veterans: YOU MATTER. If billionaires can get tax cuts, you should get a [cost of living adjustment]. You work hard for America & that should add up to something," he wrote.

Rep. Barbara Comstock (R-Va.) said she was strongly opposed to the move, arguing that GOP support for federal workers should extend beyond ICE and homeland security officials.

"Dedicated work is also done by our civilian employees at other national security agencies, the FBI, DEA and other law enforcement agencies, as well as the National Institute of Health where dedicated federal employees search for cures to diseases that drive up the costs of health care everyday," she said.

"We cannot balance the budget on the backs of our federal employees and I will work with my House and Senate colleagues to keep the pay increase in our appropriations measures that we vote on in September," she added.

The American Federation of Government Employees (AFGE), the nation's largest union representing federal employees, urged Congress to override the move and stick to the Senate's pay proposal.

 

"President Trump's plan to freeze wages for these patriotic workers next year ignores the fact that they are worse off today financially than they were at the start of the decade," said AFGE National President J. David Cox Sr. 

 

"Federal employees have had their pay and benefits cut by over $200 billion since 2011, and they are earning nearly 5 percent less today than they did at the start of the decade," he added.

 

The federal deficit has exploded under Trump, with the advent of the GOP tax law that is projected to cost $1.9 trillion over the course of a decade, as well as a bipartisan spending deal that increased discretionary spending by nearly $300 billion in 2018 and 2019.

-- Updated at 4:39 p.m.

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