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.



Brenda Brown   08/27/12 12:00 pm
What about the Congress' annual COLA
Why doesn't anyone talk about the Congress' annual pay increase that they get without having to vote for it. Is it frozen like the rest of the Federal employees or are they exempt from having to forego any increase in their salaries?

mushoku   08/27/12 11:55 am

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?

Sharon   08/27/12 11:06 am
What I would like to know is traditionall we get a cost of living pay increase each year of approximately 2.7% and in the past 2 years we got nothing and now they propose a 0.05 % increase. It seems this just to appear they are thinking of the employees. This will only increae my wager by 0.11$/hour and 4.40$/week. That doesnt even pay for a galon of gas. With the prices of everything going up and wages staying the same it feels as we are getting a decrease in pay.

Johnny   08/27/12 8:22 am
Pay Freeze
My greatest hope is that Americans will vote to remove the Congressmen who are stalling on a budget and elect a Congress that will start getting things done. Why are we paying these guys to do nothing?

Ed Jordan   08/27/12 6:53 am
I'm happy with what I've got. Better than average pay in my community. Steady employment. I dont understand why you are fussing about the icing on the cake. My dues are higher than a 0.05% pay increase. Put my dues to better use.

Shirley   08/24/12 9:03 pm
I think the American People should detemine if the Congress and Senate deserve a pay raise. They're not doing their job. They are all for the rich, because they are rich. In most folks eyes it's a conflict of interest and totally wrong for the congress and senate to vote themselves in a pay raise.

Michael Burns   08/24/12 4:27 pm
Vote Democrat
I'm sorry but I just cannot vote Democrat this time around. We have been slapped in the face too many time by our democrat president and legislators. He can make all the promises in the world, he may not be in the whitehouse come April and even if he is his pattern is lie, lie, lie. I'm not fond of Roney either. I may be throwing my vote away but I am voting for Gary Johnson. At least he says what he means and means what he says.

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