Obama-Congress Paychecks Safe From Automatic Budget Cuts

Feb. 28 (Bloomberg) -- Hans Nichols reports on the consequences to the economy of the sequester and Jack Lew's nomination as Treasury Secretary. He speaks on Bloomberg Television's "Lunch Money." (Source: Bloomberg)

While hundreds of thousands of U.S. government employees may be furloughed due to federal spending cuts, President Barack Obama and members of Congress won’t need to worry about their paychecks.

The across-the-board reductions set to begin tomorrow might eventually close air-traffic control towers, reduce the number of nutrition vouchers for low-income children and lead to unpaid leave at the Pentagon and other agencies.

The cuts, known as sequestration, will have no impact on the president, U.S. lawmakers and other top government officials. It is especially ironic that Congress, which has the power to avert the reductions, has nothing to lose in the negotiations, said Dan Gordon, former head of federal procurement in the Obama administration.

“The members of Congress are damaging our country by their refusal to repeal sequestration, and I think the American public would like them to personally feel some of the pain they are imposing,” said Gordon, an associate dean at George Washington University law school in Washington.

“Whether it’s travelers at airports, visitors to national parks or children in the schools -- they’re all going to be suffering because of the refusal of members of Congress to do their jobs,” he said in a phone interview.

President’s Pay

Unless they’re averted, the automatic cuts would total $85 billion in the final seven months of this fiscal year and a total of $1.2 trillion over nine years. About half would come from defense and the rest from discretionary domestic spending.

Sequestration’s effects, including the furloughs, aren’t likely to be felt for several weeks, Gordon said. Many of the reductions won’t be felt immediately because of the 30-day notice requirement for furloughs.

The automatic cuts could slice gross domestic product growth by 0.6 percent while reducing the level of employment by 750,000 jobs, according to the nonpartisan Congressional Budget Office.

The president’s pay of $400,000 a year is exempt from cuts, according to documents provided by the White House Office of Management and Budget. It is set by Congress, which also approves its own salary.

Most lawmakers receive annual pay of $174,000, with those in leadership posts paid more. House Speaker John Boehner, an Ohio Republican, gets $223,500, and House Democratic Leader Nancy Pelosi of California collects $193,400.

Cabinet secretaries and many other senior agency officials appointed by the president can’t be furloughed because “they are considered to be entitled to the pay of their offices solely by virtue of their status as an officer” rather than by the hours they work, according to Office of Personnel Management documents.

Offering Sacrifice

There have been some offers of sacrifice.

In September, a few dozen House members endorsed cutting their own pay, Senate salaries and the paychecks of Obama and Vice President Joe Biden if sequestration took effect. The proposal from Charlie Bass, then a Republican representative from New Hampshire, would have reduced salaries for all the elected officials by 8.2 percent.

It didn’t get to a floor vote.

Representative Tom Petri, a Republican from Wisconsin, said he co-sponsored the bill because it “seemed to be in the spirit of fairness.”

“You don’t walk into a room and say this won’t apply to me, but I think you all need to tighten your belts,” Petri said in a phone interview.

If sequestration occurs, Petri “would consider giving” part of his pay to charity, spokesman Lee Brooks said in an e- mail.

Pentagon Furloughs

Deputy Defense Secretary Ashton Carter, whose job is protected from cuts, offered to return 20 percent of his salary to the Treasury if furloughs begin. The Pentagon has said as many as 750,000 civilian employees may be required to take one day a week of unpaid leave for as long as 22 weeks under sequestration.

“So there’s a real human impact here,” Carter testified before the House Armed Services Committee this month. “We’re asking all those people who are furloughed to give back a fifth of their salary.”

Carter’s new boss, Chuck Hagel, hasn’t said whether he will join in the sacrifice. He was confirmed by the Senate on Feb. 26 as defense secretary.

There’s been no word from Hagel’s chief. Jessica Santillo, an Office of Management and Budget spokeswoman, didn’t respond to a e-mailed question about whether Obama would give a portion of his salary to charity or return it to the Treasury if sequestration occurs.

Transportation Department

At the Transportation Department, “there aren’t any similar plans,” Meghan Keck, an agency spokeswoman, said when asked whether Secretary Ray LaHood, Deputy Secretary John Porcari or any heads of the sub-agencies would volunteer for pay cuts due to the sequester.

Most of the roughly 47,000 workers at the Federal Aviation Administration, part of the Transportation Department, may be required to take one day of unpaid leave during each two-week pay period through September. Air-traffic controllers and other FAA workers would take about 11 days of mandatory time off, Democrats on the House Appropriations Committee said in a report this month.

Sarah Horowitz, a Commerce Department spokeswoman, declined to comment on whether the agency’s undersecretaries and other senior officials will be subject to reductions in pay or benefits if the cuts occur.

Congressional Offices

The National Oceanic and Atmospheric Administration, or NOAA, would reduce the number of its contractors by about 1,400 and furlough as many as 2,600 employees if the cuts occur, Deputy Commerce Secretary Rebecca Blank said this month in a letter to Senator Barbara Mikulski, the Maryland Democrat who leads the Appropriations Committee.

As for Congress, “every House leadership, committee, and member office will be cutting spending” if sequestration occurs, Brendan Buck, a spokesman for Boehner, said in an e- mail. “The speaker’s office will be no different.”

Buck didn’t respond to questions about whether Boehner would return a portion of his salary to the Treasury. Neither did Adam Jentleson and Jose Parra, spokesmen for Senator Harry Reid, the Nevada Democrat who is Senate majority leader.

To contact the reporter on this story: Kathleen Miller in Washington at kmiller01@bloomberg.net

To contact the editors responsible for this story: Larry Liebert at lliebert@bloomberg.net; Stephanie Stoughton at sstoughton@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.