One day after President Biden proposed raising taxes on high-earning Americans to keep Medicare afloat, the Washington Post reports that Biden is now expected to float a 5.2 percent pay raise for federal employees, the largest salary boost since Jimmy Carter was president.
The raise, which would apply to 2.1 million workers, would go into effect in January as part of Biden's fiscal year budget that starts Oct. 1, according to an anonymous senior federal official. It would be the largest since Jimmy Carter's 9.1 percent increase in 1980, but would still fall short of the 8.7 percent raise called for by Congressional Democrats and federal employee unions.
"President Biden is continuing to ensure that federal workers’ pay and benefits are insulated from the price-tag of inflation, but it will be paid for by American taxpayers who continue to be harmed by the Biden Administration’s inflationary policies," said House Oversight Committee Chairman James Comer (R-KY) in a statement.
"We should be putting American taxpayers first, not the federal bureaucracy."
Unions want more
The federal government's largest unions say Biden's proposal falls short, and say their members should receive an even larger increase.
"While we recognize the significance of this pay raise, more must be done to keep up with inflation and to begin to make serious progress in closing the double-digit pay gap between federal employees and their private sector counterparts," said Everett Kelley, national president of the American Federation of Government Employees which represents 750,000 federal and D.C. employees.
Kelley says Congress should pass legislation for an 8.7 percent raise.
National Treasury Employees Union president Tony Reardon called the proposal a "solid first step" in the upcoming budget debate on Capitol Hill over the debt ceiling, but that the 8.7% increase would track the 2023 cost-of-living increases received by Social Security recipients.
"We believe rising costs and previous years of inadequate pay increases warrant the average 8.7 percent adjustment called for in the FAIR Act," said Reardon, referring to the Federal Adjustment of Income Rates Act.
Biden’s recommendation for the notably large pay boost underscores his administration’s tight partnership with federal employee unions, who can bargain over working conditions but not wages, which are set by Congress. The unions have enjoyed significant clout in his administration, in contrast with the Trump administration, which often clashed with civil servants and their representatives. -WaPo
On Tuesday we noted that Biden proposed raising taxes on Americans earning more than $400,000 per year as he seeks to shore up entitlement programs and address budget deficits.
Biden's budget, set for release on Thursday, proposes raising Medicare taxes from 3.8% to 5% for those making above $400,000, and would eliminate a loophole used by business owners and high-earners to avoid additional taxes, according to a White House fact sheet.
Biden is also expected to propose specific measures to reduce the deficit by at least $2 trillion over a decade, Bloomberg reports.
Republicans are certain to seize on whatever his budget proposes as deficit spending in the coming 2024 fiscal year to accuse the White House of gimmickry. Senator Chuck Grassley, the top budget committee Republican, said before the release that the president should propose to cut 2024 spending to 2020 levels plus inflation.
Republicans say they will seek at least $150 billion in fiscal 2024 reductions, with the ultimate goal of eliminating budget deficits over 10 years — all without touching Social Security or Medicare. The Biden budget increases pressure for Republicans to detail their plans, and spell out what government services they would slash. -Bloomberg
According to the Biden team, their plan will protect Social Security - which, without intervention, is predicted to be insolvent by 2033 per the latest official estimate.
And of course, Biden's budget is not expected to outline the next tranche of assistance to Ukraine.