Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Congress freezes federal pay

By Charles Riley, staff reporter


NEW YORK (CNNMoney.com) -- It's official: Federal workers won't be getting a pay increase for the next two years, despite the best efforts of the unions that represent them.

First proposed by President Obama three weeks ago, the freeze required the approval of Congress. On Tuesday, both chambers passed a short-term budget fix that included the pay freeze.

Once President Obama signs that bill, it's a done deal.

And federal workers are none too happy.

"We are suffering the same hardships as many across the nation as a result of the recession, and it's unfair and unfortunate that Congress has chosen to single these folks out," said William Dougan, president of the National Federation of Federal Employees.

According to government data, average employees are likely to be in their mid-40s.

They work in management, business or financial positions at the Department of Defense, Veterans Affairs or Homeland Security. They tend to have graduated from college, live outside of Washington and are white.

The average federal worker makes around $74,000 a year.

Federal workers will remain eligible for bonuses as well as promotions along the federal step ladder system. Those promotions are based on job performance and time spent in the position.

The freeze, which would save $60 billion over 10 years, would make a small dent in the nation's debt problem. Budget experts say nearly $6 trillion in deficit reduction is needed to stabilize the debt, so the new proposal achieves less than 1% of what's ultimately needed.

Still, some fiscal experts say it's an important step to help generate taxpayer support at a time when policymakers will need to make numerous difficult decisions about curbing the debt.

At the time of his announcement, Obama said the cut was the first of many.

"The hard truth is that getting this deficit under control is going to require some broad sacrifice," Obama said. "And that sacrifice must be shared by the employees of the federal government."

But the unions haven't taken the freeze lying down. Dougan said his members have been working hard over the last three weeks to lobby members of Congress against the measure.

"We've been communicating with our members and asking them to contact elected officials in Congress," Dougan said. "We've had numerous e-mail and fax campaigns going on."

Dougan's union, which represents 110,000 federal workers, isn't the only group lobbying Congress.

Earlier this month, the National Treasury Employees Union sent a letter to every lawmaker on Capitol Hill.

"Freezing wages over the next two years will not serve the interests of the taxpayers," wrote Colleen Kelley, the group's president. "And will cost us more in reduced services and lost talent from those who choose to retire, just when the government needs them more than ever."

With the battle over, Dougan sees the loss in political terms.

"The Obama administration basically traded freezing pay of the federal workforce for concessions out of Republicans," he said, noting recent compromises over tax cuts and extending unemployment benefits.

The outcry from his members sparked little sympathy from Democrats in Washington, Dougan said.

"Nobody from Congress has contacted us ... it's been eerily quiet," he said. To top of page

Index Last Change % Change
Dow 16,528.03 -114.98 -0.69%
Nasdaq 4,776.51 -51.82 -1.07%
S&P 500 1,972.18 -16.69 -0.84%
Treasuries 2.20 0.01 0.64%
Data as of 6:49am ET
Company Price Change % Change
Bank of America Corp... 16.34 -0.02 -0.12%
Freeport-McMoRan Inc... 10.64 0.14 1.33%
Apple Inc 112.76 -0.53 -0.47%
Intel Corp 28.54 0.12 0.42%
Ford Motor Co 13.87 0.13 0.95%
Data as of Aug 31
Sponsors

Sections

Blue Apron, Boxed, and Nature Box are worth an estimated $2.5 billion. Their co-founders all went to the same high school. More

How do you run a successful crowdfunding campaign? Indiegogo's CEO Slava Rubin offers his top tips and mistakes to avoid. More

Looking for something good on Netflix? These entertaining films will help you learn more about finance and investing. More