Federal pay freeze may save $6 billion

WASHINGTON – President Barack Obama on Monday proposed a two-year freeze on federal workers’ pay, an unexpected announcement that represented the first in a series of White House moves to seize the initiative from Republicans on the economy.

The move preceded Obama’s meeting today with congressional leaders on the subject of expiring Bush-era tax cuts, and came just days before a final report from Obama’s fiscal commission on how to shrink the federal deficit.

“The hard truth is that getting this deficit under control is going to require broad sacrifice,” Obama said from the White House. “And that sacrifice must be shared by the employees of the federal government.”

By proposing the freeze, Obama sought to stake his own claim to the argument that government must make tough decisions, echoing a persistent theme of his GOP critics.

The move would save about $6 billion over two years, the White House said – a substantial sum, though a mere sliver of the $1.3 trillion federal deficit. The proposal would need congressional approval to take effect.

The freeze, which would not apply to military personnel or postal workers, would affect about 2 million employees.

Excluding military and postal workers, there are about 250,000 federal employees in the Washington area, according to U.S. Office of Personnel Management figures. The highest concentration outside Washington is in California, with 150,000 employees.

Republicans, who had been preparing their own plan to slash federal pay and the government work force next year, said the proposal was long overdue. Some of the president’s allies, meanwhile, chided Obama for taking a symbolic step that they said does little to affect the trajectory of federal spending, but will harm household budgets.

But advisers to the president say he wasn’t bartering with Republicans by offering the pay freeze. A senior administration official said Obama’s proposal is part of a larger plan to put Republicans on the defensive in an overdue conversation about deficits.

As they negotiate next year’s budget in the weeks to come, the administration will focus on the cost of government – in particular, the cost of extending the Bush tax cuts.

Congress reconvenes this week for a lame-duck session to confront a series of crucial deadlines. The Bush-era tax cuts lapse at the end of the year, and unemployment benefits will be cut off starting Wednesday, leaving as many as 2 million jobless Americans without aid through the holidays.