Economy

President Trump cancels pay raise due federal workers in January

President Trump cancels pay raise due federal workers in January

Ron Sachs/CNP/AdMedia/NewscomCiting the budget deficit, President Donald Trump said today he is freezing scheduled pay raises for civilian employees of the federal government.

At the same time, Trump planned during a Friday appearance in Charlotte, North Carolina, to direct the Labor and Treasury departments to issue regulations created to make it easier for small businesses to pool resources so they can offer retirement savings plans to their workers, administration officials told reporters.

"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", he added.

In his letter, Trump wrote the locality increase in 2019 would average 25.70% and cost the federal government $25 billion.

"In light of our nation's fiscal situation, federal employee pay must be performance-based, and aligned strategically toward recruiting, retaining, and rewarding high-performing Federal employees and those with critical skill sets", Trump wrote.

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While the president cited the effect of civilian raises on the deficit, administration-backed tax cuts and spending hikes are set to add more than $1 trillion to the deficit over 10 years, a fact not lost on critics of the pay freeze.

Trump informed House and Senate leaders in a letter on Thursday. The 2.1 per cent across-the-board pay increase that was set to happen in January will no longer be happening as a way to maintain budget, CNBC reports. The Senate passed a bill this summer that included a 1.9% raise for federal workers.

Under the law, the 2.1 percent raise takes effect automatically unless the president and Congress act to change it. Congress is now debating a proposal for a slightly lower, 1.9 percent across-the-board raise to be included in a funding bill that would require Trump's signature to keep most government functions operating past September. Congress will ultimately decide whether federal workers get a raise.

This is not the first time in recent history that a president has frozen civilian federal pay raises.

The CBO also estimated that due in part to the tax law, the annual United States federal deficit would exceed $1 trillion by 2019.

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The American Federation of Government Employees, a union for federal workers, is now calling on the House to pass a similar measure.

Trump frequently trumpets the military pay raise while listing his administration's accomplishments.

Trump said the pay freeze would not "materially affect" the federal government's ability to recruit qualified workers.

Instead of giving across-the-board increases, which he says don't address pay disparities or accomplish mission or retention goals, he wants to move to a merit-based system that rewards employees for their performance.

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