Praying For A Pay Freeze?

Things are pretty bad on the federal job front.

How bad, you ask?

Well, you know things are tough when your last/best hope is that the boss will extend your pay freeze for another year. Better yet for two years.

That’s the situation federal workers find themselves in as Congress and the White House look for ways to trim the deficit and spending for the good of the nation while also looking for ways to make sure the other side looks really bad.


President Barack Obama, as promised, outlined a program that will produce roughly $3 trillion in savings over the next 10 years. It includes higher taxes for upper income people and a new millionaire’s tax. In the mysterious Washington world of budget-scoring, nearly 50 percent of the savings would occur if Congress lets the Bush-era tax cuts for high-income people expire next year.

Federal and postal workers and retirees have mostly escaped budget-cutting efforts — so far. But insiders predict that is about to change.

Congress ignored most of the recommendations of the presidentially-appointed Bowles-Simpson commission. It proposed various cuts in federal employee benefits including a three-year pay freeze. President Obama ordered a two-year freeze instead. Other groups tacking the deficit — including a bipartisan, bicameral congressional panel and a House GOP group — made recommendations but nothing, so far, has happened.

This time, the experts say, something will happen.

They predict the 12-member House-Senate group will come up with a variety of proposals aimed at the federal workforce and federal retirees. Here’s the partial list of savings the White House and/or Congress may propose. Note that the savings to the government would be a cost to you

It includes (but may not be limited to) reducing future COLAs for retirees (and people under Social Security), a voucher system for health premiums, a less generous pension-calculator formula and increased retirement contributions by current federal workers. One would reduce future inflation-catchups for retirees, two others would permanently reduce your take home pay once they took effect. Which is where the pay freeze might look like a good thing.

Experts — from the media and the federal-postal lobbying community — say that whatever is proposed (assuming Congress OKs it) would not be effective as long as pay as frozen. For workers who want to retire before contributions go up or benefits go down the best case scenario would be for the pay freeze to continue another year or two.

For a look at some of the possible proposals, what they would mean to you and what they would cost you, click here.


By Jack Moore

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