Trump Orders Pay-Freeze For Federal Workers

Government Worker wages rose just over 2% in the last year (while private sector workers saw wages rise over 5%), but President Trump has "determined that for 2019, both across-the-board pay increases and locality pay increases will be set at zero," for non-military federal employees.

Trump made the announcement in a letter released by the White House on Thursday to House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell, citing the need to “maintain efforts to put our Nation on a sustainable fiscal course.”

Well, that will hold inflation down? Weaken the dollar?

However, as Bloomberg notes, Congress can still raise federal workers’ pay in spending legislation. The Senate has already approved a 1.9% pay increase for next year but the House would still need to approve it. The House version of the legislation doesn’t include a raise. The two bills must now be reconciled.

The president’s move could have ripple effects in the Nov. 6 congressional elections for members of his party in competitive House districts with large numbers of federal employees. Just south of Washington, those areas include Representative Barbara Comstock in northern Virginia and Representative Scott Taylor in Virginia Beach.

Had Trump not acted by Friday, federal workers would have received an automatic across-the-board pay increase of 2.1 percent and locality pay increases averaging 25.7 percent under the 1990 Federal Employees Pay Comparability Act, according to the letter.

That said, no president including Democrats Bill Clinton and Barack Obama have let the full locality pay increases take effect under the law. Last year, Trump lowered an automatic 1.9 percent across-the-board increase under the law to 1.4 percent and an automatic 26.2 percent average increase in locality pay to a 0.5 percent average increase.

President Trump explains in a letter to Congress - using "emergency" policies, put in place in case of "serious economic conditions affecting the general welfare.":

Dear Mr. Speaker:

I am transmitting an alternative plan for pay adjustments for civilian Federal employees covered by the General Schedule and certain other pay systems in January 2019.

Title 5, United States Code, authorizes me to implement alternative plans for pay adjustments for civilian Federal employees covered by the General Schedule and certain other pay systems if, because of “national emergency or serious economic conditions affecting the general welfare,” I view the increases that would otherwise take effect as inappropriate.

Under current law, locality pay increases averaging 25.70 percent, costing $25 billion, would go into effect in January 2019, in addition to a 2.1 percent across-the-board increase for the base General Schedule.

We must maintain efforts to put our Nation on a fiscally sustainable course, and Federal agency budgets cannot sustain such increases. Accordingly, I have determined that it is appropriate to exercise my authority to set alternative across-the-board and locality pay adjustments for 2019 pursuant to 5 U.S.C. 5303(b) and 5304a.

Specifically, I have determined that for 2019, both across-the-board pay increases and locality pay increases will be set at zero. These alternative pay plan decisions will not materially affect our ability to attract and retain a well-qualified Federal workforce.

As noted in my Budget for Fiscal Year 2019, the cost of employing the Federal workforce is significant. In light of our Nation's fiscal situation, Federal employee pay must be performance-based, and aligned strategically toward recruiting, retaining, and rewarding high-performing Federal employees and those with critical skill sets. Across-the-board pay increases and locality pay increases, in particular, have long-term fixed costs, yet fail to address existing pay disparities or target mission critical recruitment and retention goals.

The adjustments described above shall take effect on the first day of the first applicable pay period beginning on or after January 1, 2019.

Sincerely,
DONALD J. TRUMP

All of which seems less than reflective of what is supposedly a sustainable 4.2% growth economy?

J. David Cox, national president of the American Federation of Government Employees, the largest union representing federal workers, blasted Trump’s pay freeze and urged the House to pass the 1.9 percent pay increase approved by the Senate.

“President Trump’s plan to freeze wages for these patriotic workers next year ignores the fact that they are worse off today financially than they were at the start of the decade,” Cox said in a statement. “Federal employees have had their pay and benefits cut by over $200 billion since 2011, and they are earning nearly 5 percent less today than they did at the start of the decade.”

Democrat Gerry Connolly, who represents thousands of federal workers in his northern Virginia district, also criticized Trump’s decision.

“His tax bill exploded the deficit, and now he is trying to balance the budget on the backs of federal workers,” Connolly said in a statement. “I will not accept President Trump’s mismanagement of the federal government as fait accompli.”

https://www.zerohedge.com/news/2018-08-30/trump-orders-pay-freeze-all-non-military-federal-employees-2019