OMB Deputy Director Jeff Zients just laid out some details on the two-year pay freeze for federal employees in a conference call with reporters:
- It’s expected to save $2 billion for the rest of FY 2011, and another $3 billion for FY 2012 alone. The White House expects it will save $28 billion over the next five years, and more than $60 billion over the next 10 years.
- It will apply to all civilian federal employees, including Defense Department civilian employees and anyone under alternative pay plans. That means wage grade, SES, the few remnants still under NSPS, and others will have their pay frozen. But it will not apply to military service members.
- Zients would not rule out a future cut in the size of the federal workforce. He said “no specific decisions have been made about the size of the federal workforce” as the White House plans ahead for the FY 2012 budget, but he said “clearly agencies are going to need to do more with less.”
- Federal employees who are due to be promoted to the next General Schedule grade in FY 2011 or 2012 would still get their promotion, so not all federal salaries will be completely frozen.
- Zients doesn’t expect the freeze will hurt the government’s ability to recruit talented employees. “I’m confident we have an overall value proposition for federal employees that’s quite strong, and a lot of people want to serve,” he said.
- Zients repeatedly denied that the decision was in response to months of negative news articles and criticism from conservatives and libertarians who felt federal employees are overcompensated in comparison to the private sector. He said the White House acted now because it is budgeting for 2012, and had to make a decision on next year’s locality pay by tomorrow. Zients also said the White House made the decision “in the context of difficult decisions as part of deficit reduction.”