CQ TODAY ONLINE NEWS
Corrected Feb. 28, 2012 – 3:54 p.m.

Sen. Paul Looks to Tweak Bill on Pay Freeze for Federal Workers

Conservative Republican Sen. Rand Paul wants to alter the current federal salary freeze to give bonuses to employees who come up with ways to save the government money.

Thus far, the Kentuckian has met no resistance from fellow Republicans, including those in the House who earlier this month voted for a bill (HR 3835) to extend for another year the pay freeze (PL 111-242) that has been in place for two years and is set to expire at year’s end.

In fact, some pay freeze proponents say Paul’s idea could attract support from some Senate Democrats for extending the freeze. Although federal employee groups have strong ties with the Democrats, the pay freeze supporters note that 72 House Democrats voted for the House bill passed on Feb. 1.

“If there are tweaks we can make to get the Senate on board, I’m all for it,” said Rep. Sean P. Duffy, R-Wis., chief sponsor of the pay freeze extension legislation.

Paul said he is aiming for a compromise that would leave the pay freeze in place but incorporate his proposal (S 2085) to reward employees whose good ideas are shown to shrink federal spending.

Democratic Sen. Mark Begich of Alaska said he is likely to back Paul’s idea, even if he opposes extending the pay freeze. “I did something like that when I was mayor of Anchorage. It motivates employees,” Begich said. “They are on the ground. It’s not just about cost savings. They come up with innovations that create efficiencies.”

Paul’s other likely Democratic targets include Joe Manchin III of West Virginia, who has not yet taken a stand on the House-passed pay freeze extension but has expressed interest in Paul’s proposal. “That’s novel. It sounds interesting,” Manchin said.

The Obama administration has proposed allowing the pay freeze to expire and has called for a very small pay raise, 0.5 percent, for federal civilian employees in fiscal 2013, which begins Oct. 1.

The White House and many Democratic lawmakers contend that the federal workforce has been hit hard enough through a combination of the two-year pay freeze and a provision of the recently enacted payroll tax cut extension (PL 112-96) that requires new federal employees to pay more money into their pension plans.

Paul said bonuses would give federal employees a new incentive to identify cost-saving innovations. “Under current law, agencies are required to spend all of the money they are allocated and have no incentive to identify areas in the budget where savings could be found,” Paul said.

“When this occurs, federal agencies with surplus funds must rush to spend the funds before the end of the fiscal year, often on unnecessary purchases,” he said.

Paul’s proposal would not allow government agencies to spend the money saved through employee-proposed efficiencies, but they would be allowed to pay bonuses of up to $10,000 to those who come up with the ideas.

First posted Feb. 27, 2012 10:04 p.m.

Correction
Corrected to provide the correct bill number (S 2085) for Paul's legislation.