How To Understand the Obama Pay Freeze

As one of his first acts in office on January 22, 2009, President Barack H. Obama made the statement (paraphrased) that "if everyone else has to tighten their belts", so does Washington. He then ordered a pay freeze on the salaries of federal employees - roughly a few more than 100 of these employees - who make more than $100,000 per year.

Besides the pay freezes, Obama put lobbyists under lock and key. The lobbyist relationships put on lockdown included banning gift-giving, which has traditionally been a considerable perk of linking closely to a Washington insider in order to get, give and receive special favors that were not typically in the public interest.

Raises of 1.7 to 4 percent had been the norm, with the 2008 rate of raises at about 2.5 percent. Those who made about $150k, at the top level, were increased to more than $170k. The pay freezes also affected the President's salary at $400,000 annually and the vice-president's pay of more than $220,000.

Other Washington top-level executives affected, other than the president and vice president, were the Assistant to the President, the Chief of Staff, Council to the President, the Deputy Chief of Staff, and the Chief of Staff to the First Lady - all of whom make more than $170,000 per year. Also affected were the Special Assistant to the President and the Trip Director, the Special Assistant for Intergovernmental Affairs, and the Cabinet Liaison; these employees make slightly more than $100,000.

At a rate of about 2.8 percent per year, those who are now making more than $170,000 will not get $4,800 in raises for 2009; those who make a little more than $100,000 will miss out on the extra $2,800-plus for 2009. The ensuing arguments over the pay raise freezes touched on two points: the presidential Executive Order 13483 of December 2008, where President Bush authorized the raises; and arguments from those who believe that the less than half a million in pay freeze savings for the year will not make a resounding dent in the overall budget or the nation's economy.

The move was seen as highly politically-oriented, designed solely to show America that Washington would have to "do as the Romans do" and get on a budget. There was debate as to whether or not the immediate move was meant to truly make a difference. Considering the cost of living in DC, many believed that the six-figure salary budget cuts did not amount to much except inconvenience for those on the receiving end.


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