Federal Pay Freeze Extension: What it Means for Your Wallet
Thursday, August 23, 2012(National Federation of Federal Employees)
As many of you
have
likely heard by now, earlier this week the
White House issued a letter to Congress calling for a
three-month extension of the federal pay freeze.
Here’s what you need to know about the
extension and how it impacts
you.
The
federal pay freeze, beginning in January 1,
2011, was scheduled to end on January 1, 2013,
lasting two full years. The new extension will
extend the pay freeze through March of 2013,
making the earliest date for an increase April
1, 2013. At that point, according to the
President’s memo, federal employees will
receive a 0.5% pay increase as he called for in
his FY 2013 budget proposal. But this still
leaves several
questions.
What
Does an Extended Freeze Cost
Me?
The
two-year federal pay freeze will cost federal
employees a total of $60 billion over the next
decade – yes, that’s billion with a
“b.” That shakes out to roughly $30,000 in
forgone income for every employee of the
federal government, on average. If this was not
bad enough, a three month extension would grow
that figure, costing you even more in missed
income.
Why
Delay the Pay Adjustment to April 1st?
In our opinion, three
more months of frozen pay are three months too
long, and pay should increase as scheduled on
January 1, 2013. But it is
lawmakers who make these decisions. Since
Congress has failed repeatedly to pass a
budget, the government has been running on what
are called continuing resolutions (CR), which
basically maintain funding at current levels.
In other words, CR’s maintain the status quo
as far as government funding is concerned. The
current CR that is funding government is
scheduled to expire on September 30th of
this year.
Congress
and the White House have agreed to pass a new six-month
CR, funding the government through
March of next year. This is where the April 1st
date for a federal pay adjustment comes
from.
Am I
Guaranteed a 0.5% Raise on April 1st?
The short answer is no. The only thing this memo guarantees is that the President intends to increase federal pay by 0.5% on April 1st. Unfortunately, there is no guarantee this will happen despite the President’s letter saying he intends to do it. Congress may decide to allow the President to make the pay adjustment on April 1st as he declares in the letter, or Congress could specify that the pay freeze should continue in another CR or other piece of legislation. Right now, it is impossible to say for sure what will happen.
Comments
I know it's reasonable for a person in their prime to double their income approximately every 10 years, but the rest of us have to earn it. Congress gets to choose when to give themselves a pay raise based on their (apparent) belief that their will should be done "on earth as it is in heaven."
I know it doesn't count for a significant portion of expenditure, but why does Congress not only refrain from being penalized but also still earn raises when they don't perform basic functions of their job like creating and passing a balanced budget?