Obama Calls For Two-Year Federal Pay Freeze

Obama Calls For Two-Year Federal Pay Freeze

Obama Calls For Two-Year Federal Pay Freeze

On Tuesday, President Barak Obama proposed a pay freeze that would affect nearly 2 million federal workers this year and next.  The President said the two-year freeze is one step the government has to take in order to regain control over the expanding budget deficit.

The President’s proposal would need approval from Congress before it could be enacted.  The White House has said the proposal would save the country more than $5 billion over the next two fiscal years.  Over that period the deficit is expected to be somewhere around $2.3 trillion.

The announcement came two days before a panel Obama created to help recommend deficit-cutting measures was scheduled to release their findings and recommendations.  In the past, the panel has recommended a ten percent reduction in the government workforce as well as a three-year freeze on raises.

The chasm between Republicans and Democrats has led to bitter fights between the two parties on a number of legislative items, but a federal pay freeze is something both sides seem willing to get behind.  Republican John Boehner of Ohio, expected to become the House Speaker in January, is on board with the pay freeze.  However, he would like the President to take the proposal a step further, and include a hiring freeze.  Boehner pointed out that hundreds of thousands of new federal employees have been hired over the past two years, even as millions of private sector jobs have been lost.  Boehner said that without a hiring freeze, a pay freeze would only keep the status quo and do little to reduce the deficit.

The proposed pay freeze is expected to save nearly $2 billion for the remainder of fiscal year 2011, which ends September 30, 2011 and would save nearly $60 billion in total costs over the next decade.


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