Trump halts pay raises for federal staffs
He cites budget constraints nine months after tax cuts
WASHINGTON — President Donald Trump informed Congress on Thursday that he is canceling pay raises due in January for most civilian federal employees, citing budget constraints.
In a letter released by the White House to House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell, Trump said he was canceling a 2.1 percent across-the-board raise for most workers, as well as separate locality pay increases averaging 25.7 percent.
“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,” Trump’s letter said.
The president last year signed a package of tax cuts that is forecast to add about $1.5 trillion to federal deficits over 10 years.
Trump cited the “significant” cost of employing federal workers as justification for denying the pay increases, and called for federal worker pay to be based on performance and structured toward recruiting, retaining and rewarding “high-performing Federal employees and those with critical skill sets.”
His announcement came as the country heads into the Labor Day holiday weekend.
Democrats immediately criticized the decision, citing the tax cuts Trump signed into law last December. That law provided tax cuts for corporations and the wealthiest Americans,
and more modest reductions for middle- and low-income individuals and families.
“Trump has delivered yet another slap in the face to American workers,” said Democratic National Committee Chairman Tom Perez.
Trump’s position is a routine move at this point in the budget process because no decision has been made regarding a pay raise for federal employees in January. Under the complex federal pay law, in that case such a message must be issued by the end of August to prevent a much larger raise from taking effect automatically should no decision be made by the end of the year.
In his February budget proposal, Trump advocated a freeze on federal salary rates — what would be the first since a freeze from 2011-13. In the years since, Congress has taken no position on a raise, allowing the annual “alternative” raise specified in similar letters — first from President Barack Obama, and then last year from Trump — to take effect by default.
That congressional strategy of action by inaction has resulted in raises in the 1 percent to 2 percent range each year for employees in the General Schedule, the pay system covering most white-collar federal employees below the executive levels. Blue-collar employees have received equivalent raises, varying by locality, while raises for high-level employees are linked to performance ratings.
The House in July passed a spending bill that would continue the recent pattern by remaining silent on the issue. But the Senate soon afterward passed its own version of that bill containing a 1.9 percent raise. It advocates paying a 1.4 percent raise across-theboard for General Schedule employees and parceling out the remaining 0.5 percentage points in differing amounts, varying by locality.
The House and Senate must resolve their differences in a coming budget conference. In a policy statement as the Senate voted on its version, the Office of Management and Budget said it was “concerned” about inclusion of a raise but didn’t threaten a veto.
Unions representing the 2 million member federal workforce urged Congress to pass the 1.9 percent pay raise.
“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,” said J. David Cox, president of the American Federation of Government Employees, which represents some 700,000 federal workers.
“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,” Cox said.
“They have already endured years of little to no increases and their paychecks cannot stretch any further as education, health care costs, gas and other goods continue to get more expensive,” added Tim Reardon, national president of the National Treasury Employees Union.
Congress has approved legislation to give military service members a 2.6 percent pay raise, the biggest in nine years, but funding for the pay raise has not yet been approved.
In July, the Trump administration sharply revised upward its deficit estimates compared with the estimates in the budget proposal it sent Congress in February. The worsening deficit reflects the impact of the $1.5 trillion, 10-year tax cut, as well as increased spending for the military and domestic programs that Congress approved earlier this year.
The administration’s July budget update projected a deficit of $890 million for the fiscal year that ends Sept. 30, up from the February estimate of $873 billion. The $890 billion projection represents a 34 percent increase from the $666 billion in 2017.
For 2019, the administration is projecting the deficit will top $1 trillion and stay above that level for the next three years.
The only other period when the federal government ran deficits above $1 trillion was the four years from 200912, when the government used tax cuts and increased spending to combat the 2008 fiscal crisis and the worst economic downturn since the 1930s.
Rep. Gerry Connolly, D-Va., who represents many federal workers, blamed what he said was Trump’s mismanagement of federal government.
“His tax bill exploded the deficit, and now he is trying to balance the budget on the backs of federal workers,” Connolly said.
Information for this article was contributed by Darlene Superville, Martin Crutsinger, Matthew Daly and Zeke Miller of The Associated Press; by Toluse Olorunnipa and Louis Labrecque of Bloomberg News; and by Eric Yoder of The Washington Post.
The administration’s July budget update projected a deficit of $890 million for the fiscal year that ends Sept. 30, up from the February estimate of $873 billion. The $890 billion projection represents a 34 percent increase from the $666 billion in 2017.