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Fact Sheet: Cutting the Deficit by Freezing Federal Employee Pay

Office of the Press Secretary | The White House

November 29, 2010

Because of the irresponsibility of the past decade, the President inherited a $1.3 trillion projected deficit upon taking office and an economic crisis that threatened to put the nation into a second Great Depression. He moved quickly to get the economy moving again. Now, the economy is growing, and we have gained private sector jobs for the past 10 months. But families and businesses are still hurting, and our top priority is making sure that we are doing everything we can to help boost economic growth and spur job creation.

Now, we need to turn our attention to addressing the massive deficits we inherited and the unsustainable fiscal course that we are on. Doing so will take some very tough choices. Just as families and businesses around the nation have tightened their belts so must their government. That must be done in a targeted way that focuses our investments in what works and in what will lay the foundation for job creation and economic growth for years to come while cutting back elsewhere in our budget.

That is why the President has decided to propose a freeze in civilian pay for federal employees for two years, 2011 and 2012.

  • This two-year pay freeze will save $2 billion for the remainder of FY 2011, $28 billion over the next five years, and more than $60 billion over the next 10 years.
  • It will apply to all civilian federal employees, including those in various alternative pay plans and those working at the Department of Defense – but not military personnel.

This was a decision that was not made lightly. From the doctors and nurses who care for our veterans to the scientists searching for better treatments and cures, the men and women who care for our national parks, and the thousands who make sure that the Social Security check is in the mail and that students get their scholarships, federal workers serve their fellow Americans. They do so often with great sacrifice and motivated by a patriotic love for their country. This freeze is not to punish federal workers or to disrespect the work that they do. It is the first of many actions we will take in the upcoming budget to put our nation on sound fiscal footing – which will ask for some sacrifice from us all.

This move also is another step in what the Administration has done as part of its Accountable Government Initiative to cut costs, save taxpayer dollars and do more with less in the federal government:

  • Upon taking office, the President froze salaries for all senior White House officials; in last year’s budget, he proposed to extend this freeze to other top political appointees; and he eliminated bonuses for all political appointees.
  • The President directed agencies to dispose of excess real estate to save $8 billion over the next two years.
  • The President set an aggressive goal of reducing improper payments by $50 billion by the end of 2012.
  • In each of his budgets, the President put forward approximately $20 billion in terminations and reductions, encompassing more than 120 programs all of which have strong supporters.
  • The President put forward more than $1 trillion in deficit reduction in his 2011 budget, including a three-year freeze in non-security spending – which will bring non-security discretionary spending to its lowest level as a share of the economy in 50 years.

Ultimately, reining in our deficits will take tough decisions and sacrifices made by us all. We look forward to working with both sides on Capitol Hill over the next several months to forge a commonsense deficit reduction strategy that will rein in our deficits, keep our economy growing, and lay the foundation for American competitiveness for years to come.

See the original at the White House website.


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  • Photo_user_blank_big

    Sean_D1

    over 3 years ago

    6 comments

    there is more involved than just making cuts from any agency or department. Just cutting funding doesn't correct systemic problems that need to be addressed in any given agency facing a budgetary axe, what has to happen is a good hard look at all processes in government to see which are needed and of those how can the process be fine tuned to get the job done correctly and in a timely fashion while cutting down on wasteful spending. Obama in the State of the Union did point out some duplicated processes where two or more agencies did the same job or different aspect of the same job with out it being warrented.

  • Photo_user_blank_big

    mtyler11

    over 3 years ago

    2 comments

    I don't see any in Congress taking a pay cut or freeze... every year they vote themselves a 5-10% raise, yet we bear the burden. And so does this mean that when the country turns around and private sector pay jumps big that we will get a matching or even commensurate pay raise? No. We will get a hand-shake and a boot up the arse for the thank-you. The military has a saying... lead from the front or lead by example... so let Congress lead from the front and take a paycut, reduce their staffing, and reduce their budget first. Then when THEY show true leadership I will happily sacrifice for the good of the whole.

  • Photo_user_blank_big

    lovestheh2o

    over 3 years ago

    2 comments

    My health insurance went up $40 monthly, the MD co-pay and my prescriptions went up as well. I am a single mom, 2 minor children, I gross $29800 annually. DE Child Support Enforcement gave my ex- their blessing to be unemployed while he went back to college to obtain his second batchelors degree. Gas prices are continuing to go up, food packaging is decreasing in size while the price we pay is increasing. Why isn't the federal government looking at what they are doing to those of us at the GS-3 and GS-4 pay scales?

  • Ed_max50

    meadore

    over 3 years ago

    4 comments

    Sorry, but this President may have "inherited" a deficit, but he also increased it. He doesn't get a pass. And the congress (democrat ran for the last two years of the Bush Admin) spent like drunken sailors (no offense intended to drunken sailors).
    The unions (of which I am not a member and would never be) needs to sit at the table and ask what they can do to help tighten the belts, not just demand more and offer less. Unions are corrupt agencies that have no real purpose in this day and age.

  • Photo_user_blank_big

    srivers728

    over 3 years ago

    2 comments

    I agree, sacrifice today for tomorrow. And with the comment regarding Congress-have them on the pay freeze working for their dollars as well. Performance pay would have a serious effect on them as well.

  • Photo_user_blank_big

    aleamons

    over 3 years ago

    2 comments

    BS still Smells like BS. WE didn't ask for this crisis with the budget, the idiots that are in the house and senate took it on themselves to spend us into hell. It seems the general thinking is to spend what we have and what we will have 30 or 40 years in the future... for near term satisfaction today. This has happend each time we come out of a conflict of any size, first hurt the GI and the Fed Worker to correct the mistakes of our representatives. Go to a flat 5% tax on everyone 18 years and older, across the board. No rich hidehouts who don't contribute.

  • Photo_user_blank_big

    beg1964

    over 3 years ago

    2 comments

    SBaumgartner - I had the same thought. I do not see how this would affect normal career progression but can see where it could affect the annual pay raise percentage.

  • Photo_user_blank_big

    ntdhb11

    over 3 years ago

    4 comments

    I havent heard anyone speak about the mandatory furlough the NTEU was in combat with congress about. This was part of the map for reducing the budget problem. Before the freeze NTEU was fighting to oppose the mandatory two week furlough for IRS employees. Does anyone have updates about that now that the freeze have been put in place.

  • Photo_user_blank_big

    Troy

    over 3 years ago

    2 comments

    I'll be the first to admit, I'm not an Obama supporter! But, I'll have to admit this decision shows a thought process beginning in the right direction. Though I don't totally agree with it coming at the expense of care givers to our veterans and research scientists. I think the real cuts need to be made to pork barrel projects. And also not only a pay freeze; but a pay reduction for both Senate and Congress. Let them devise a plan (voted on by the legal citizens) that will allow them a pay raise only when a noticeable reduction to the deficit is realized. Then base future pay raises off of the percentage of decrease to the deficit. This would have a two fold affect; this would get rid of the politicians that are in office just for the money and allow true patriots of this Great Nation to become the needed politicians of high office to make the right decisions for the right reasons.

  • Me_max50

    gmintz

    over 3 years ago

    2 comments

    President Obama is someone who would risk being the "Bad Guy" in order to push our country in a positive direction including chipping away at our deficit and restorign our country's financial base. I believe I understand what sacrifices his plan entails and agree with his decision. From what I've read it is a plan that will work if it is worked. We talk about reducing the deficit, but the monetary odometer continues to increment like miles on an open road. Why is that? For me the answer is clear, and although this may sound over-the-top, we must sacrifice now for our children's prosperous future or sacrifice their future.

  • Photo_user_blank_big

    SBaumgartner

    over 3 years ago

    2 comments

    Question Will this also freeze step promotions.

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