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Trump’s Executive Order Freezing Federal Pay Saves Taxpayers From Extraordinary Pay Increases

Posted on Thursday, January 3, 2019
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by Outside Contributor
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Trump rule tax dollars abortion providers medicaid tax cuts socialist Venezuela sanctions executive order federal pay increasesPresident Donald Trump issued an executive order effectively freezing federal pay for 2019 at current 2018 levels.

Had the president not issued this executive order (and lacking congressional action on federal pay), federal workers would have received a 2.1 percent across-the-board pay increase, as well as a 25 percent increase in locality-based pay.

A 2.1 percent across-the-board increase would have cost roughly $5 billion in 2019 while the locality-based increase would have cost a reported $26 billion.

That exceptional pay spike would have kicked in had the president not acted and had the default changes specified in the 1990 Federal Employees Pay Comparability Act kicked in instead. That act provides for annual federal pay increases based on the Bureau of Labor Statistics’ Employment Cost Index, which tracks civilian employment costs.

Despite the specified formulaic federal pay increases, federal pay has more recently been set by presidents through their authority to propose an alternative pay schedule.

As has become the norm in recent decades, presidents typically set their own pay proposal by Aug. 31 and barring alternative congressional action on federal pay before Dec. 31, the president’s proposal goes into effect.

Although Congress typically defers to the president’s proposal for federal pay, it has the authority to set its own federal pay schedule or to override the president’s alternative plan. Of course, the president still has to sign that bill.

In his first year in office, Trump specified a 1.9 percent federal pay increase for 2018, including a 1.4 percent across-the-board increase and 0.5 percent distributed to locality-based pay.

During the Obama administration, federal employees had three consecutive years of pay freezes from 2011 to 2013, with average increases of 1.5 percent in the other five years.

Thus far in 2018, the Senate enacted a 1.9 percent federal pay increase as part of its budget, but the House failed to address federal pay, effectively endorsing the president’s proposed pay freeze.

Congress could still pass a budget including a federal pay adjustment in the last remaining days of 2018, but given the partial government shutdown, it seems unlikely that federal pay will become a priority.

A retroactive pay increase would be possible—that happened in 2003 and 2004 under the George W. Bush administration when Congress similarly hadn’t passed funding bills by the end of the year.

It seems less likely in 2019, however, that Congress would enact and the president would sign a retroactive federal pay increase given the administration’s clear directive for a freeze.

Federal pay should depend on workers’ skills, experience, and performance—not just their years of service and across-the-board annual pay increases.

Ideally, Congress should address federal employee pay and compensation through a broad reform package—addressing not only federal pay, but total compensation also including retirement, health, vacation, and other benefits—that would better align federal compensation with that of the private sector and better tie pay to performance.

Absent significant congressional action to improve the efficiency and effectiveness of federal compensation, the president’s pay freeze makes sense, both as a way to close the growing gap between federal and private sector compensation, as well as to reduce excessive government spending.

Congress would be wise, however, to grant the president his proposed $1 billion interagency workforce fund as a replacement for across-the-board pay raises.

The proposed fund would serve as a way to inject some measure of performance-based pay into the federal system, and to reward and retain the most highly-skilled and highly-performing federal workers.

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Jvaughn
Jvaughn
5 years ago

Same old junk. Nothing gets done. When are they going to get of their dead butts and eliminate the social security windfall tax that congress and senate had instituted to steal from our social security. All they have done is steal from the social security and misspent into their own pockets. They need to quit jerking around and get things done

Marsha Files
Marsha Files
5 years ago

Thank God for the business and financial knowledge of our illustrious leader, Donald J. Trump. What he will have saved in pay increases in an already overpaid bunch of sycophants could pay for the wall.

ripcon
ripcon
5 years ago

A pay increase for the fed should be solely based on performance in grade and difficulty, cost of living also should play a part. The GOV. is too easy at giving themselves a raise. SSDI could use one.

General Patton
General Patton
5 years ago

Our ridiculously overpaid federal workers–pure politics.

Linda
Linda
5 years ago

Ty, President Trump!

Jan13
Jan13
5 years ago

That 5 billion saved can be put toward the Wall…

Sharon Fultz
Sharon Fultz
5 years ago

I’m glad someone with business sense is in office like President Trump. Where I worked I never got a raise every year, sometimes it was three or more years. If profits weren’t there then there was not a raise that year. It was also based on your skill level and what you had achieved or progressed in. This B/S about Congress and Senate voting their own raises is also not right. We the people should vote for that. If they get a raise Social Security Retirement should. They should also have to pay back with interest all the money they took out of Social Security from where ever it was loaned to.

Hal
Hal
5 years ago

Well here we go again , my republican party will take no action to help us or Pres. Trump do anything . They are crashing and burning with Sen. Lindsey Graham at the wheel .

hopper
hopper
5 years ago

Although I agree with the comments that raises should be granted to Fed employees based on performance, I also know that many supervisors in the Federal workforce don’t like to take the time to write up the justifications to support a performance based raise thus affecting the employee pay. So there will be performance based pay for federal employees but shouldn’t Congress also have to live by this standard also ? Has their self imposed 5 percent annual pay raise been abolished?

JKT
JKT
5 years ago

Fed pay WILL become a priority when dem fed works miss two pay checks in a row They’ll blame the president but who will they go to for help? Never underestimate the Donald.

antimarxist
antimarxist
5 years ago

And if they don’t like it they can go get a job in the real world(private sector), where we have been dealing with no to very low raises for years!!!

Neil
Neil
5 years ago

The Cost of the Wall !!!

Alan Power
Alan Power
5 years ago

Federal employees did very well under Obama. Now it is the taxpayer to get a turn. Trump need to put a freeze on Fed employment.

Jill Moncilovich, PhD
Jill Moncilovich, PhD
5 years ago

So glad we have a business man that knows it is NOT just longevity in job, but skills and production as a reason to consider a pay raise. On the Congressional level those folks do NOT earn what they are getting now. I do wish their pay was held FIRST in the government shutdown.

Marianne
Marianne
5 years ago

They’re after President Trump because he’s doing what should have been done all through the years by Presidents with a conscience

michael failla
michael failla
5 years ago

i BELIEVE THAT SAVING WILL GO A LONG WAY TO PAYING FOR THE WALL. wHAT SAY YOU? Sorry about caps. unintentional.

bob
bob
5 years ago

The entire senate & legislative representatives should all forfeit their pay including the stipends they receive during this shutdown.
When they start conducting business and stop bickering along party lines and do what they were elected for then & only then will our country live up to the Constitution.
Pelosi & Schumer are only thinking of the next election. Look at the states they are from & see the mess they condone!

chaly
chaly
5 years ago

Why not make it fair and stop all pay raises in 2019. Why should those in power get some and others none! We could just make everyone work for free. Just think how much we could save there. Most of these negatives on government workers are B.S. because you haven’t a clue on pay rates unless you give up your increases. Maybe we should compare them, how ’bout it?

Thomas H
Thomas H
5 years ago

Why do I feel that the same media which was fine with ObeyMe freezing pay will now savagely attack Trump for doing the same thing?

Phyllis Sarvis
Phyllis Sarvis
5 years ago

Now that the federal employees do not get the 2.1% across the board raise saving us 5 billion dollars, WE HAVE THE MONEY FOR THE WALL!!!!!!!

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