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Bush’s War on Wages

by CHRISTOPHER BRAUCHLI

There is no way of keeping profits up but by keeping wages down.

David Ricardo,
On Protection to Agriculture (1820)

It sort of depends on who you are. It also comports with the trend that the rich get richer and the poor get-but I repeat myself. But then, so does the administration. The latest example is in the world of pay raises. We all like them. We don’t all get them. It is not unusual to learn that those who need them least get the most and those who need them most get the least. The most recent example was announced the end of August. Mr. Bush sent a letter to congressional leaders saying that in the interest of the national welfare, he planned to cut the pay raises for federal civilian workers that were slated to take effect in January 2004. In a letter to congressional leaders President Bush said he was authorized to do this in times of national emergency or serious economic conditions. He said he was using his authority to limit raises to 2 percent.

Prior to Mr. Bush’s announcement federal employees (other than members of Congress and the military) were to receive a 2.7 percent across-the-board pay raise together with an increase in some locales based on private sector wages. Approximately 1.2 million of the 1.8 million civilian federal work force will be affected by the change. By not receiving their pay raises the affected employees are helping Mr. Bush cut about $11 billion from the proposed budget, a sum guaranteed to make even the least patriotic employee swell with a bit of pride that will replace the slight bulge the employee’s wallet will forego. Under Mr. Bush’s proposal the across-the-board raises will be limited to 1.5 percent and .5 percent for the locality pay.

For obvious reasons, the military will not forego pay raises. Mr. Bush has proposed that they receive an increase of 4.1 percent. For less obvious reasons, political appointees (known in some circles as political hacks) will not be asked to forego any of their compensation. During the Clinton years, a period when we are often reminded by the political right, morality in politics was at an all time low, then President Clinton ended the practice of paying cash bonuses to political appointees working in federal agencies. Mr. Clinton probably thought that smacked of cronyism and hurt morale among career employees. He ended the practice shortly after the first President Bush left office, who, in his final days, had rewarded political appointees with $400,000 in bonuses that were not paid to career employees.

The political appointees got their appointments because they were wealthy and could make large contributions to Mr. Bush when he was seeking the presidency. Mr. Bush, in turn, showed his gratitude by giving them government jobs for which they might or might not be qualified and paying them bonuses to make it all worthwhile. The recipients did not need the bonuses but it was the thought that counted and a lovely way for Mr. Bush to thank his cronies for their good work in his behalf. Career employees who had done nothing to deserve bonuses other than perform their jobs understood, and did not resent, even for a moment, the fact that this occurred. Early in his administration Mr. Bush realized that such rewards were necessary and reinstated the practice that had been followed by his father.

Also unaffected by the belt tightening are members of Congress. As of this writing, it is not clear Mr. Bush’s frugality on behalf of career employees, will carry the day. Members of Congress have provided annual pay raises for themselves in the bill that is now in the legislative process. If the legislation is approved by both houses and signed by the president, salaries for members of Congress will go from $154,700 to $158,000. That represents a modest 2.2 percent raise in pay. Under the house bill, civilian employees would receive a 4.1 percent raise in pay, notwithstanding the president’s desire to let them participate in the patriotic exercise of receiving a much more modest raise. If the congressional raise goes through, it will be the fifth straight year that members of Congress have included themselves in the bill that authorizes pay raises for federal employees. From 1993 to 1997, members of Congress did not give themselves raises which meant their salaries were stuck at the dismally low level of $133,600, a sum all but the poorest in this country would disdain. The salaries that are now paid to members of Congress place them among the top 5 percent of the people living in this country in terms of pay.

It is too early to say how this will all end since the bill must go from the House to the Senate and then to the president. One can say with complete confidence that the bonuses for political hacks will be retained irrespective of what happens to career employees. One can say with complete confidence that the pay raise for the military will be left intact and Congressional pay raises will take effect as proposed in the House bill. The only pay raises in doubt are those for the civilian employees. Whether the Senate and the House will award them the raises in the current legislation or cave in to Mr. Bush’s demands that those employees be permitted to help finance the war on terror only time will tell. They would be wise to not spend their anticipated raises just yet.

CHRISTOPHER BRAUCHLI is a Boulder, Colorado lawyer. He can be reached at: brauchli.56@post.harvard.edu

 

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