White House Calls for Discretionary Spending Freeze; Impact on Federal Workers Unclear


In last night’s State of the Union address, President Obama proposed a three-year discretionary spending freeze on federal funding that is not related to national security. The freeze is proposed to take effect in Fiscal Year 2011.

A number of agencies and social programs are not impacted by the proposal. The Departments of Defense, Homeland Security, and Veterans Affairs are left out of the plan, as well as Social Security, Medicare, Medicaid, and certain international programs.

For agencies not exempted from the budget freeze, it is too soon to tell what the impact for each will be. The White House has indicated that some agencies and programs will see budget increases, while others will see decreases, but the net impact for all the impacted agencies as a whole will be a Fiscal Year 2011 budget equal to that of Fiscal Year 2010.

It also remains unclear what the White House will propose for the FY11 annual pay adjustment. We will know more when the President passes his FY11 budget proposal to Congress on Monday. The White House has announced that salaries of senior White House officials and other top political appointees will be frozen in FY11, but the Administration has been made no mention of what will be offered for military and civilian federal employees.

As we move through the FY11 budget process, NFFE will continue to push for pay parity between military and civilian federal employees, and annual pay adjustments that are consistent with current law. Furthermore, NFFE will strongly defend against cuts to the numerous federal agencies that provide invaluable services to the American people.