Today, President Obama proposed
a freeze on federal pay for specific workers for a period of two years and we are left wondering why. After all, the President has said repeatedly that we need the public sector to get the economy "back on track" because the private sector cannot.
So if we cut spending in the public sector or at least cancel scheduled increases, does this mean we are acknowledging that the private sector is better equipped to get the economy moving?
Or is this move just a ploy to take steam away from Republicans who will be taking control of the House and pushing massive cost-cuts. We believe that Obama has not found religion on the issue and is trying to reduce the amount of credit the Republicans will get for future cost-cutting in the next election.
Moreover, he will now be able to make it seem like he cares about deficits and being fiscally responsible.
We hope of course that we are wrong and that Obama has decided to become fiscally conservative but this would not be consistent with the plurality of his speeches and actions.
But from a political standpoint, it is a smart move.
In the mean time, it is worth reading two recent articles in the USA Today
on government versus private sector compensation. One discusses
how many government workers make over $150,000 per year and the other discusses
how federal wages and benefits are double what they are in the private sector.
Based on this information, wouldn't it make sense to announce federal pay cuts - not just a freeze?