US President Obama today froze the pay of all civilian federal employees for the next two years.
According to the White House, the pay freeze will save $2 billion for the remainder of FY 2011, $28 billion over the next five years, and more than $60 billion over the next 10 years.
The freeze applies to all civilian federal employees, including those working for the Department of Defense. It does not include military personnel.
According to the federal Census Bureau, as of 2008, the United States government had over 2.5 million full-time employees and close to 2.8 million employees both full-time and part-time.
The greatest number of full-time civilians, 699,039, work in the defense/international relations field, while another 587,768 civilians work for the U.S. Postal Service.
The total payroll for all full-time and part-time U.S. government nonmilitary employees was $15.47 billion in 2008.
This was a decision that was not made lightly, the White House said in a release.
This freeze is not to punish federal workers or to disrespect the work that they do. It is the first of many actions we will take in the upcoming budget to put our nation on sound fiscal footing - which will ask for some sacrifice from us all, the White House statement said.
The administration noted that it had inherited a $1.3 trillion projected deficit and an economic crisis that threatened to put the nation into a second Great Depression.
Because of moves taken by the President, the economy is growing again and the private sector has been adding jobs for the past 10 months, the White House said.
But families and businesses are still hurting, and our top priority is making sure that we are doing everything we can to help boost economic growth and spur job creation, the administration said.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, called the move an important step.
Other countries have found the fiscal consolidation experience is aided by including public sector workers in the changes, and the savings - while not massive - are certainly helpful, MacGuineas said. Let's hope there is more to come.
The White House characterized the freeze as the latest step in the administration's Accountable Government Initiative to cut costs, save taxpayer dollars and do more with less in the federal government. Prior steps, according to the administration, include:
- Upon taking office, the President froze salaries for all senior White House officials; in last year's budget, he proposed to extend this freeze to other top political appointees; and he eliminated bonuses for all political appointees.
- The President directed agencies to dispose of excess real estate to save $8 billion over the next two years.
- The President set an aggressive goal of reducing improper payments by $50 billion by the end of 2012.
- In each of his budgets, the President put forward approximately $20 billion in terminations and reductions, encompassing more than 120 programs all of which have strong supporters.
The President's appointed commission on dealing with the nation's long-term fiscal health is due to make its report and recommendations later this week.