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Deficit Commission’s Strong Medicine: Federal Pay Freezes, Contractor Cuts

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The co-chairmen of President Barack Obama’s deficit commission announced extensive cuts to a variety of programs as part of the panel’s mission to find ways to balance the budget and improve the nation’s economic outlook.

Former Clinton White House Chief of Staff Erskine Bowles and former Senate Republican Whip Alan K. Simpson (R-WY) released Nov. 10 their nonbinding plan, which calls for cutbacks to Medicare, Social Security and certain tax breaks.

Also of note is a three-year pay freeze for most federal employees, as well as a 10 percent cut in the federal workforce.

According to Government Executive, the plans for the federal workforce include: keeping salaries and bonuses level for three years, decreasing the civilian workforce by 10 percent or 200,000 employees in 10 years’ time by hiring two workers for every three who leave, and restricting the maximum number of political appointees to 2,000.

Other recommendations include:

  • White House and Congressional budget reductions of 15 percent
  • Eliminating 250,000 nondefense service contractors
  • Reducing federal travel and printing, as well limiting use of federal vehicles

As for defense, the commission recommends applying the cost savings from Defense Secretary Robert M. Gates efficiency initiatives to deficit reduction, rather than new weapons systems.

Wired’s Danger Room blog reports the deficit commission’s recommendations go much further than Gates’ recent efficiency initiatives. His plan would free up about $100 billion over five years to be put back into weapons systems. But Bowles and Simpson want to use the money freed up by DoD for deficit reduction instead.

According to DoDBuzz, the head of the Aerospace Industries Association expressed “grave concerns” about the panel’s recommendations, which include canceling the Marine V-22 Osprey helicopter, F-35B and the Expeditionary Fighting Vehicle.

Erskine and Simpson also call for keeping noncombat military pay at 2011 levels for three years, as well as doubling planned cuts to defense contracting.

The commission’s proposals are sure to spark conversation, but there will be one important voice not chiming in, at least for now.

White House spokesman Bill Burton emphasized the plan “was only a step in the process,” and said Obama would not immediately weigh in.

“The president will wait until the bipartisan fiscal commission finishes it work before commenting,” he said.

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