White House proposal to end pay freeze draws mixed reactions

Federal employee groups had mixed reactions to the news Friday that President Obama will propose a pay increase for federal employees in his fiscal 2013 budget.

Advocates for federal workers were pleased with the news, first reported by The Washington Post, that the Obama administration is backing a 0.5 percent pay boost for civilian employees next year. Even so, some said they had hoped for a more generous pay raise in light of the current two-year federal salary freeze that began in January 2011.

Carol A. Bonosaro, president of the Senior Executives Association, called the news welcome, but wondered whether the small bump would be enough for federal employees. "At the risk of sounding ungrateful, don't spend it all in one place," Bonosaro said of the proposed 0.5 percent pay increase. "One would hope that if nothing else, it would cover any potential increase to health insurance premiums and retirement contributions." During the past year, many ideas have been floated in Congress and elsewhere that call for federal workers to contribute more to their health and retirement benefits.

Other federal employee groups echoed Bonosaro's sentiments. "Although we would have preferred a larger increase as prescribed by law, it is nonetheless a welcome development that the magnitude of federal employees' sacrifice in recent years is being acknowledged," National Federation of Federal Employees National President William Dougan said in a statement.

"The good news is that the pay freeze is ending, but I am disappointed at the size of the proposed 2013 increase," said National Treasury Employees Union President Colleen Kelley. She pointed out that the Employment Cost Index, which measures private sector wage growth, has increased during the past three years by 4.7 percent while federal workers have been subject to a two-year pay freeze.

A 1.6 percent pay raise for military service members recently went into effect, and recipients of Social Security benefits received a 3.6 percent cost-of-living allowance this year.

Carl Goldman, executive director of the American Federation of State, County and Municipal Employees Council 26, said he was pleased with the news, but called the proposed 0.5 percent pay bump "insufficient considering the large amount of money that federal workers have already contributed to deficit reduction."

International Federation of Professional and Technical Engineers President Gregory Junemann praised Obama for ending the two-year federal pay freeze. "Even though the deficit and economic turmoil our nation continues to face is not the fault of federal workers, they have patriotically stepped up to the plate by accepting the two-year pay freeze, which, at the end of the day, resulted in $60 billion in savings to the federal budget over 10 years," Junemann said.

An Office of Management and Budget official confirmed the accuracy of the Post report, but would not offer any more details on a proposed pay raise.

At least one lawmaker was less enthusiastic about the news. Rep. Dennis Ross, R-Fla., called Obama's reported decision to lift the federal pay freeze "pure politics" leading up to the 2012 election season. "Federal employees are paid better, receive better benefits and enjoy unparalleled job security, compared to their private sector counterparts," Ross said. "The day after he weakens our national defense, he gives government unions a raise. Astounding." Ross is the chairman of the House Oversight and Government Reform Subcommittee on the Federal Workforce, Postal Service and Labor Policy.

"Federal employees aren't overpaid government bureaucrats," said American Federation of Government Employees President John Gage. "They are the aircraft mechanics and commissary workers at local military bases, the nurses at the local VA hospital, the men and women guarding our borders, and the claims representatives who process Social Security and disability benefits." Gage called the proposed 0.5 percent 2013 pay raise a "positive step," but "minuscule."

The ranking Democrat on the House Oversight and Government Reform federal workforce subcommittee expressed concern that lower-paid federal workers would continue to bear the burden of the government's efforts to rein in spending.

"While inflation has remained low, many of these lower-paid employees have been able to tighten their belts and try to get by week to week," said Rep. Stephen Lynch, D-Mass. "While a one-half of 1 percent increase is better than zero, it is still extremely modest. If the economy continues to improve, inflation can quickly wipe out that increase."

It's unclear whether Congress will support an end to the two-year federal pay freeze regardless of Obama's proposal. Many congressional Republicans share Ross' view that federal employees receive generous compensation packages and should contribute more to deficit reduction. In December 2011, the House passed a bill that would have extended the current payroll tax cut for a year and partly financed it through a longer salary freeze for federal employees and lawmakers, along with a requirement that both groups contribute more to their government pensions. The Senate's version of the legislation did not include those spending offsets. At that time, Congress opted only to extend the payroll tax cut for two months without including any measures that would affect federal workers.

But House and Senate conferees the week of Jan. 16 will begin hammering out the details of extending the payroll tax holiday for a year. A prolonged federal pay freeze or other provisions to reduce government workers' pay and benefits could very well end up in a final deal to finance the yearlong payroll tax cut extension. One encouraging sign for feds: Rep. Chris Van Hollen and Sen. Ben Cardin, both Maryland Democrats, are conferees on the payroll tax cut extension discussion. The lawmakers represent many federal employees and are strong supporters of government workers.

"Hardworking federal employees already have made a $60 billion contribution to deficit reduction through the two-year pay freeze. They continue to be asked to do more for the American people with fewer resources," Cardin said. "News that the Obama administration will request a pay increase for fiscal 2013 -- albeit one that doesn't keep pace with inflation or private sector wage growth -- is a welcome acknowledgement that federal employees have made sufficient sacrifices to help solve our nation's fiscal problems."