House approves pay freeze as new study addresses federal compensation

Published: Wednesday, Feb. 1 2012 12:00 a.m. MST

As Congress debates federal pay freezes, a new Congressional Budget Office study suggests that federal workers are overpaid — and underpaid. (Associated Press) As Congress debates federal pay freezes, a new Congressional Budget Office study suggests that federal workers are overpaid — and underpaid. (Associated Press)

As the House voted on extending the 2010 federal pay freezes, a new Congressional Budget Office study suggests that federal workers are overpaid — and underpaid.

In a new report released in January, the CBO compared the compensation of federal and private-sector employees, finding that some federal employees are overpaid by comparison, while some are underpaid.

According to the report, the federal government currently employs 2.3 million workers — not counting military personnel — or about 1.7 percent of the 2010 workforce. The wages and benefits of those workers cost the government about $200 billion per year, with $80 billion going to civilian personnel working in national defense.

The study found that federal civilian workers with no more than a high school diploma earned about 21 percent more than similar workers in the private sector. Workers with a bachelor's degree earned roughly the same hourly wages as in the private sector, and federal workers with a professional or doctorate degree earned about 23 percent less.

In terms of benefits, the CBO found that average benefits for federal workers with a high school diploma were 72 percent higher than in the private sector, while benefits for those with a bachelor's degree were 46 percent higher. Workers with a professional or doctorate degree saw roughly the same level of average benefits as in the private sector.

Total compensation for federal workers with a high school diploma was 36 percent higher than in the private sector, while those with a bachelor's degree averaged 15 percent higher. Federal employees with a professional or doctorate degree received 18 percent lower total compensation.

Overall, the CBO reports, the federal government paid 16 percent more in total compensation.

Jason Richwine and James Sherk of The Heritage Foundation, who have studied federal compensation previously, said the CBO approach was different than their own, but that its conclusions were broadly similar.

Heritage was criticized in 2010 by John Berry, director of the Office of Personnel Management, who called its federal compensations studies "a pretty prolonged misinformation campaign."

William Dougan, the president of the National Federation of Federal Employees, also criticized Heritage at the time, telling the Washington Post, "If you tell people the same lies enough times, eventually they will start to believe them. Federal workers are not overpaid; they make significantly less than those doing the same work in the private sector."

Andrew Biggs, a scholar with the American Enterprise Institute, told Government Executive that he was pleased that the government's CBO looked into the issue, because "it's a little more difficult for public employee advocates to play the smear game."

National Treasure Employees Union President Colleen Kelley said the studies support a misguided effort to decrease federal pay.

"An enormous amount of time and energy is going into studies purporting to show that federal workers are overpaid," Kelley said. "It is just a foolish drive for the lowest common denominators, and is missing the big picture — which is what are we going to do to put people back to work and accelerate the economic recovery?"

An August fact check byPolitifact reported that 459,016 federal workers made at least $100,000 in average base salary each year. In November 2010, USA Today reported that the number of federal workers making more than $150,000 had "soared tenfold in the past five years and doubled since President Obama took office," while in December of last year the paper also reported that newly hired federal workers are starting at much higher salaries than in the past.

"Since President Obama took office, the number of federal workers that make over $150,000 a year has more than doubled," GOP presidential candidate Mitt Romney said at an Americans For Prosperity event in November. "I insist that we limit the salaries and benefits of public workers to those which exist in the private sector. Public servants shouldn't get a better deal than the taxpayers they work for."

After the 2010 midterm election, Obama placed a pay freeze on executive branch workers. The administration is planning to propose an end to the freeze and to include a 0.5 percent pay raise in its fiscal 2013 budget, the Agence France-Presse reported in early January.

However, Rep. Sean Duffy, R-Wis., introduced legislation that would extend the freeze until Dec. 31, 2013. The bill, H.R. 3835, would also freeze the salaries of Congressional lawmakers and federal employees.

The Hill reports the bill was approved Wednesday evening, 309-117. The bill was supported by 72 Democrats, although just 50 were needed to approve the bill's passage.

House Minority Whip Steny Hoyer criticized Duffy's legislation during his weekly press briefing, saying it was only designed to score political points, The Hill reports.

"Republicans are continuing to waste time on a pay-freeze bill which, I think, is not justified, and continue to avoid suggestions that the wealthiest in America pay their fair share," Hoyer said.

According to Roll Call, Rep. Jim Matheson, D-Utah, disagrees.

"At a time when Utah families are struggling with tight budgets, now is not the time for members of Congress or federal employees to receive a pay increase," Matheson said. "Reducing the red ink back here and putting us on a path toward a balanced budget will take shared sacrifice and that starts with us, not just talking the talk, but walking the walk."

The Obama administration has also renewed a previous push to cap the pay of government contracting executives at $200,000, the Washington Post reports.

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