On a conference call just now, White House Communications Director Dan Pfeiffer and U.S. Chief Performance Officer and the Office of Management and Budget’s Deputy Director for Management Jeffrey Zients defended the White House’s proposed pay freeze for federal employees from the charge that this will drive talented workers out of government as they see no prospects for individual advancement. Seeking a better return on their talent, the theory goes, they would move to the private sector, probably a government contractor, where their services can be “rented” from the government at a higher rate. If the government has the same amount of services to deliver and less skilled know-how at their disposal, they would need to draw upon that from somewhere. So under this scenario, government would end up paying more for the same pool of talent, despite freezing salaries.
Zients disputed the notion that this pay freeze will lead to a dissolution of talent. “On recruitment and retention, we believe that people come to government service for range of reasons…. We feel comfortable that we have a strong value proposition and can retain the best and brightest.” Given this, Zients didn’t feel that there would be an expanded reliance on government contracting as a result of this decision. They believe they can wring enough out of federal contracting to save $40 billion dollars, in fact.
But others aren’t so sure. Larry Mishel at the Economic Policy Institute notes that federal worker pay already lags the private sector by a tremendous amount – 22%, according to the federal pay agent’s report – and this freeze could represent a tipping point. And if anything, the federal workload is increasing, not decreasing, so somebody with the proper skills must do that work.
As for the politics, I don’t know how you can posit that this maneuver will strengthen Obama’s hand in any debate with Republicans over the deficit. It may strengthen his answer in a 2012 debate (“in fact, my Administration froze the salaries of federal employees,”) but the predictable reaction from Republicans has been a welcoming of the President to their idea and a demand for more. Indeed, given the White House’s tendency to self-compromise, all Republicans have to do is stay in place and they’ll eventually get rewarded even more. As Mishel says, “This is another example of the administration’s tendency to bargain with itself rather than Republicans, and in the process reinforces conservative myths, in this case the myth that federal workers are overpaid.”
But I think the Administration gives their intentions away right at the beginning of their white paper announcing this policy. “Because of the irresponsibility of the last decade,” says the lede. You see, to the Obama Administration and the economic team, the worst thing in the world is being seen as irresponsible.
A separate press briefing on this decision was held today, and a transcript was released.
UPDATE: Other progressives were similarly unimpressed.




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Bad policy.
Bad politics.
It’s starting to seem like Team Obama can’t do much right at all.
I’m surprised Zients didn’t say “well we spent the last 2 years making sure there were no jobs for them to go to.”
Does Obama think federal employees are registered to vote?
If he had wanted to show principled courage, he could have said that he intends to let all of the Bush tax cuts expire.
I don’t know how it can be better put than by Krugman:
There’s much more of this on the way. We need to drop this clown now.
I’m not going to defend the policy, but I think the point about not losing talent is valid.
Where exactly would all these federal empoyees go in this ecomony?
Why don’t we just lower everyone’s wages then?
Where are they going to go? Canada? Mexico?
That’s exactly what the PTB IS doing, or attempting to do.
Why do you think they like high unemployment?
Obama’s an idiot. That is all…
It’s a misguided but very cynical gesture. Sure: where else are you going to go, fed govt workers? Don’t like it? Go get a job… nyah nyah, too bad so sad, there aren’t any.
Hey this is just the beginning. More & more I hear those folks who have jobs talking about being “so lucky” to have employment. I “get” where they’re coming from, and an attitude of gratitude is generally good.
But make no mistake: Obama & his Overlords know they’ve got us all by the short & curlies… right where they want us with no room to manuever or complain.
I “dropped” the Big O a long time ago, but we all still have to deal with Obamaco, which is just Bushco on steroids in a worsening economic climate.
I am sure they know how their privitization scheme’s are planned – what did they say? Do they think it will work? Gosh I wonder who is creating the private companies right now so we can pay more!
Someone has to pay for crashing the economy. The way for the PTB to keep what they have and avoid paying their fair share is to allow unemployment to rise.
Simple question:
I suspect contracting rates will be frozen as well, and contracted amounts bargained down, and the amount of work going to contractors reduced.
I see this move as moving toward total austerity across everything that Obama has control over. Which means that Congressional staffs and committee staffs will not receive equivalent punishment.
We can’t just sit here for the next two years hoping this asshole doesn’t shit on us anymore. We need to signal our opposition to his re-nomination now. The question is not now who would challenge him; the question is how many might be willing to do so after two years of our opposition to him.
Aren’t these employees unionized?
If you are correct, then we have to spend the next two years in TOTAL opposition to ALL so-called bipartisan action by this clown. We just can’t stand pat. He is not going to change.
I wonder if they put that on a business card…
Principled courage?
How’s about all the Senators and House Reps forgo their salaries and perks for the coming year-starting with the Prez hisself?
This is cosmetic. Obama is playing to the yahoos. What will this do to decrease 9.6% unemployment? The Nov 2 election was a mandate against 9.6% unemployment. Has Obama forgotten already?
I would love to see it happening, but I sure won’t hold my breath.
I remarked in a prior post that one thing I admired Gov Schwartenegger for (one of the few things) is that he didn’t take a salary as Gov. I have to give Ahhhnold props for that.
But the greed-heads in Dee Cee??? Don’t see it happening. They’ll greedily grab anything they can.
It will depend on what type of contract.
Fixed price wont change at all
Cost Plus most likely will not change
Time and Materiels may change
What is most likely to change are the hourly rates (loaded) for some types of A&E contracts but even then, most of those type contracts have specific hourly rates for specific job categories and what usually happens is an office will have multiple contracts available from which to choose with different rates available from different contractors. And most every contractor of this nature has some type of “make good” job category/hourly rate.
Bottomline is, there are ways for the contractors to play the system.
Barry has jumped the shark with this. Even over at Kos, the opposition is palpable. He is showing us EXACTLY what we have in store for us. If we don’t act, we will be presiding over our own funeral.
Good point. Same sh*t happens here in CA: the State workers get screwed at every turn, but the politicians’ staffers get big fat pay raises and/or more staff are added at high salaries.
It’s really insidious, but the populace mostly doesn’t know about it. They’re all too ready to bitch and moan about the lazy, overpaid state workers, which mostly isn’t the case (eg, lazy & overpaid). Good distraction, though, per usual.
hmmm… well maybe that’s a good thing. I don’t like this, but if it wakes people UP, then I’ll “take it.” Whatever it takes…
It’s been a puke/bagger talking point for a while now that govt workers = evil lazy welfare queens.
So, completely unsurprising that Prez Puker-Than-Thou would pick up the meme and run with it.
Moreover, this is just a prelude to salary cuts and RIFs. You KNOW they’re gonna call him a nazi soshalist for proposing a mere pay freeze, and you KNOW he’ll agree.
He is a fucking idiot.
Exempting our war-making workforce from a pay freeze is just more evidence that our peace prize-winning president oxymoronically values the war economy more than he does the civilian economy.
You see how often he seems like a Republican.
I see how often he seems like a Republican.
IMO, most people see that.
So the fact that the rest of the Democrats in Washington don’t ever address this is telling, to me, about the party as a whole. At least in DC.
I wouldn’t feel near as bad about the party as a whole if there was major pushback to everything he does that is Republican. But not only is there no pushback, they rush to help him push through Republican policy. I.E. the health care bill. Entirely a Republican proposal, passed entirely with Democratic votes. Hmmmmm….
I have no idea how it works in the gummint, but I haven’t had a salary increase in 4 years now…
Well put. If this doesn’t occur soon, we as progressives are toast in 2012 — and beyond. Preservation of the social safety net is far more important than this asshole’s re-election or legacy.
Yep.
And an asshole.
I think we’ve all come to terms with his ousting in 2012. The general consensus here seems to be “primary his ass. Hard.”
I agree. Our social safety net is far more important that his re-election or legacy. I had to think long and hard before I voted on November 2nd, and it took a lot out of me to NOT vote Dem. I had to face my own fears of what would happen if Republicans took over. My thoughts eventually led me to the conclussion that they already have, and so I had nothing to lose.
Republican/Democrat doesn’t begin to describe these folks anymore. The (R) or (D) next to someone’s name is just a shortcut so the media-whores knows who to hate on (depending on what channel/paper/radio station they’re working for) and so the rubes know who to hate on when they still can’t get a job (depending on what state they live in).
They’re all vampires. Syphoning our lifeblood to the bigger vampires that paid for them to be elected. I really thought Obama was different. The man can give a helluva stump speech. I bought it hook, line and sinker.
I’m rambling now :) My point is, I agree with you. Ousting Obummer, even at the risk of Republicans controlling the House, Senate, and office of the POTUS, is priority one for me. Maybe we can finally send the morons a message.
You, me and who else? It feels like pissing into the wind a lot.
The government worker to contractor scenario is familiar. It’s what George “pre-Macaca” Allen did as governor of Virginia to the state department of transportation. He fired a bunch of state employees and hired some of them back at higher salaries plus middleman fees for contracting companies.
So where exactly is Obama getting his ideas from?
I agree – it is simple money saving – and overdue if the goal is maintaining rewards for gov work at the same, or slightly less given the extra security of the gov job, as the level in the private sector. TSA pay is 60% above private sector equivalent and the last study I saw said overall pay was 40% above private sector – the private sector drop in pay below the top management level, via outsourcing or just fire and replace, has not been reflected in gov pay. I have not reviewed that latest study in detail – but personal observation says while it may exaggerate a bit, it is noting the obvious. The fear of folks running to gov contractors making gov costs for functions higher – when contractors are not hiring – seems silly, unless the GOP plan to force – as they have in the past – the replacement of gov workers with more private contracts to provide those service via firms that are friends of the GOP (like Halliburton).
However, Brad DeLong’s reference to Nietzsche saying that those suffering pain would like others to suffer with them (especially those folks -government workers – who are viewed as part of the problem) is no doubt part of the political reward Obama is trying for with the freeze.
But the bottom line is that the freeze is justified on “fairness” grounds and austerity needs.
The folks issuing the contract know the games that are being played. And it is their salaries that are being frozen. Reckon they will try to look good by actually cutting costs?
Yep, fixed price won’t change at all except that based on prices some work might be canceled.
Cost plus will receive some pushback on the plus, unless it is legislatively defined.
Time and materials is where the biggest pushback will be because the numbers are more available for review. Hiding behind a “proprietary” curtain is less possible.
Hey, who knows, maybe a whole lot of those Bush administration plants, those third-rate Republicans hired in violation of the Hatch Act, will all quit, so that someday their position can be filled by someone not hired in violation of the Hatch Act.
It’s the members of Congress who should have their pay frozen. Hell, it should be reduced to the median family income of $49,777 just so they can get real. Or they should have to count the number of taxpayers required to pay their salaries plus fringe. Bet it’s over a hundred per Congresscritter.
The bulk of Congressional staffers are underpaid because it is seen as a stepping stone to other work. Which is why a goodly portion of them come from a class that can afford to subsidize junior.
Well, Obama has made his plans very obvious with this stupid move. There will be no progress on war, energy, climate, DADT, civil liberties, etc. There will be no progress on the economy. The only thing he offers is destruction of the social safety net.
Given that bleak outlook, what purpose does a blog like FDL have? Smarter folks than I need to figure that out. But our dance with this clown has to end.
The economy doesn’t need austerity; it needs jobs, good paying jobs that restore equality to the pay/fringe between government and private sectors. The pattern used to be that government workers got paid substantially less than private sector employment but received better benefits. But they were subject to politically inspired reductions-in-force, where private careers were less uncertain. But that was my parents’ generation. Ended in the 1970s.
The economy could also do with some labor organizing on the scale last seen in the 1930s, but Eugene Debs and Norman Thomas are no longer available to run on the left of the Democrats.
Can’t you feel the groundswell? The legion of pissed off former Democrats is growing by the minute. What happens with them is another matter, but FDL can and should have a role.
Yep, I think that is going to be a common reaction across a wide spectrum of progressive and Democratic blogs.
So the dark cloud does have a silver lining…
I work for the govt. Today I heard coworkers saying they wouldn’t mind the freeze if it went to somethng worthwhile, like extending unemployment benefits. We realize we’re about the only group that has job security and benefits and for most of us the 1.4% raise doesn’t make much difference, although our union is protesting it. Krugman is correct about it being an empty gesture. I’ve been waiting for the attack on us to begin–pitting private worker against public worker in a race to the bottom. Bush tried the same thing but Congress didn’t go along. This time I suspect they will.
The federal wage freeze announced by Obama today had almost nothing to do with economics. Rather, it is a story about values, character, and judgement.
Who comes out of this the more disingenuous: America’s failing newspapers or its failing president?
http://jotman.blogspot.com/2010/11/test-of-character-obamas-federal-pay_7567.html
Thanks for this.
Just like the attack on teachers is a race to the bottom. That will be this clown’s legacy:
The wage freeze won’t be applied evenly. some will see their salaries or bonuses increase as expected, especially those making the million dollar and similiarly high bonuses. The deflationary effects will work to increase unemployment as will the expiration of unemployment compensation. But hey, O won’t let the Bush tax cuts expire, so we can be thankful for that, right? WTF is he thinking and just before Christmas no less.
I think we have to take Soros’s advice to heart. If this guy can’t give us what we want we need to look elsewhere. Let him and the party go to hell. Give your work and cash to people who will try and help us and the hell with O and the party. Probably means the republicans get the WH, but it is not helping us.
FWIW
My daughter, a 37 year old top notch budget controller in the gov’t can pretty much go anywhere she wants — with a little inconvenience, and some personal choices — and will.
Obama needs to get a clue.
Fast.
Empty gesture? yeah, maybe but you just don’t do this fucking shit, now, at this time of year, with 10% unemployment and unemployment compensation running out and the Bush tax cuts about to be reinstated. WTF is he thinking?
When he is an old man, he will look back and wonder what the fuck went wrong and he likely STILL won’t have a clue.
The man is a snake in the grass. He just threw a whole lot of middle class workers under the bus without a thought. Get ready for a rough two years people bcz this clown is going to give away the ranch if we dont stop him. Lets hope Issa finds something to impeach for.
When a president makes these types of decisions, he knows, he is a one termer!
the internal polls at the white house must state Obama has no shot of winning in 2012.
this political mal-practice yet again by Obama
all Obama is doing here is telling progressives like us he does care about our ideas and families
and the feeling is mutual
real progressives and democrats dump Obama a long time ago!
I meant an empty gesture as far as affecting the deficit.
It’s Prez O’s and the DLC’s standard, “they have nowhere else to go” attitude, which you’d think he’d have re-thunk after the base stayed home earlier this month! If you were a mole sent to scuttle the Democrat Party, what would you do different than Prez. O?!
I don’t guess there’s any chance Obama will head to the private sector, is there?
I think the title of your posting has some typos. It should be
Obama: Federal Employees Facing Pay Cut Won’t Exercise Rational Economic Judgement and Become Overpaid Contractors
Awesome Mary. I needed a good chuckle, and doggone it this did it.
LOL, I do believe he will go to the private sector sooner than he thought in 2008.
The sad news is then he’ll get as rich as he’s helping his rich friends get now.
Asshole.
I work for he State of Colorado. We’ve effectively had a wage and hiring freeze for 10 years. Ever since we went to “pay for performance”. “Pay for Performance” means “No raises for anyone”. Even top performers have gone without raises for years on end. In addition, we have had 8 furlough days last year, and a 2.5% pay cut this year. Our retirement plan is being torn apart. Our benefits are crap. We’re still working for the state. Because when we hear that there are 5 applicants for each job, we just don’t think we should leave. And most of us are older. Not easy for a 50 year old to leave a relatively secure job, when no one is hiring us old folks. Even with a Masters Degree in Engineering.
The difference is that Colorado has a Constitutional requirement to balance the budget. The Federal Government does not. Also, Ritter demanded higher taxes on corporations. He closed tax loopholes for corporations. Got rid of sibsidies. That’s why he didn’t run for re-election. He knew he was pissing off the Republicans, but he did it anyway. He increased fees, and closed several state parks. Not easy to do in a state that depends on tourism. I really believe he is trying to be fair. I do not believe Obama is doing the same. I expect Congress to insist that their budgets are not subject to the freeze. I expect no decrease in contracts. I do not expect Obama to demand higher taxes or shutting loopholes. He doesn’t give one shit about balancing the budget, he is wholly owned be the corporate interests and he is just sending those wages up the chain. We all know it. That is why this is so upsetting. I don’t mind sharing the pain. But I object to exemptions for those who can best afford it.
People should not get upset about Obama, he is not worth it.
Obama has to look in the mirror everyday, and he knows, he will be hated by 90% of the people of the USA. (like Bush, being the president of the rich and the super rich does not make one great)
I feel sorry for Obama kids, their father will be look at as a huge failure and liar!
the wise say it best; what goes around always comes around!
Obama has been intentionally wrecking the democratic party for months!
real progressives and democrats jump off the Obama bandwagon a long, long, time ago
Odd – it kind of looks like his electoral strategy for winning the votes of liberal Democrats…
It took Bush and Cheney six to eight years to nearly destroy the Republican Party. It took Obama only two years to nearly destroy the Republican Party.
Please primary him in 2012!!! Please! Please! Please!
Whether or not O is a one termer depends on just 2 things: the economy and who the R’s select as their candidate. If the economy perks up a bit he will say we are turning the corner toward prosperity and some people will buy it.
Aaannnd if the R’s select Palin a LOT of people will be terrified to have THAT woman with her Christian soldier finger on the button. Hence Obama gets re elected.
Folks need to remember that the FDL world is not the real world. Even now most people I talk to in the coffee houses and over FB and e-mail don’t know anything about Obama’s wicked transgressions. They tend to think he’s “trying his hardest but the R’s are just stopping him from getting anything done blah, blah, blah . . .”
A year is a lifetime in politics and 2 years is twice that so really, anything can happen.
One could call it the Blackwater strategy.
The day the
music diedshit hit the fannew orders went into effect.Or a couple of days later, more likely.
I am a fed. Employee in the federal healthcare industry and yes any of us can go to the private sector and expect to get a pay increase…I moved from the private sector 6months ago with the hope of a higher pay increase with advancement…but now..humm…I am marketed by the private sector all the time…anyone with healthcare skills or metal health skills can be lured away…good therapists, nurses and even doctors….that’s the risk….that’s a fact…hospitals on the private sector r competitive….for good workers…what an opportunity for them….
I’ve known sice 2007 that Obama was a fairy tale. I didn’t vote for him. I’ve voted in every election since 1976 and voted Democrat every time until 2008. I resent having my party taken over by a bunch of so-called “progressives” who think they are better than us blue collar workers(Yes, I have a Masters and still consider myself blue collar), true blue Democrats. I’ve been a liberal all my life, and I resent having the word dirtied by people who are in their hearts more conservative than Reagan.
Kos was a Republiocan, Cole was a Republican, Huffington ran for Governor as a Republican, Marshall was a Republican, Sullivan is a Conservative. I mean no wonder a closet COnservative got elected as a Democratic President. No one can tell the difference anymore.
so true what you have stated
the democratic party, just like the republican party are both PR firms for corporation now.
madison ave. has created an illusion of two parties with two different agendas when reality says the USA has one political party with one agenda.
the MSM has went off the deep end, people should stop calling themselves journalist, the last true journalist the USA may have been Dan Rather. Out of respect for Walter Cronkite, the CBS, NBC, ABC, news cast should just say were are more TMZ, and no longer what to be call news cast.
to save the USA, progressives are going to have to develop a grass root network that has gate keepers to keep the phony and fake progressives out. This project is already underway. (Obama knew a black republican could never get elected, so he jump over to the Democratic Party)
Federal workers not affected by the freeze, Congress, Postal Workers, Military Personnel, and Retired Federal Workers ( who did note a cost of living increase in 2010). I still think all those fat cats should participate……in the FREEZE.! I’m still a federal worker…and their are thousands of support jobs that make meager pennies to the private sector…..they do it to have the retirement healthcare……they aren’t getting rich!!!!!! Believe me….but I suppose its a sign of the times…..
When I say fat cats I mean the upper class, the people who accepted bail out money, the people with thousands of dollar salaries…not the group I listed as not affected…sorry for the confusion