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Obama seeks cap on federal pay raises
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| Contributor | particleman |
| Last Edited | particleman Sep 01, 2009 08:43pm |
| Category | News |
| News Date | Sep 01, 2009 08:40pm |
| Description | WASHINGTON — President Obama urged Congress Monday to limit cost-of-living pay raises to 2% for 1.3 million federal employees in 2010, extending an income squeeze that has hit private workers and threatens Social Security recipients and even 401(k) investors.
Obama's proposal, outlined without fanfare in a letter to congressional leaders, would leave federal workers with their lowest COLA in two decades. Presidents Bill Clinton and George W. Bush proposed lesser increases three times. Congress, which must approve the plan, has not granted less than 2% since 1988.
The president's action comes when consumer prices have fallen 2.1% in the 12 months ending in July, because of a massive drop in energy prices. The recession has taken an even tougher toll on private-sector wages, which rose only 1.5% for the year ended in June — the lowest increase since the government started keeping track in 1980. Private-sector workers also have been subject to widespread layoffs and furloughs.
Obama's effort to reduce wage increases would save about $20 billion next year, the White House said. Under an automatic formula, workers are set to get a 2.4% increase, and those in some areas could get nearly 19% to keep pace with private-sector employees.
The move would put federal workers between two other groups: military forces and retirees. The military cost-of-living increase for 2010 is projected at 2.9%. Social Security recipients aren't likely to see any increase next year or in 2011 — the first time that's happened since 1975. |
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