Federal workers may not see pay raises for two years

Nancy Marshall-Genzer Nov 29, 2010
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Federal workers may not see pay raises for two years

Nancy Marshall-Genzer Nov 29, 2010
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Kai Ryssdal: The President of the United States makes $400,000 a year. The baseline congressional salary is $174,000. The real federal pay story of the day, though, is the two million civilian federal workers who aren’t going to be getting raises the next two years. President Obama called for a government pay freeze today as part of a way to cut deficits. Congress still does have to approve. But assuming they do, how much of a budget difference is this really going to make?

Marketplace’s Nancy Marshall Genzer has more.


Nancy Marshall Genzer:The Obama administration says the two-year pay freeze will save more than $60 billion over 10 years.

Chump change, says Steve Ellis of Taxpayers for Common Sense.

Steve Ellis: Right now, the federal government needs to be searching the couch cushions for any spare change. And the billions that would be saved by the pay freeze are certainly just spare change, but at this point we could take anything we can get.

Ellis says the president still needs to tackle the things that contribute most to our trillion dollar-plus deficit: Medicare, Social Security and the Pentagon. President Obama’s bipartisan deficit-cutting commission is scheduled to make recommendations this week, but it’s currently deadlocked.

Diane Lim Rogers is chief economist at the Concord Coalition. She says President Obama is taking the first shot in the deficit battles to come. But…

Diane Lim Rogers: It’s not going to help him avoid the need to address the tough choices about programs that benefit all Americans.

Alice Rivlin was President Clinton’s budget director. And she’s a member of the deficit commission. She says President Obama knows the pay freeze is just an appetizer on the deficit-cutting menu.

Alice Rivlin: The only question is, do we wait or do we act like grown-ups and pull up our socks and do it right now?

Washington isn’t known for grown-up behavior. But Rivlin says, if we don’t cut the deficit a lot, we’ll be in a deep debt crisis that forces us to grow up fast.

In Washington, I’m Nancy Marshall Genzer for Marketplace.

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