Out of Control Policy Blog

The Tao of the Federal Pay Freeze

Scanning the news on President Obama's proposal this week for a two-year federal pay freeze for Executive Branch employees, something stuck out in this Washington Post article from Tuesday:

Jeffrey Zients, deputy director of the Office of Management and Budget, said the freeze is "The first of many difficult steps ahead."

This brings to mind the famous quote by ancient Chinese philosopher and Tao Te Ching author Lao-tzu: "A journey of a thousand miles begins with a single step."

Free marketers should avoid the temptation for cynicism regarding President Obama's proposal and instead give him credit where credit is due. Sure, the pay freeze proposal is just a start. Sure, the pay freeze—while estimated to save a significant $60 billion over the next 10 years—is a drop in the bucket relative to the massive current and future structural deficits at the federal level.  But you have to start somewhere. There are no magic wand solutions for our massive fiscal challenges. Solving the budget crisis will require a broad package of reforms, some large and many small, some short-term and some long-term. And taking small steps to stop the bleeding—like temporary pay and hiring freezes—is essential when managing a fiscal crisis. That's what private businesses do in a crisis, that's what many nonprofits do, and that's what the president is proposing for a majority of federal employees.

This week Obama has also talked about selling underutilized federal property and freezing non-security spending.  Are these mostly symbolic steps? Yes, but even symbolic spending cuts are necessary and add up. For those of us who believe the government has a spending problem and not a revenue problem, it is good to see the White House proposing spending cuts—of any size.  And hopefully this opens the door to the bigger discussion about the massive costs that government workers and their pension benefits are imposing on all taxpayers.

I couldn't agree more with my colleague Tim Cavanaugh, who noted over at Reason.com that Obama's proposal is "a step in the right direction by a president who has, well, not always been the most scrupulous spender."

Or again, as Lao-tzu once said, "If you do not change direction, you may end up where you are heading." Kudos to President Obama for demonstrating a willingness to change direction. Here's hoping the Republican Congress will help make this pay freeze proposal a reality in January.

Leonard Gilroy is Director of Government Reform


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