Donald Trump

Trump Remembers Budget Deficit, Announces Federal Pay Freeze

The federal government has run up a deficit of $684 billion this year. The CBO predicts that number will exceed $1 trillion in 2019.

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Ron Sachs/CNP/AdMedia/Newscom

Citing the budget deficit, President Donald Trump said today he is freezing scheduled pay raises for civilian employees of the federal government.

"Under current law, locality pay increases averaging 25.70 percent, costing $25 billion, would go into effect in January 2019, in addition to a 2.1 percent across-the-board increase for the base General Schedule," Trump wrote in a letter to House Speaker Paul Ryan and Vice President Mike Pence (the president of the Senate). "We must maintain efforts to put our Nation on a fiscally sustainable course, and Federal agency budgets cannot sustain such increases." He cited Title 5 of the U.S. Code, which lets the president freeze civilian federal employee pay increases due to "national emergency or serious economic conditions affecting the general welfare."

Trump is right to point out the scary fiscal situation. The federal government ran a deficit of $77 billion last month, a 79 percent increase over July 2017. The budget deficit adds up to $684 billion though the first 10 months of the 2018 fiscal year, up 21 percent from the same point last year, MarketWatch reports.

The rising deficit is due in part to the tax reform bill Trump signed into law in December. Corporate tax revenues saw a 34 percent year-over-year drop in July as companies took advantage of a 14-point cut in the corporate tax rate (from 35 percent to 21 percent).

The tax legislation did nothing to rein in federal spending, which rose 10 percent last month when compared to July 2017. With revenue down and spending up, a larger budget deficit was inevitable. In fact, the Congressional Budget Office predicts that the budget deficit will surpass $1 trillion for the 2019 fiscal year.

While Trump has yet to propose reducing spending on big-ticket items such as defense or entitlements, he is trying to trim the decicit by changing how federal employees are paid. "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 today. "Across-the-board pay increases and locality pay increases, in particular, have long-term fixed costs, yet fail to address existing pay disparities or target mission critical recruitment and retention goals."

The salary freeze won't affect military personnel, who will still get a 2.6 percent pay bump next year.

It's not clear how much money the pay freeze would save. However, Trump in May proposed cutting total federal employee compensation by $143.5 billion. And his latest decision is not particularly surprising. The Washington Post reports:

Trump's position…is a routine move at this point in the budget process because no decision has been made regarding a pay raise for federal employees come January 2019. Under the complex federal pay law, in that case such a message must be issued by the end of August to prevent a much larger raise from taking effect automatically should no decision be made by the end of the year.

In July, the House effectively approved the proposal, although the Senate later passed a bill that includes a salary increase. If the scheduled pay raise garners enough support in both houses to overturn a presidential veto, Trump's freeze won't amount to much.

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  1. Greatest President since Jefferson Davis.

    1. I should have voted for Xi Jinping.

      1. At least Xi didn’t raise military spending by $200 billion. But yeah, let’s celebrate Trump pinching pennies from federal bureaucrats like our resident simpleton SIV.

        1. Sounds like you’ve got some sand in your vagina there, Chipper


  2. He cited Title 5 of the U.S. Code, which lets the president freeze civilian federal employee pay increases due to “national emergency or serious economic conditions affecting the general welfare.”

    *facepalm*

    I mean, I sort of agree with him but pretty much no one else will.


    1. “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 today. “Across-the-board pay increases and locality pay increases, in particular, have long-term fixed costs, yet fail to address existing pay disparities or target mission critical recruitment and retention goals.”

      Predicted Response from the Left:

      He’s a monster!

    2. I completely agree with the premise, but I’m a civil service employee! Oh well, values vs. self interest.

      1. Yeah while I am giddy in enjoyment over the news, I know a lot of worth while government employees who shouldn’t have this happen to them. Your not going to balance the budget this way, SS and the Medi programs have to be reformed (or preferably repealed/found unconstitutional) in order to get us on sound financial ground. Still any cut to the behemoth is a win in my book.

        1. Huh, guess you missed this part of the bit I quoted:

          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

          So if you’re good at your job, and/or have a critical skill set, than you would still get a raise. It is indeed an across the board freeze, it seems, but he’s specifically criticizing the across the board pay raises regardless of merit. Utterly rational, and something I’d expect of any businessman.

          B.L.M. hardest hit (Bureau of Land Management, for clarity).

          1. A few people may remember Rumsfeld tried to implement the same pay for performance. That didn’t last.
            At the VA where I work, only the directors will be deserving & receive a pay raise. -sarc

          2. Further, I want it all slashed. Pay freeze, especially temporary is a good start. It’s not like he set fire to payroll and social security at the same time. This is a pretty clear message that, at some point, a day of reckoning is coming. Anybody who’s ever had to make payroll or been in a situation where their employer is struggling to make payroll knows that this sort of thing is a fair warning (not that I think he’ll actually have a fire sale).

            If you can’t get by this year on your salary from last year in a government job, I’m sorry, I just don’t have any tears for you.

        2. I know a lot of worth while government employees who shouldn’t have this happen to them.

          No you don’t. They’re *all* overpaid – even the ones that are worthwhile. They can weather a *pay freeze* – not a loss of pay, just not a ‘larger than inflation’ CoL increase that they’ve come to expect every year.

          1. I recently discovered that a former coworker was terminated for going on a rant against my former employer on social media. She was functional, but not a top of the line employee when I was there. In any event, market conditions made it harder for the board to raise money from investors and, as a result, she wasn’t offered a bonus.

            I understand being upset about losing out on a bonus, but it’s like these people watched Christmas Vacation like it was an instructional video.

    3. Can a president invoke extraordinary executive powers for a crisis he deliberately created? Something seems fishy about that.

      1. The War on Terror called…

      2. Honestly, that was the bit that made me shake my head. That’s an incredibly thin excuse for using that act and I suspect he’ll get shut down, but at the same time our deficit is arguably a national emergency. It’s just an emergency that no one really gives much of a shit about, potentially including Trump and Republicans in Congress. It’s taken as a given that no Democrat really cares at all.

        I’m really looking forward to watching the media shred Trump for thinking that our deficit is a big deal though. I suspect they’ll talk about the deficit without any hint of context to end-run around their own hypocrisy, or how Congress are the one’s to blame for no spending cuts.

        1. Its the only tool he has in his toolbox – same go-to justification for his Muslim ban and increasing tariffs.

          1. Exactly. The Executive Branch can only do certain things without congress’ approval. Congress has already given this power to a president.

      3. He created the $20TT in debt?

      4. Can a president invoke extraordinary executive powers for a crisis he deliberately created? Something seems fishy about that.

        Of course he can! Right after he pardons himself.

        1. Article II.

  3. Just when I thought he couldn’t possibly be any dumber, he goes and does something like this… and totally redeem himself!

    MAGA!

    1. Most bureaucrats give to democrats and probably vote democrat.

      These bureaucrats already hate Trump.

      MAGA!

  4. Corporate tax revenues saw a 34 percent year-over-year drop in July as companies took advantage of a 14-point cut in the corporate tax rate (from 35 percent to 21 percent).

    So when does this translate to me getting a raise?

    1. When you drop that MAGA hat in front of John.

    2. When you stop renting capital and invest some of those earnings into it.

    3. Tony, the government probably took less of your paycheck than before too.

    4. “So when does this translate to me getting a raise?”

      When you do anything at all worth more than the M/W.

  5. Please make it happen.

  6. While Trump has yet to propose reducing spending on big-ticket items such as defense or entitlements…

    No shit, didn’t he and Congress just hand the DOD another $82 B for the hell of it?

    Remember when there was this huge fight over whether to spend an extra $79 B to fund the military right at the beginning of the Iraq War (the spending John Kerry was against before he was for it)? What happened to that sort of political struggle over spending? Not only was there no fight, there wasn’t even a disapproving harrumph from the Senate. Fuck it. It’s Monopoly money anyway.

    1. Hey, we need to spend that 82 billion so that when our creditors come calling we can bomb ’em back to the Stone Age. DUH!

    2. Let’s not forget that the military, as it always is, is exempt from this freeze too.

    3. We can’t have enough defense spending these days.

  7. It’s a cheap dick move to confuse people. I can’t see how the facts justify using Title 5.

    1. But feel free to argue the economy sucks and the Trump GOP agenda created a national emergency.

    2. I am not sure how it is either dickish or confusing, but the statute seems to have been written to allow him that discretion. Such discretion is well entrenched in statutes like this; Congress knew what they were doing when they abdicated responsibility to him. If all he has to do is declare it an emergency to freeze pay, then so be it. They could’ve added more specific language that would’ve given an employee more to latch on to for a lawsuit, if they’d wanted to.

      1. That’s the thing there. Its not written to require ‘facts’ or ‘justification’. If the President can yell down his detractors – then we’re in a national security emergency and he has the power to do this. If he can’t, then we aren’t and it’ll get shut down.

        Yet another fuckup by Congress ceding power to the Executive.

        1. Speaking of fuckups, I LOVE that you made a fool of yourself talking about my car.

  8. Sooooooo . . . .

    Like, the justification for this is totally bullshit and, frankly petty, reaching, and beneath anyone with even a modicum of dignity.

    OTOH

    Yeah Trump!?

    1. Jesus Christ idiot, you can’t even be coherent, why are you so stupid AND prolific?

  9. Not as good as firing half the parasites, but better than nothing. What we are seeing is a Republican Party struggling to grab back some libertarian spoiler votes–votes that clearly reject the national and international socialism of the Nixon-subsidized parties and imperil their claims on government paychecks.

  10. The pay will continue to freeze until morale improves.

  11. When the defense appropriations bill passed I was reading a story about it and there was a part in it about how a rider that would have made reforms to employee pensions had been excluded from the final version. Apparently the reforms had included calculating the employee’s pension based on their highest five years (instead of four) and would have required them to contribute another one percent of their salaries to their pensions. The Democrats had opposed this and had managed to get the rider excluded. Trump is using what powers he has here and I can’t really blame him. Reform is going to be a long and difficult process.

    1. Remember when the liberals cheered the idea of a president using his phone and pen.

  12. I worked in DC for years between deployments with the Reserve and totally favor this.

    Every time I met a capped out Human Resources GS-13 taking in $130k a year for a job that pulled $50k in the real world I just about lost my shit. So, I lost my shit a lot.

    And the sense of entitlement from these clowns just defies description. The fact that an obese diabetic desk flying toad can take in $40-50k a year in retirement after 30 years when your average retired military type who has deployed to multiple wars takes home a fraction of that is even worse.

    They all need a pay cut of at least 20%. The old compact of “yeah, we won’t pay you much, but we can’t fire you” has been completely corrupted by the civil service unions. Which are a whole other thing that needs to done away with….

    1. Yeah, government jobs used to have middling to low pay, but good benefits.
      Now they pay more than productive sector jobs, and the benefits are gold plated.

      1. Given the labor protections and benefits my gut feel is that GS jobs need to have their compensation tied to the private sector.

        I’m not sure how this would work in practice, but their compensation packages are so out of control at present I’d rather go back to a spoils system where we replace the whole lot of them every four, or eight, years.

    2. Remember when the government almost shutdown? I heard a lot of complaints. The government employees wanted it to last at least couple weeks so they can get a free vacation. They also complain when OPM posts a yellow status instead of red for inclement weather because they get a free day off for red but have to take vacation for yellow.

      1. Remember when the government almost shutdown?

        Remember how the government shutdown and Reason pretty much accepted, maybe even endorsed, the notion that we can never shut down the government because it costs to much?

        Apparently taxpayers owe all these people jobs for life and without even an intermittent week’s worth of “Are we really getting what we pay for?” reflection.

  13. HAPPY LABOR DAY FED BUREAUCRATS
    THANK YOU FOR YER SERVICE
    LOL!!!

    1. “HAPPY LABOR DAY FED BUREAUCRATS”

      Q: So, how many people work here?
      A: About half of them.

  14. The rising deficit is due in part to the tax reform bill Trump signed into law in December. Corporate tax revenues saw a 34 percent year-over-year drop in July as companies took advantage of a 14-point cut in the corporate tax rate (from 35 percent to 21 percent).

    The tax legislation did nothing to rein in federal spending, which rose 10 percent last month when compared to July 2017. With revenue down and spending up, a larger budget deficit was inevitable.

    Total federal revenues are up 33BB over last fiscal year. That’s a 1.3% increase so far. If we limit ourselves to just a calendar year comparison, then they are up 4.2BB so far (through the latest Treasury numbers which only go through June). Is there a reason you picked just corporate tax receipts and claimed that revenues had fallen? What do we call it when someone dishonestly claims something? It’s a word that reason likes to toss around a lot these days, so I’m sure it will come to you, Joey.

  15. Good first step.
    Now lay off all the nonessential federal workers identified in the last shutdown.

  16. He cited Title 5 of the U.S. Code, which lets the president freeze civilian federal employee pay increases due to “national emergency or serious economic conditions affecting the general welfare.”

    Trump is now routinely citing statutes/acts with national securing or emergency clauses as justification for his own policies. That both Reason and commenters in this thread do not find that troubling is almost as frightening as Trump’s continued misuse of that power.

    1. If Trumps worse deeds are cutting pay increases for overpaid bureaucrats and denying entry for some immigrants based on ’emergency powers’, Trump will be the best president in 88 years.

  17. This isn’t about the Supreme Court. THIS IS ABOUT ALL WOMEN EVERYWHERE!!!!!!!

  18. WHY DO YOU MAKE ME SO MAD THAT I GO OFF UPSIDE YOUR HEAD?

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