Trump Shortchanges Federal Employees on Cost of Living Increases
The President of the United States, unlike the governors of forty-four U.S. states, does not have the power of the line item veto. Knowing this, Donald Trump is attempting to initiate the line item veto through presidential fiat, beginning with federal employee cost of living increases.
Mr. Trump, in his current role as a reality TV star portraying the president of the United States, has decreed that approximately two million federal employees will NOT receive salary increases scheduled for January of 2019, according to a report by AP reporter Darlene Superville that has been cited by The Washington Post and carried by most major media outlets.
Interestingly, none of these news sources have bothered to explain that, under normal conditions, the President does not have the power to set or cancel pay increases for federal employees. Under normal conditions, Congress votes on the federal budget, which includes the allocations for the salaries of all federal employees. Under normal circumstances, the President may then either approve or veto that budget, and Congress then has the option of sustaining or overriding the President’s veto.
Apparently, conditions are not normal enough for Mr. Trump.
In a letter that President Trump sent to House Speaker Paul Ryan on August 30. 2018, Mr. Trump presented “an alternative plan for pay adjustments for civilian federal employees for 2019” that consists of giving federal employees none of the pay hikes they expected to receive.
In his letter, Mr. Trump cites Title 5 of the United States Code which, he believes, “authorizes me to implement alternative plans for pay adjustments for civilian Federal employees covered by the General Schedule and certain other pay systems if, because of ‘national emergency or serious economic conditions affecting the general welfare,’ I view the increases that would otherwise take effect as inappropriate.” (Emphasis added.)
(One simply cannot ignore the personification of the role of the president. Any previous president writing the same letter would have written something like “authorizes the president” instead of “authorizes me,” which is a blatant indication of Mr. Trump’s imperial mentality.)
Neither Mr. Trump nor anyone else has actually declared “a national emergency” and, according to a host of economic indicators, the economy is going at great guns at the moment.
In an article published on August 30, 2018, the Wall Street Journal reports that U.S. Consumer Spending Rose 0.4% in July, suggesting the economy sustained its momentum going into the second half of the year.
On the same day, the WSJ also reported that Core Inflation Hits Fed’s 2% Target as Spending Heats Up in an article that suggests that robust spending by consumers and businesses pushed up prices across the economy.
On August 29th, the Journal reported that U.S. Corporate Profits Soared in Second Quarter, Boosted by Tax Cuts and Economic Growth according to the U.S. Commerce Department, which cited a 16.1% year-over-year gain, the largest in six years.
On the same day, the Journal also reported that U.S. GDP Growth Revised Up in Second Quarter indicating that economic growth was stronger during the second quarter than earlier estimated.
On August 28, the Journal told its readers that U.S. Consumer Confidence Surged in August to Near 18-Year High, a measure of economic confidence among American households, rose in August to its highest level since October 2000.
Now, you may or may not believe these reports actually reflect the true state of the economy (and, no, I don’t believe them either) but these reports do not indicate that there is any widespread evidence that the United States is in an economic crisis that would justify freezing salaries for civilian employees of the federal government. (We may be heading toward such a crisis, but we aren’t there yet.)
In fact, in order for Mr. Trump to assert that we are in an economic crisis, he would have to disassociate himself from 18 months of worth of bragging about how great the American economy is doing under his leadership. For an ordinary politician, that might seem to be an insurmountable obstacle, claiming to be building a strong economy while simultaneously claiming that we are in an economic crisis, but Mr. Trump has proven that he has the ability to maintain 100 percent contradictory beliefs at the same time in his fact-free universe.
In the absence of a declared national emergency, in what appears to be a strong economic environment, the incumbent president is simply usurping the prerogatives of the Congress, extending his fiat rule over the country…and no one appears able or willing to stop him.
This is how elected leaders become dictators.
According to Mr. Trump, the budget buster was the “locality pay increases” which, according to Trump, would have cost the federal government an additional $25 billion. In a clever piece of misdirection, Mr. Trump has conflated the locality pay increases with the standard cost of living increases. In his letter, Trump wrote that:
“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.”
If you read that sentence too quickly, or without proper reflection, you could come away with the mistaken belief that the regular cost of living increases were going to cost $25 billion.
In actuality, the regular cost of living increase would only cost the federal government $5.8 billion, a fact that Trump neglected to mention because it undermines his case. That estimate is based upon information gleaned from Downsizing The Federal Government, which is obviously giving us a conservative (and therefore possibly inflated) take on the subject. According to this website, the federal civilian workforce was paid $276 billion in 2017. Multiply that by 2.1% and you get $5.8 billion.
All together, the cost of living increases that were originally scheduled for 2019 would total approximately $30.8 billion. That’s not chicken feed, but it isn’t a budget buster either. The federal budget for 2018 was approximately $4.094 Trillion, which means that the cost of living increases for federal employees would be approximately THREE-QUARTERS OF ONE PERCENT (0.75 percent) of the budget.
This raises another question: what, exactly, are those locality pay increases?
As the name implies, locality pay increases are given to federal employees who live in high-cost communities where it is simply impossible for federal employees to live on the standard federal pay rates. This includes places like The San Francisco Bay area, New York City and Washington, D.C., where the cost of living is so exorbitant that no one on a civil service salary can afford to live there.
According to FederalPay.Org, there are 47 General Schedule Locality Areas in the United States. The cost of living adjustments range from 39.28 percent in the San Francisco Bay area down to 15.76 percent in the Albuquerque-Sante Fe -Las Vegas area. The New York City Metropolitan area gets 32.13 percent. The Washington DC Metropolitan area gets a 28.22 percent increase.
On average, the 47 locations listed get an average increase of 21.57 percent. Mr. Trump’s letter to Speaker Ryan claims that the increases average 25.70 percent. The discrepancy may reflect foreign service personnel living outside the United States who are not included in the data from FederalPay.Org.
(There is, however, a curious anomaly in FederalPay.Org chart. It actually lists “Rest of United States” as a separate locality pay increase area eligible for an increase of 15.37 percent. If that is correct, then all federal employees would be entitled to a 15.37 percent cost of living adjustment in addition to the across-the-board increase of 2.1 percent.)
Mr. Trump’s letter to Mr. Ryan constitutes an outright usurpation of the powers of the Congress because no state of emergency has been declared and there is no evidence of an immediate financial crisis.
The Effect of the Pay Cuts on the 2018 By-Election
With this move, which is in effect an executive order of the President, Mr. Trump has just put two million more votes into the Democratic column in the upcoming congressional election. (Actually, many of those voters were probably Democratic voters BEFORE the salary freeze.)
This might appear to be a singularly stupid thing to do with the mid-terms coming up but, once again, Mr. Trump is demonstrating that he is crazy like a fox because these salary increases were not scheduled to take effect until after the November by-election. As a result, the pain will not be felt until long after the votes have been counted.
More importantly, those two million votes are spread out across all fifty states, the District of Columbia and our embassy operations. If you divided those two million votes across the fifty states and the District of Columbia, it works out to an average of 39,216 votes per jurisdiction or 4,597 per congressional district, which is not enough votes to sway the outcomes of most congressional races.
Trump’s strategy looks even better when you realize that federal employees are not evenly distributed among the fifty states, with 775,000 federal employees residing in just four states: California (250,000), Texas (200,000), Virginia (178,000) and Maryland (147,000.) Add in the 95,000 federal workers who actually live in Washington, and you get 870,000 federal employees in just five jurisdictions, four of which are Democratic strongholds where the extra votes won’t make any difference.
The pay freeze is also a sneak attack on Ted Cruz
In Texas, where the party affiliation breaks down to 40% Democratic versus 39% Republican, 200,000 voters might make a serious difference…to Republican Senator Ted Cruz, who is facing a serious challenge from his high profile Democratic opponent, Beto O’Rourke.
Here, again, Trump is demonstrating some serious political acumen. (Even if someone else is pulling the strings, Trump is at least smart enough to be listening to someone who has a clue, for a change.) Trump hates Ted Cruz for a whole host of reasons, not the least of which was that Cruz was the most successful challenger to face Trump in the 2016 Republican primaries. With two Democratic Senate seats teetering dangerously toward the Republican column in Missouri and Florida, Trump seems to believe that losing one Senate seat belonging to a possible Republican rival in the 2020 primaries might not be such a bad deal.
Payback for Washington’s refusal to host Trump’s parade
Trump’s decision to stick it to federal employees has another ramification: 420,000 of those federal employees live in the DC Metro area. With 178,000 living in Virginia and 147,000 living in Maryland, that leaves 95,000 living in the District of Columbia, the city that just put the kibosh on Trump’s hopes for a military parade to rival those May Day parades staged in Russia, China and North Korea.
The salary freeze is a gratuitous “fuck you” to federal workers who live in the District, where they represent 14% of the 693,000 people who live in the District. If only 50 percent of those people are actually voters, then those 95,000 people represent 27.4 percent of the voters in Washington.
Once again, however, the District of Columbia is a long-term Democratic stronghold, so Trump loses nothing by insulting federal workers living there by cancelling their scheduled salary increases. There are no congressional seats at risk in the District, so all Trump has to worry about is a voter backlash in 2020, if he has the chutzpah to run again in 2020.
Don’t Forget that $100 billion Capital Gains Reduction
This gratuitous “fuck you” to federal workers follows a July 30, 2018 report from New York Times reporters Alan Rappeport and Jim Tankersley indicating that the Trump administration is considering tinkering with the tax laws to give high income tax payers a $100 billion tax cut.
According to their report, Treasury secretary Steven Mnuchin told reporters that he was investigating whether the Treasury Department could use its regulatory powers to allow tax payers to adjust the original cost of their assets for inflation before calculating the net profit from the sale of those assets.
With typical headline writer hyperbole, this story was reported to have a $100 billion price tag. Citing the Penn Wharton Budget Model (from the Wharton School of Business at the University of Pennsylvania), Rappeport and Tankersley actually suggested that this tax strategy could cost the government $100 billion over the next ten years, or around $10 billion per year. That’s still twice as much, per year as the standard cost of living adjustment would have cost the government.
The Hidden Agenda: Killing Off the Civil Service System
Ultimately, however, Trump’s move to freeze salaries is really an attack upon the Civil Service System, which protects federal employees from the depredations of party hacks (from both parties) who would like to get rid of employees loyal to the other party and replace them with their own people.
Under the old “spoils system,” federal employees served at the pleasure of the President and could be dismissed at any time for any reason. This made it difficult for federal employees to perform regulatory roles since the people they were attempting to regulate (up to and including elected members of Congress) could simply have them fired, if they belonged to the same party as the sitting president.
Under the Pendleton Civil Service Reform Act of 1883 and subsequent legislation, federal employees were gradually protected from political manipulation. This irks Trump because he would dearly love to fire many federal employees who insist upon doing their jobs the way they should be done…often to his detriment.
In his letter to Ryan, Trump expresses the belief that “…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.”
In other words, he wants the power to pay federal workers according to performance standards. Who would ever argue with that?
Well, that might actually depend upon whom is formulating the performance standards. Remember, this is the president that demanded a pledge of personal loyalty from FBI director James Comey and then fired him when he refused to make that pledge.
When we give elected officials — who are (supposedly) temporary employees — the right to decide whether to keep career civil service employees or dismiss them, we are giving away one of the principal checks and balances that keep the government more or less honest. Protected civil service employees are more likely to stand up to political pressure than they would be if they were not so protected.
Why this really should matter to you
If you don’t think this is so important (and you obviously do or you wouldn’t have read this entire article) consider this: just about every single person who is involved on the interstate level in protecting the health and welfare of American citizens is a federal civil service employee. What’s at stake here is clean water, clean air, cars that are safe to drive, air traffic safety, interstate commerce, safe drugs, safe food, and healthy health care. If the federal employees who perform those functions — and many others — are stripped of their Civil Service protections, it will become impossible for them to do their jobs the way they should be done…and that is exactly what the Republican moguls want from Donald Trump.
Now that I have wasted my evening putting this together, and wasted your time by getting you to read it, I have two questions for you to think about: do you actually give a fuck about what happens to federal employees and, if so, what the fuck are you going to do about it?
What am I doing? I wrote this article. If you agree that this is important, share the article as widely as you can.