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

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 16,513.41 -49.89 -0.30%
Nasdaq 4,347.36 -22.41 -0.51%
S&P 500 1,927.44 -3.23 -0.17%
Treasuries 2.50 -0.06 -2.35%
Data as of 1:43pm ET
Company Price Change % Change
Bank of America Corp... 14.92 -0.33 -2.16%
Apple Inc 95.84 0.24 0.25%
Facebook Inc 72.20 -0.45 -0.62%
General Electric Co 25.26 0.11 0.44%
Ford Motor Co 16.76 -0.27 -1.56%
Data as of 1:28pm ET

Sections

How do you say licensing in Dothraki? Now superfans can learn the language, which is spoken only on HBO's hit series. More

The U.S. economy added 209,000 jobs in July. But that's lower than the number of jobs added In June ... and it was not as strong as what economists expected. More

Terrell White has had a profit-sharing plan for his employees since 1981, believing that if the staff isn't happy, guests won't be either. More

Get paid to go on vacation, receive a couple of bonus weeks at the end of the year or take as much time as you need. Such vacation policies are more than a dream at some small, niche -- and often tech-based -- companies. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.