Wednesday, January 14, 2009

Who is exempt from concessions and cutbacks?

This morning I was listening to the Wall Street Journal's morning program on NewsTalk 1370 WSPD and they were talking about some of the cutbacks private industry is making when it comes to employees and benefits.

They mentioned the lack of pay raises, the elimination of bonuses, the decrease in or elimination of pension contributions, charging employees more of their health care costs, and the elimination of direct or matching charitable contributions.

My husband then wondered aloud why it was that government wasn't taking a cue from these private businesses and making similar cuts. My response was that our local governments were endeavoring to do just that, and that Gov. Ted Strickland had ordered many cuts.

But he was referring to the federal government. And I realized that we've not heard a single news story about the federal government doing any of the things that local and state governments are having to do. In fact, we find the federal government increasing spending (bailouts and loans) and considering requests by states to make up their shortfalls.

So I'm wondering - what is the benefit plan for federal employees? Do they pay a portion of the costs for their medical coverage? Have federal unions been asked to make concessions like our local city unions? Are there opportunities for reducing the cost of the federal government by evaluating and tying federal employee total compensation to the marketplace?

If you know, please share the information or provide links. I can't help but believe that there are things the federal government can and should do in this regard.


Unknown said...

Great questions, I hope you get some answers as I'd also be interested in learning if the federal government is even attempting to do what the business world and some governments are trying to do.

Frank said...

Hi Maggie,
I did write to Senator Sherrod Brown about the payraise that Congress recieved at the beginning of this year and here is his reply:

Dear Mr. Tremblay:

Thank you for getting in touch with me about the Cost of Living Adjustment (COLA) for congressional salaries.

Under the Ethics Reform Act of 1989, members of Congress automatically receive a COLA each year unless Congress votes to prevent such an increase. For 2009, the projected increase is 2.8%, which amounts to $4700.

Congress should not be getting a raise in these difficult economic times. That’s why I am donating my COLA to charity. Half will be donated to Ohio food banks and the other half to Ohio free clinics.

Thank you again for writing.

Sherrod Brown

Of course, he did dodge my question of why Congress did not take pay cuts and other things that Congress demanded the CEO's of the Big 3 do in order to get their money. I wonder if there is any other way to force a pay cut other than voting them out in the next election.

Maggie said...

Frank - I guess a follow up question for Sen. Brown would be this: When will you introduce legislation to eliminate the automatic pay increases since you don't believe in them?

THAT'S the question I'd like him to answer.

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