Taypayer Handouts and Ripoffs

Boehner, GOP Seize on Private-public Pay Gap as a Midterm Election Issue

August 26, 2010

The Hill - Federal workers have become a new flashpoint in the fight between Republicans and Democrats on the economy.

House GOP Leader John Boehner (Ohio) this week blamed Democratic policies for exacerbating a gap in the pay between public and private workers that he claims was rising even as the country suffers through a housing crisis and high unemployment.

House and Senate Republicans already have offered legislation to freeze the salaries of the TWO million federal employees through amendments to economic stimulus bills being ushered through Congress by Democrats. Each effort has failed due to opposition from Democrats.

In criticizing federal pay, Republicans appear to be seizing on rising anti-Washington sentiment magnified by the struggling economy.

The nation’s unemployment rate stands at 9.5 percent, and the housing crisis shows no signs of abating. Both parties are unpopular with voters, reflecting the dim view of what goes on in Washington.

The Beltway has been hit by the recession as well, but an increase in government spending has benefited the Washington region. For example, while existing home sales in July posted a 27 percent drop from June, home price gains in Washington from a year ago were among the highest in the country.

“We’ve seen not just more government jobs, but better-paying ones too,” Boehner told the City Club of Cleveland on Tuesday in what was billed as a major speech on economic policy.

“It’s just nonsense to think that taxpayers are subsidizing the fattened salaries and pensions of federal bureaucrats who are out there right now making it harder to create private sector jobs,” he added.

Boehner and House Republicans have backed up the rhetoric with legislative proposals.

Democrats representing the Washington area were unhappy with Boehner’s remarks and accused the Republican of demonizing federal workers.

“These are people who are working in the public interest, and who serve the very public we represent,” Rep. Gerry Connolly (D-Va.) said in an e-mail to The Hill. “Shame on John Boehner for yielding to that temptation for short-term political gain at long-term cost political cost.”

In attacking the federal workforce, Boehner and other Republicans have argued Democrats are out of touch with the country. The GOP in August fought against a $26 billion state aid package that Democrats said would help state governments retain teachers, police officers and firemen, and in Boehner’s address, he mentioned the package as an example of Democrats’ wasteful spending.

Efforts to scale back the salaries of state workers and the size of the state workforce have picked up traction in some areas, notably New Jersey, where Republican Gov. Chris Christie has scored political points by limiting the salaries for employees of the Garden State.

In his comments Tuesday, Boehner struck a populist tone in arguing that federal workers have become an elite interest group protected by Democrats.

“Federal employees now make on average more than double what private sector workers take in,” Boehner said in Tuesday’s address.

“More appalling is the fact that this gap more than doubled in President Obama’s first year in office — during a time when millions of private sector workers either lost their jobs or agreed to take pay cuts just to keep the one they have.”

Democrats argue it is Boehner that is out of touch and have tried to capitalize on the GOP leader’s support for extending all of the Bush tax cuts, including those on the highest tax brackets.

“It’s unfortunate that, as Republican Leader Boehner advocated for a return to Bush economic policies, he also took the time to attack civil servants," said Doug Thornell, spokesman for Rep. Chris Van Hollen (D-Md.). “Federal workers — many of whom live in Maryland's Eighth District — make up an incredible workforce serving the American people. Attacking them, while advocating for a tax cut for the wealthiest 2 percent of people in country, is partisanship at it’s very worst.”

Both Connolly and Thornell also noted that, as a member of Congress, Boehner is technically a federal employee himself.

“Last time I checked he makes $193,400," Connolly said. “That's more than most federal employees. So a little respect for the people who serve our public is in order.”

“If Leader Boehner is concerned about cutting the salaries of government employees, maybe he should start with his own,” Thornell said.

While most Democrats were eager to pounce on Boehner's speech, and Democrats with large constituencies of federal employees took additional issue with the House Republican Leader's gripe with the federal workforce, the unions representing that workforce have so far remained out of the fray.

American Federation of Government Employees, the National Federation of Federal Employees and National Treasury Employees Union — who combined represent upwards of one million federal workers — all declined to comment after being reached to discuss Boehner's remarks.

Want to Get Rich? Work for Feds

April 29, 2010

Data shows the pay gap between state and local government and private sector workers. (Chris Edwards/Cato Institute)

Washington Examiner - For decades, public sector unions have peddled the fantasy that government employees were paid less than their counterparts in the private sector. In fact, the pay disparity is the other way around. Government workers, especially at the federal level, make salaries that are scandalously higher than those paid to private sector workers. And let's not forget private sector workers not only have to be sufficiently productive to earn their paychecks, they also must pay the taxes that support the more generous jobs in the public sector.

Data compiled by the Commerce Department's Bureau of Economic Analysis reveals the extent of the pay gap between federal and private workers. As of 2008, the average federal salary was $119,982, compared with $59,909 for the average private sector employee. In other words, the average federal bureaucrat makes twice as much as the average working taxpayer. Add the value of benefits like health care and pensions, and the gap grows even bigger. The average federal employee's benefits add $40,785 to his annual total compensation, whereas the average working taxpayer's benefits increase his total compensation by only $9,881. In other words, federal workers are paid on average salaries that are twice as generous as those in the private sector, and they receive benefits that are four times greater.

The situation is the same when state and local government compensation data is compared with that of the private sector. As the Cato Institute's Chris Edwards notes in the current issue of the Cato Journal,

"The public sector pay advantage is most pronounced in benefits. Bureau of Economic Analysis data show that average compensation in the private sector was $59,909 in 2008, including $50,028 in wages and $9,881 in benefits. Average compensation in the public sector was $67,812, including $52,051 in wages and $15,761 in benefits."

Those figures likely underestimate the true gap on the benefits side because the typical government employee gets a guaranteed defined benefit pension under very generous terms, while the private sector norm is a 401(K) defined contribution plan that is subject to the ups and downs of the economy.

With the federal deficit and national debt heading into the stratosphere, taxpayers can no longer afford to support such lucrative government compensation. Public sector pay and benefits at all levels should be reduced to make it comparable to the wages and benefits earned by the average working taxpayer. The first politician to propose a five-year plan for this purpose is likely to be cheered mightily by taxpayers.!