President's budget makes pay raise proposal official

Ron Edmonds/AP

This story has been updated.

President Obama has proposed a 0.5 percent pay raise for federal workers in 2013, ending a two-year civilian pay freeze that began in 2011.

The White House’s fiscal 2013 budget request, however, also includes a proposal to increase the amount federal employees contribute to their government pensions by a total of 1.2 percent over three years beginning in 2013. The administration estimates the increase would save the government $27 billion over the next decade; officials estimate the current two-year pay freeze will save $60 billion over 10 years.

Neither proposal comes as a big surprise. In January, The Washington Post reported the administration would propose a 0.5 percent pay raise in its budget, and the White House has said it opposes legislative efforts to extend the current salary freeze.

In September 2011, Obama released a deficit reduction proposal that recommended increasing the amount federal employees contribute to their pensions over three years at a rate of 0.4 percent annually beginning in 2013. “While federal agency contributions for currently accruing costs of employee pensions would decline, these employers would pay an additional amount toward unfunded liabilities of the retirement system that would leave total agency contributions unchanged over the 10-year budget window,” the plan stated.

At the time, Obama called the changes “modest adjustments to federal retirement programs.”

In addition, the president's fiscal 2013 budget would eliminate the Federal Employees Retirement System Annuity Supplement for new employees. That recommendation also was in the September deficit reduction plan.

“Overall, these changes are not expected to have a negative impact on the administration’s ability to manage its human resources, nor inhibit the government’s ability to serve the American people,” the budget document stated.

The president also is recommending the creation of a Commission on Federal Public Service Reform to look at ways to modernize federal personnel practices in areas including compensation, performance and mobility.

Federal employee unions praised the Obama administration’s support for ending the pay freeze, but were not pleased about the recommendation to increase the amount workers chip in for their pensions. “We are disappointed that the administration is asking federal employees to once again shoulder the burden of our deficits by increasing their pension contributions with no corresponding increase in the benefit,” said Matt Biggs, legislative and political director at the International Federation of Professional and Technical Engineers.

“This attack on federal retirements is a sop to the right wing,” said John Gage, president of the American Federation of Government Employees. “The GOP has insisted on huge federal retirement cuts in the highway bill and payroll tax conference, and this only serves to fan the flames.”

There are several proposals pending in Congress that would extend the federal pay freeze and raise the amount feds contribute to their retirement benefits. For a list of some of those proposals, see our Feb. 9 Pay and Benefits Watch column.

“Some people may say that at least it’s not as bad as the Republican proposals,” said Carl Goldman, executive director of the American Federation of State, County and Municipal Employees Council 26. “That’s a heck of a standard to judge what is correct and just.”

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.


When you download a report, your information may be shared with the underwriters of that document.