According to Obama...
America's Debt Crisis
Obama calls for federal wage freeze
By Charles Riley, staff reporterNovember 29, 2010: 11:49 AM ET
NEW YORK (CNNMoney.com) -- President Obama on Monday will call for a two-year freeze in the wages of federal employees.
The freeze, which would save $60 billion over 10 years, would make a small dent in the nation's debt problem. The ac ulated deficits are currently forecast to exceed $9 trillion over the next decade.
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Still, it's an important step to help generate taxpayer support at a time when policymakers will need to make numerous difficult decisions about curbing the debt, one fiscal expert said.
"It's a real money issue and a psychological first step," said Maya MacGuineas, fiscal policy director at the New America Foundation. (Obama's debt panel nears final report)
Obama was scheduled to announce the proposal later Monday.
According to the administration, the two-year pay freeze would save $2 billion for the remainder of fiscal year 2011 and $28 billion over the next five years.
The freeze would not apply to military personnel, but would apply to all civilian federal employees, including those in various alternative pay plans and those working at the Department of Defense.
Federal workers shouldn't feel singled out: The White House says more tough choices are on the way.
"This freeze is not to punish federal workers or to disrespect the work that they do," the White House said in a statement. "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."
According to a recent CNN/Opinion Research Corp. poll, 68% of Americans say reducing the deficit is more important than avoiding cuts in salary and benefits for federal workers.
In the same poll, Americans said that avoiding significant spending cuts to Social Security, Medicare, Medicaid, college loans, aid to farmers and unemployed workers is more important than reducing the deficit.
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Congressional approval will be required to before the freeze is implemented, and Obama's proposal is likely to pick up support on the other side of the aisle.
Republicans have argued in favor of a freeze in recent weeks, and the co-chairmen of Obama's bipartisan deficit commission made a similar recommendation earlier this month.
Monday's announcement is not the first time government employees have faced cuts during the Obama administration. During his first year in office, he froze the salaries of top White House officials and proposed to do so for other top political appointees. He also eliminated bonuses for all political appointees.
-- CNNMoney senior writer Jeanne Sahadi contributed to this report.
It's a small, inconsequential step relative to the budget. Hopefully, there is more low hanging fruit out there to be quickly harvested.
IMO, it's more important as a statement than anything else....and coming from a company with a 3 year (and counting) long wage freeze, I feel their pain. However wage freeze > layoff.
What's the point of tackling the debt problem if we still have 2 money eating wars going on?
I'd rather see a 5% across the board budget cut.
A 20% cut in pay for all Senators & Congressmen would be fair…Let these millionaires experience what middle America is going through….
Does that inlcude military spending, social security or medicare? Because it doesn't to Republicans actually in congress.
it all, roll back the tax rates, all of them, to 1980 before St Ronnie started the Wealthy War On America.
For me it does. Tell the cabinet heads to earn their money and find 5% of cuts they can make without interrupting the basic mission. It happens in the private sector all the time.
You know that every general is going to say how they're strapped for cash and need every cent to accomplish the mission. Heck, the Air Force is flying with machines that get patched up weekly. Big political battle there.
The military could find 5% too without sacrificing combat readiness.
Probably, but good luck getting generals to admit that.
Well, of course it isn't much, but it has to be done. Everything single little thing, regardless of how much or how little it helps, has to be done at this point.
Wow... Just wow...
Wage and price controls were proven not to work back in the 70's, and since these are based on CPI normally anyway, they aren't really going up now as it is.
Is he planning to devalue the dollar so much as to not want to pay 10x more or something in federal wages?
Have to wonder when you know the facts.
Anyone care to look at CPI changes over the last 2 years? I don't have the time.
CPI is bull anyway. It excludes food, energy, and commodities. Just because the price of Indonesian underwear and Chinese conputers hasn't gone up it doesn't mean we haven't had inflation recently.
We know that, but union contracts still use it, as does medicare, and even private employers.
The VRWC wrecking hammer is coming down.
Repugs are saying absolutely impossible let the tax cuts for the superwealthy expire, but
1. Soc Sec to be reduced.
2. medicare payments to be reduced (won't happen, the docs will abandon Medicare patients)
3. medicaid rolls to be reduced
3. long-term unemployment benefits to expire.
4. cut govt employee salaries.
5. etc, etc, etc.
I expect the Repugs will, sooner or later, propose a salary/allowance increase for Congress. God knows Congress Works Hard For Their Money.
eg:
GOP Sen. Mark Kirk: Extending jobless benefits ‘misguided,’ but tax cuts for the rich necessary
http://www.rawstory.com/rs/2010/11/g...fits-tax-cuts/
Lemming alert...
Link?
That's in the democrats agenda, in the health care legislation they passed. not anything republicans did.
Again, see health care plan.
So? It's a time controlled insurance. Not a right.
Really? Whay is it the current administration talking about it then?
Do you mean repugs, repugs, repugs...
Just when I thing you are at the bottom, you sink lower in intelligence.
the gov waste one third of their money easily each year
I think it's better that we make massive cuts to our military spending. At least 50 percent should be cut.
These aren't "wage and price controls". Minimum Wage is an example of a price control. This is an employer lower costs to try to, at a minimum, balance their budget (something all successful businesses know how to do but a concept that evades the government).
Here's all the CPI info. Do your own research. http://bls.gov/news.release/cpi.toc.htm
Wrong. CPI includes all those things. You are thinking of Core CPI, which isn't used in contracts.
Core CPI is useful in looking at short-term trends because of the volitility in food and energy. But any statistician or economist knows you have to use CPI that includes food and energy, since food and energy are two of the most necessary expenditures people have.
I agree, but apparently the US Government doesn't. Check it out. Thats why they didn't re-adjust Social Security this year...they excluded food/energy etc. in the calculation.
50%? Maybe VERY gradually, but you can't just cut 50% outright. It would pretty much mean suicide for soldiers in the field.
That's also incorrect. They didn't re-adjust Social Security payments this year because the CPI-W didn't change. The CPI-W is the legislatively mandated index by which SS payments are adjusted.
http://www.ssa.gov/cola/2010/2010faqs.htm
CPI-W includes food and energy.
http://bls.gov/news.release/cpi.t04.htm
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