Trump Cancels Pay Raise for Federal Workers, Citing ‘Serious Economic Conditions’

August 30, 2018, 11:50 PM UTC

President Donald Trump said he’s canceling pay raises for most federal workers that were to take effect in January, citing “serious economic conditions” and the strain that the raises would place on the federal budget.

The move would undo a planned raise for most federal workers, including a 2.1% across-the-board increase as well as raises that account for higher costs of living in cities like San Francisco, New York, and Washington, D.C. The pay raises were intended to help federal salaries keep pace with inflation. Consumer prices have risen 2.9% in the 12 months through June.

In a letter informing Congress of the canceled raises, Trump said the raises would cost $25 billion. “We must maintain efforts to put our Nation on a fiscally sustainable course, and Federal agency budgets cannot sustain such increases,” Trump said in the letter. “Accordingly, I have determined that it is appropriate to exercise my authority to set alternative across-the-board and locality pay adjustments for 2019.”

Average salary for workers varies by location. Federal workers in Wyoming receive an average salary of $63,000, for example, while those in Washington, D.C, earn an average of $116,000 annually. In April, the Federal Salary Council reported that the overall salaries of federal workers lags the salaries of similar workers in the private sector by about 32%.

“The cost of employing the Federal workforce is significant,” Trump wrote. “In light of our Nation’s fiscal situation, Federal employee pay must be performance-based, and aligned strategically toward recruiting, retaining, and rewarding high-performing Federal employees and those with critical skill sets.”

News of the canceled raises drew a fast response from critics of the move.

In December, Trump signed a tax reform bill that is forecast to expand the U.S. deficit by about $1.5 trillion over 10 years. The president has often touted the strength of the U.S. economy on Twitter. In June, he boasted of presiding over what he called the “Best Economy & Jobs EVER.” On Wednesday, the Commerce Department revised the U.S. GDP growth rate slightly upward to 4.2% from the previous estimate of 4.1%.