In a letter today, President Trump announced he would rescind a scheduled pay increase for federal employees in 2019. This announcement, just days before Labor Day, goes against the planned 1.9 percent pay raise in the Senate’s fiscal year 2019 (FY19) Financial Services and General Government spending bill (S 3107), released weeks ago. It should be noted that this federal employee pay freeze does not impact letter carriers.
The announcement that the country “cannot sustain such increases” follows the December 2017 passage of the Tax Cuts and Jobs Act (H.R. 1), which overwhelmingly benefit those who make $200k+ per year and which is projected to increase the national debt by $1.9 trillion between 2018 and 2028, according to the Congressional Budget Office (CBO).
“We must maintain efforts to put our Nation on a fiscally sustainable course, and Federal agency budgets cannot sustain such increases,” claimed the White House in the letter to Congressional leaders (link). “I have determined that for 2019, both across‑the‑board pay increases and locality pay increases will be set at zero.”
The move sparked a wave of criticism from Congressional Democrats and from an Ohio Republican.
“Zero. This seems to be how much respect President Trump has for federal workers,” said Sen. Benjamin L. Cardin (D-MD). “It is outrageous and hypocritical that after spending billions of taxpayer dollars on unnecessary tax cuts for the wealthy and big corporations… that suddenly the White House finds that there is zero money left to pay a minimal cost-of living adjustment.”
“President Trump is feeling cornered and lashing out by canceling a modest, planned pay increase for our dedicated federal workforce,” said Rep. Gerald E. Connolly (D-VA). “His tax bill exploded the deficit, and now he is trying to balance the budget on the backs of federal workers.”
“Congress must act to reinstate the increases for our civilian federal workers before the end of this fiscal year,” said Rep. Michael R. Turner (R-OH). “We must work together to balance the budget but not on the backs of federal civilian employees.”
“It’s insulting to blame these unfair pay cuts on ‘economic conditions’ as President Trump’s policies have lined his own pockets and blown up the debt projections by trillions of dollars,” said Sen. Tim Kaine (D-VA). “Virginia is home to more than 170,000 civilian federal employees, one of the highest concentrations in the country. Trump’s pay cut would disproportionately hurt veterans, who make up one-third of the federal workforce.“
When Congress returns to Capitol Hill next week, the House and Senate are expected to begin deliberating over whether to accept the Senate’s proposed 1.9 percent pay increase or adopt the pay freeze. Should Congress choose to adopt the pay increase, that move would effectively override the President’s freeze announcement.
Hours after proposing the pay freeze on the basis of the unsustainable fiscal standing of the country, the President announced in an interview that he also is considering issuing a regulation that would index capital gains to inflation, a move that would result in around $100 billion in tax cuts to the country’s wealthiest Americans.