House passes 2012 budget with staff cuts, 3-year pay freeze

By Jolie Lee
Federal News Radio

The House passed a fiscal year 2012 bill today that freezes federal pay for three years and cuts the federal workforce by 10 percent through attrition.

The budget plan by House Republicans – called the Path to Prosperity – also requires federal employees to pay for half of the defined benefit they receive at retirement.

The GOP plan proposes a plan that promises $6 trillion in spending cuts over the next decade compared with the budget President Obama unveiled in February.


The final vote in the House was 235-193.

The National Treasury Employees Union called passage of the resolution a “mistake for America.”

“Apart from the broad social changes the resolution seeks to make, its anti-federal employee provisions would result in federal agencies having great difficulty not only in retaining the highly-skilled, dedicated employees they now have, but in recruiting new talent to the government,” said NTEU President Colleen Kelley in a statement.

Here is an excerpt from the Path to Prosperity that deals with federal employees’ pay and benefits:

Slowing the bureaucracy’s explosive growth

The federal government has added 155,000 new workers since the President took office. It is no coincidence that private-sector employment continues to recover only sluggishly while the government grows at breakneck speeds. To fuel the public sector’s growth, Washington must either tax the private sector or issue debt (i.e. impose a deferred tax upon the private sector).

The federal government’s responsibilities are dependent on a strong federal workforce. Federal workers deserve to be compensated for their important work, but pay levels, pay increases and benefit packages need to be reformed to be in line with the private sector.

Salaries for federal workers continue to outpace pay for their private-sector counterparts. Average wages in the federal civilian workforce ($74,311 in 2010) far eclipse the $49,777 median wages in private industry. When generous benefit packages are included, the advantages enjoyed by government workers are even more pronounced. The roughly 2 million federal civilian workers received average compensation packages of $101,628 in 2010, far in excess of their private-sector counterparts. Immune from the effects of the recession, federal workers have received regular salary bumps and cost-of-living-adjustments, regardless of productivity or economic realities.

The reforms called for in this budget aim to slow the federal government’s unsustainable growth, and reflect the growing frustration of workers across the country at the different set of rules enjoyed by government employees. It reduces the public-sector bureaucracy, not through layoffs, but via a gradual, sensible attrition policy, permitting the federal government to hire only one new employee for every three federal workers who retire. By 2014, this reform would result in a 10 percent reduction in the federal workforce.

Additionally, it freezes federal pay through 2015. And it reduces taxpayers’ disproportionate share of the financing for the Federal Employee Pension Plan by requiring federal employees to pay for half of the defined benefit they receive at retirement, an increase from their current contribution of 0.8 percent of payroll. This proposal takes its cue directly from the Fiscal Commission. When combined, these proposals will save taxpayers approximately $375 billion over ten years.

The Associated Press contributed to this story.