Budget

CBO: Federal workers better compensated than in private sector

by Erik Wasson - 01/30/12 8:11 PM ET

The Congressional Budget Office found Monday that federal workers are compensated 16 percent more than comparable private-sector workers on average.

The finding is bound to inflame disputes between Republican and Democrats as to how much to reduce the deficit by cutting federal worker pay.

{mosads}”While millions of Americans continue to struggle with stagnant wages and high unemployment, government bureaucrats in Washington continue to enjoy significant advantages over those whose tax dollars finance their compensation,” House Budget Committee Chairman Paul Ryan’s (R-Wis.) office said in reaction to the finding.

Ryan’s budget proposal from last spring proposed freezing federal worker pay through 2015 and increasing federal worker pension contributions from 0.8 percent of total payroll to 50 percent.

The news comes in a week when the House will vote on a bill, sponsored by Rep. Sean Duffy (R-Wis.), to extend the two-year pay freeze for federal civilian workers one more year, through 2013.

By contrast, President Obama’s 2013 budget request, due to be sent to Congress on Feb. 13, will ask for a 0.5 percent cost-of-living raise for workers.

The CBO found that the advantage federal workers enjoy varies by educational level. For those with only a high-school degree, workers earned 21 percent more and were given benefits worth 72 percent more than in the private sector.

For college graduates, wages were about the same but benefits were 46 percent better in the government.

Meanwhile for advanced degree holders, wages were 23 percent less than in the private sector and benefits were about the same.

The main contributor to the difference in benefits is the defined-benefit pension plan that most federal employees receive. Such generous retirement packages are vanishing from the private-sector workplace, replaced by 401K plans in which companies contribute far less, if anything at all.

The House GOP is looking at ways to change the federal pension system into a 401K-type plan. House Oversight Committee Chairman Darrell Issa (R-Calif.) has also sought to freeze steep increases within pay grades, which are granted on the basis of merit.

The National Treasury Employees Union (NTEU) on Monday denounced the Duffy bill.

“While many in Congress are bending over backwards to protect billionaires and millionaires, they continue to attack hard-working, dedicated frontline employees who guard our borders, protect our air and water, safeguard our food and drug supplies, keep watch over our retirement, assist our veterans, and so much more,” NTEU President Colleen Kelley said.

The union said data from the Bureau of Labor Statistics has shown federal workers are underpaid by 26 percent.

—This story was last updated at 6:18 p.m.

Tags Paul Ryan Sean Duffy