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Obama calls for two-year freeze on federal pay

WASHINGTON — President Obama called Monday for a two-year freeze on federal workers' pay, a largely symbolic act that kicked off a week of partisan debate over how to contain government spending while stabilizing the economy.

"Going forward, we're going to have to make some additional very tough decisions that this town has put off for a very long time, and that's what this upcoming week is really about," Obama said in announcing the freeze, which would save $5 billion over two years.

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

Congress must approve the pay freeze for it to become effective.

Federal workers became a favorite campaign target of Republicans, who argued that the Washington payroll has swelled as private workers nationwide suffered job losses during the recession. Republicans have pressed for even steeper cuts to federal workers' pay.

"As the recent election made clear, Americans are fed up with a government that spends too much, borrows too much and grows too much," said Rep. Eric Cantor, R-Va., the incoming House majority leader. "With so many Americans tightening their belts, Washington must do the same."

The federal budget deficit was about $1.3 trillion in the recently ended fiscal year, and the national debt is estimated at nearly $14 trillion. Paying interest on that debt alone gobbles 6 percent of all federal spending, and that's projected to rise to 17 percent by 2020.

The president is to meet with congressional leaders from both parties today to haggle over what can get done in their lame-duck session over the next three weeks, especially whether to extend Bush-era tax cuts that otherwise will expire at year's end.

Obama's pay-freeze proposal drew fast opposition from labor and liberal groups, while many Republicans and some Democrats said it wouldn't go far enough.

Lawrence Mishel, the president of the liberal Economic Policy Institute, called the plan "another example of the administration's tendency to bargain with itself rather than Republicans" and said it reinforced a "conservative myth" that federal workers were paid too much.

House Minority Leader John Boehner, R-Ohio, who is to become the speaker of the House of Representatives next year, said Obama should go further and support a federal hiring freeze.

Like the ban on earmarks — the local projects that lawmakers slip into legislation — which congressional Republicans endorsed earlier this month, independent budget analysts thought the pay freeze would make little difference to the federal budget but that it did give Obama a head start in this week's political gamesmanship.

"Freezing federal pay is just getting ahead of the curve. It's a good talking point," said Tripp Baird, who was a top aide to former Senate Republican leader Trent Lott of Mississippi and is now an analyst at the Heritage Foundation, a conservative research center.

The president indicated that his plan is a compromise that acknowledges that millions of Americans have been living with pay cuts and furloughs since the Great Recession of 2007-08 — or have lost their jobs altogether.

"After all, small businesses and families are tightening their belts," Obama said. "Their government should, too."

His plan arrived against the backdrop of a widening debt crisis in Europe that's a brutal reminder of what the United States could face someday if it doesn't get its fiscal house in order.

Still, it's not clear what hard choices politicians are prepared to make in Washington's polarized partisan culture. White House press secretary Robert Gibbs said Monday that he didn't expect today's meeting between Obama and congressional leaders to be decisive.

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