Federal workers at low end of pay scale might escape proposed pay freeze


WASHINGTON -- The lowest-paid federal workers may escape the pay freeze President Clinton wants to impose on them this year, an administration official suggested yesterday.

Leon E. Panetta, the federal budget director, said his agency is looking at the possibility of replacing the across-the-board pay freeze with "a more scaled approach," suggesting that employees at the low end of the pay scale may get some sort of raise.

Federal pay scales run from just under $12,000 a year to well over $100,000 for agency heads and members of the Cabinet. But 46 percent of the roughly 2.2 million federal workers, excluding postal employees, earn less than $30,000 a year, said Janice Lachance, political director of the American Federation of Government Employees.

About 300,000 federal workers live in Maryland.

Mr. Panetta also indicated to a Senate Appropriations subcommittee that the administration is rethinking its proposal to cut by 10 percent the benefit that survivors of federal pensioners can receive after the retiree dies.

In a third area where federal workers are scheduled to be hit, Mr. Panetta said the administration and Congress are still working on restoring the "locality pay" raise that the president had proposed to eliminate. Federal workers in Maryland and 35 other regions were scheduled to receive the first of nine annual increases designed to make federal salaries more competitive with private sector pay.

Mr. Panetta said after the hearing that any restoration of cuts to federal pay and benefits has to be offset by reductions elsewhere.

The administration had proposed curbs on federal workers' pay as a way of saving $3 billion this year. The cuts included eliminating the annual across-the-board raise of 2.2 percent that federal workers were to get and the "locality pay" raise.

The administration also had proposed to cut by 10 percent the benefit that would be paid to the widows and widowers of federal workers who opt at the time of retirement for a reduced pension in exchange for the survivor's benefit.

Sen. Barbara A. Mikulski told Mr. Panetta that federal workers "feel they have gotten a sharp elbow from the administration."

Saying the administration felt that "federal employees had to set the example" in the effort to trim the budget deficit, the budget director acknowledged, "If there is one area that needs review again," it is the reduction in the survivors' benefit, which is calculated to save $350 million over four years.

"These women are old," Ms. Mikulski said. "They did not work in the marketplace" and, therefore, have no pension or Social Security on their own.

"They have no place to go," she told Mr. Panetta.

Under the administration proposal, the reduced benefit would apply to the survivor of any federal pensioner who dies after Oct. 1 this year.

Ms. Mikulski also criticized the across-the-board pay freeze, saying it penalized the workers at the lower end of the pay scale, who cannot afford it. Mr. Panetta conceded that the Maryland Democrat had "an excellent point" and added, "We are currently working . . . to develop a more scaled approach to that."

Ms. Lachance, of the American Federation of Government Employees said later that "there have been rumors that the administration may find a way to ease the burden" on the lower-paid workers.

John Sturdivant, president of the union, said that though the pay freeze has a disproportionate impact on women and minorities, the union does not support exempting part of the work force from the freeze.

He said the union is continuing to lobby the administration to eliminate the pay freeze, showing it where offsetting budget cuts can be made.

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