Why Does Barack Obama Want to Cut the Salaries of Federal Employees?by Ben Adler
November 29, 2010
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President Obama is often blamed for not reaching out to Republicans. In truth, as Monday morning's announcement that Obama wants to cut the pay of all federal employees illustrates, he has the opposite problem. Obama frequently proposes essentially Republican policies, which makes it impossible for him to use those ideas to buy Republican votes for bipartisan legislation.When legislation to limit greenhouse gas emissions was being negotiated in the Senate Obama undermined the bargaining process by simply unilaterally opening up new areas for offshore oil drilling. Increased drilling was supposed to be one of the things Democrats gave to Republicans in a comprehensive energy reform bill as an inducement to vote for it. Republicans hardly applauded Obama for the move, and the average swing voter seems not to have given the Democrats any credit for it in the recent election. In fact, the BP oil spill turned the drilling decision into a potential liability for Democrats.
This was be a textbook lose-lose, and so is the federal employee pay cut. Just a few months ago Republicans were proposing the same thing, and Democrats, including even moderate deficit hawks like Sen. Max Baucus (D-MT), were criticizing it. Democrats opposed to the idea of a two year pay freeze for federal employees, which is really a pay cut if there is any inflation, because it would be counter-productive to the economic recovery. If there is one thing that any economist from across the political spectrum will tell you it is that the government should currently be pumping money into the economy, rather than removing it. You can do that through a mix of immediate tax breaks for working families and infusions of investment in economically productive programs such as education and transportation infrastructure, as Democrats tend to favor, or you can do it less effectively through tax breaks for the wealthy as Republicans advocate. But the one thing you ought not to do is take money out of the economy. But that is precisely what this proposal would do, in the name of deficit reduction. How much deficit reduction? Not much, just an estimated $60 billion over 10 years, which is less than one-tenth of what the government will save if it allows the Bush tax cuts for the wealthiest two percent of Americans to expire.
The other reason many liberals are opposed to cutting pay for federal employees is that the argument for such a cut is based on the suspect premise that federal civil servants are highly paid. Many federal employees do indeed make more than the average American, but that's because of the type of work they do and their qualifications. Cabinet departments and law enforcement agencies are filled with lawyers, holders of advanced degrees, and other experts. Compared to the economy as a whole there are relatively few high school drop outs doing low-paid menial work for the federal government. So, in fact, it turns out that federal employees actually make less than private sector employees with comparable jobs. A report by the U.S. Office of Personnel Office for Fiscal Year 2011 found that federal employees' average 22.13 percent less (the disparity is bigger or smaller depending on where in the country). "In the context of the overall deficit problem Obama will get chump change from this policy and will only enlarge the degree to which Federal pay lags behind that of the private sector," says Lawrence Mishel, president of the left-leaning Economic Policy Institute.<snip>
More:
http://www.newsweek.com/blogs/the-gaggle/2010/11/29/why-does-barack-obama-want-to-cut-the-salaries-of-federal-employees.html:kick:
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