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It looks like the federal government is finally getting serious about balancing the budget. In a shocking move, the federal government has chosen to freeze the pay of all civilian government workers. The average federal worker received a pay raise of just below 2% over the past year. Why is the government doing this?

The government is imposing a 2-year freeze on all federal worker salaries in an effort to get the deficit under control. According to the Associated Press, the move will result in “$5 billion in savings over two years, $28 billion over five years and more than $60 billion over 10 years.”

The amount may appear small but every bit of money counts when you are trying to make a dent in a $1 trillion dollar deficit.

Here are the next steps that Congress should take before January of 2011.

Congressional Pay Freeze

This is a good first step towards getting the government’s financial house in order. Next, the members of Congress need to undergo a permanent 2-year pay freeze as well. The average house member is currently paid $174,000 per year. Most of them don’t rely on the money anyway as more than half of the members of Congress are millionaires. Congress should pass a law stating that no member of Congress can get a cost of living adjustment until the unemployment rate is back below 7%.

Defense Spending Freeze

I am not saying to cut defense spending just yet, but we should freeze defense spending at its current level. A 2-year freeze on defense spending will force the Department of Defense to become more efficient. The Defense Department has a reputation for wasteful spending and was unable to account for over $1 trillion dollars in expenditures just a few years ago. Contractors consistently overbill the government for items that could be purchased far cheaper from other companies.

Final Thoughts

I really don’t see how the federal government will be able to extend tax cuts for millionaires when they are asking ordinary citizens to take pay freezes. They would be crucified in the media if they did.

Congress needs to leave military pay alone. People that serve in the military are already severely underpaid so it is best to not freeze their already depressed wages.

Disclosure: None

Source: Federal Worker Pay Freeze: Government Finally Getting Tough on the Deficit?