Monday, November 29, 2010
Obama to freeze federal wages for 2 years
Obama has planned to place a wage freeze on all federal employees. This strategy has been projected to save 28 Billion USD in the budget over the next five years. Although Obama has said it has been in place to help the economy, many people who work for the federal government may feel they are being targeted by this. The wage freeze does not extend to military personal though. If this is the first step the White House is taking, how much further are they planning to use their power to save their budget?
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4 comments:
This seems to be a random and ill-advised cracking of the whip to reduce the debt. As mentioned in a previous post, this will reduce consumption for these employees which will affect the economy. Government spending, particularly in the form of salaries, has a larger effect due to the government multiplier, meaning that the effect of this legislation will be much larger than the actual freeze itself. We need to be looking at the real issues in government spending, namely the defense budget. Obama needs to make hard, concrete choices, not these less controversial, but less impactful cuts. America needs to be prepared to forfeit some government services if it wants to decrease the debt, but it also needs to be intelligent about how it cuts so as not to harm the economy in this precarious time.
I agree with Becky that cutting the defense budget should be the first place we should go to if we want to reduce debt, but I also think that this would have already happened if it was going to...
Cutting defense budget is easy said than done. Yes America started these wars and they were mistakes but that also means there is no turning back. We have so many enemies internationally that it's not easy at all to reduce the defense budget because it's for the sake of all of us. I will be glad, though, if the government can find a way to reduce the budget but at the same time I give it my sympathy.
If you look at Obama's plan for reducing the national debt, none of the approaches has been taken positively by the Republicans from health care reform, reducing social security benefits for the rich, tax cuts on middle class and let tax cuts expire on the rich which all will help the government save money.
The average federal worker received $81,258 in salary and $41,791 in benefits last year, according to Commerce Department statistics.Meanwhile, a USA Today analysis revealed that the number of government employees earning $150,000 or more per year rose tenfold in the past five years, doubling since Obama took office.
So this step is small but I see it as necessary because at least we are doing something about the huge debt.
It is absolutely a necessary step. Non-government workers take salary cuts and benefit cuts all the time to help fend off debt. Why shouldn't the government do the same? This should also be considered for retirement pensions for government workers. This does not mean get rid of them all together--but rather wait until the government can afford to dish them out.
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