Sens. Barbara Boxer, D-Calif., and Charles Grassley, R-Iowa, along with Rep. Paul Tonko, D-N.Y., urged the Joint Select Committee on Deficit Reduction to decrease the limit on the amount federal agencies can reimburse contractors for executive salaries significantly from the current ceiling of about $700,000, though they did not name a dollar figure. They also asked the committee to propose applying the cap more broadly.
President Obama has proposed a $200,000 limit on the amount the government can reimburse contractors for the salaries of their top five executives, equal to the pay level for a Cabinet secretary. The lawmakers praised Obama's plan as "a good start," but called for the super committee to expand the cap to include all contractor employees, not just the five highest paid.
"We do not believe that taxpayers should fund government reimbursements for private contractor salaries that are more than three times higher than the pay earned by Cabinet secretaries," the letter stated.
The letter comes nearly one month after the lawmakers asked the Office of Management and Budget to make a determination for the maximum allowable compensation for contractor executives for fiscal 2011. Boxer's office told Government Executive the senator has yet to receive a response from OMB.
In a statement, the American Federation of Government Employees praised Boxer, Grassley and Tonko for their letter. "Federal employees have had their own salaries frozen for two years to help reduce the deficit, yet nothing is being done to trim out-of-control contractor spending," AFGE National President John Gage said.
Stan Soloway, president and chief executive officer of the industry group the Professional Services Council, called the letter's blanket cap argument "completely illogical," saying that the federal government already is unable to compete on a financial level with the private sector, and the proposed ceiling would hinder small and mid-level contractors who can't afford substantial hires without government reimbursements.
"The government clearly lags behind the commercial marketplace and what it pays for talent, particularly higher-end, sophisticated talent," Soloway said. "You really now [would] inhibit companies from hiring the best talent they can get."