This article looks at the current and past debt ceiling debacles and potential impacts to everyday Americans Basically if the debt ceiling (currently $31.4 trillion) is not raised, the government would not be able to borrow more money to pay its bills, which could lead to a default on its …
This article provides the latest updates and news on General Schedule (GS) changes, including forecasted changes based on White House and Congress plans. The GS pay scale provides annual base pay or salary scales, in addition to locality pay adjustments, for civilian federal employees and related groups. You can see …
As I was writing this article I re-read my original pieces on the 2011 debt ceiling debate/deal and got a major sense of deja-vu. After 18 months we are back in the same place with a dysfunctional Congress, who barely passed legislation to avert the fiscal cliff, trying to reach a new deal to keep the …
The Washington Post had two graphics that neatly summarize the impacts from the fiscal cliff. This is the number one topic in the world of finance and almost all Americans will be impacted by the potential fallout in some fashion. My opinion is that Congressional Republicans and the Obama administration will reach some form …
[Updated for 2016] – The Home Affordable Refinance Program (HARP) has been extended to the end of 2016. Under this program home owners may be able to reduce their mortgage payments by as much as $3,500 each year. The program benefits those with little to no equity in their home homes (LTV>80%) and are struggling …
[Update as of July 23rd] It’s time to pay for the American dream. In various discussions around how to cut the national debt, so that we don’t have to keep raising the debt ceiling, one theme that is common in most plans is that Americans now and for generations to …
Updated Nov. 2015] With the President taking executive action on immigration policy, Republicans are vowing to stop him by defunding public agencies that could implement this executive action. House Speaker, John Boehner said he is still reviewing options but has not ruled out yet another government shut down. But the clock is ticking with government …
See this updated article for the latest GS Adjustments and Locality Pay Scale Tables. ______________________ [2013 Locality Pay Rates Update] The president has signed an executive order that freezes GS pay rises in 2013. Unfortunately the executive order and existing continuing resolution also stated that, “…….. locality payments in 2013 for …
I have made a number of updates to popular topics on this site and in case you missed them, here is a quick recap with a link to the detailed information. 2011 Tax Rates and Brackets Following Bush-era Tax Cut Extensions With approval of a two-year extension to all the …
To tackle America’s growing national debt problem, President Obama put together a task force earlier this year to look at options on how to cut government spending, implement tax reform and improve the effectiveness of federal entitlement programs. The deficit reduction commissionco-chairs (Erskine Bowles and Alan Simpson) put forward a $3.8 trillion deficit-cutting draft plan that calls for discretionary spending to be cut by $1.4 trillion over 10 years, while mandatory spending – including Social Security, Medicare and Medicaid – would be reduced by $733 billion. Taxes would be raised by $751 billion. More specifically:
[Updated : 2012 Pay Tables] Following President Obama’s Federal employee pay freeze, 2011 and 2012GS tables will remain the same as 2010. This includes the special base rates for GS law enforcement officers (GL) at GS grades 3 through 10. Unfortunately this means that the proposed raises discussed in previous updates below will not come to pass in 2011 or 2012, despite COLA increases for other federal benefits. The 2011 and 2012 GS Pay scale is shown below, with rates effective from January 1st:
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[Dec 2010 – Update on 2011 Federal Pay Raise] In an effort to address growing budget deficit concerns and political pressure, President Obama announced a proposal to freeze federal pay increases. This was against the expected 1.4% raise discussed in the previous update below . This freeze would affect over two million federal government employees, and with inflation set to rise over the next few years the pay freeze essentially amounts to a pay cut for the next two years in real terms.
The freeze applies to all federal workers, including civilian Defense Department employees, but does not apply to military personnel, government contractors, postal workers, members of Congress, Congressional staffers, or federal court judges and workers. The 2011 pay freeze would take effect on Jan. 1, pending Congressional approval by the end of this year. 2012 pay freezes will be proposed as part of fiscal 2012 budget proposals to be unveiled early next year.
“Getting this deficit under control is going to require some broad sacrifices and that sacrifice must be shared by the employees of the federal government,” Obama said in a speech announcing the pay freeze. He added, “I did not reach this decision easily, this is not a line item on a federal ledger, these are people’s lives……Federal employees are hard-working and dedicated and essential to delivering services to the American people. Today [I am] clearly asking them to make a sacrifice.”
USA Today reported this month that the number of federal workers earning $150,000 or more has doubled since Obama took office, fueling public and political outrage over what federal workers are paid
“A federal pay freeze saves peanuts at best,” John Gage, president of the American Federation of Government Employees, said “The American people didn’t vote to stick it to a Veterans Administration nursing assistant making $28,000 a year or a border patrol agent earning $34,000 per year.”
The pay freeze will not impact bonuses for federal workers or when a federal worker is promoted to a new level of pay, meaning federal workers promoted in the next two years will receive a new level of pay, but not receive any additional annual raises. The decision is expected to save the government about $2 billion for the remainder of fiscal year 2011 and $28 billion over the next five years, the White House said. Federal civil service pay rose 2 percent in 2010 after rising 3.9 percent in 2009 and by 3.5 percent in 2008.
The long-term savings and budget reduction come from lowering the government’s base compensation over the next two years. The administration already has ordered a three-year freeze in non-defense and national security programs in Obama’s budget released Feb. 1, and ordered some agencies to reduce their 2012 budget requests by 5 percent.
The government is projected to spend $457 billion on personnel costs in the 2011 fiscal year, according to the Congressional Research Service. That’s up from $447 billion spent in 2010. Obama made the announcement Monday because Tuesday is the deadline to set federal locality pay, or variations the government makes in pay and benefits based on geographic location.
House Majority Leader Steny Hoyer (D-Md.), whose district is home to thousands of federal workers, said he was pleased Obama instituted only a two-year freeze instead of the three years proposed by the Deficit Commission. But Obama also should have cut pay for some military personnel, Hoyer said in a statement. Obama has already frozen the salaries of top White House officials and top political appointees. But freezing the salaries of all civilian workers is a much bolder step that will result in a big economic hit to the Washington region, which is home to more than 600,000 federal workers and their families.
Republican lawmakers, who support the pay freeze, have already introduced several proposals to cut federal pay and benefits and curtail the size of the federal workforce, including cuts to the government payroll through attrition or firing federal workers who fail to pay taxes.
I will continue to provide updates and the latest federal pay tables as new information is made available. I encourage you to subscribe (free) via Email or RSS to get the latest information.
[Previous Update] How much do federal employees get paid and what will be their congressionally mandated pay raise this year? The answer to this question directly affects millions of federally employed Americans and their families, who are paid based on the General or Executive Schedule. The more common General schedule (GS) has 15 grades and 10 steps in each grade, and covers more than 400 occupations. Earlier this year, the Senate Appropriations Committee passed the Fiscal 2011 Financial Services and General Government spending bill which included a 1.4% 2011 pay raise. This is lower than the 2% raise in 2010, primarily due to the struggling economy and low inflation environment.
Mortgage interest rates are at their lowest point in decades (about 4.5%) and the housing credit has been in effect for more than three years, yet the housing market is tepid at best, with foreclosures at record highs and government housing institutions having to put more distressed assets on their books. This has spurred rumors around the web that the Obama administration (via the Treasury) will soon be asking government owned entities Fannie Mae and Freddie Mac to expand their “save the economy” effort by reducing the principal balances for those individuals struggling to pay their mortgage payments. Keep in mind that the President does not need congressional approval for this change because 1) the government already “owns” Fannie and Freddie and 2) the Treasury has removed the previous limits on the amount of money the organizations can tap into (it was $400 Billion, now – no limit).
Unlike most rumors, this one became more, not less, plausible when you examine the details. The White House has made it clear in recent months that it is frustrated by what the Framers called “the legislative branch,” what President Obama calls “politics” and what I call “the wishes of the American people.” Obama craves a short-term sugar rush for the economy. If he feels cornered, betrayed and alone, he could use his new ownership of Fannie Mae and Freddie Mac as a free federal candy store and tell America to line up and pig out. In more ways than one, Barack Obama seems to want to be known as the Sub-Prime President. (source : New York Post)
While this plan may help a handful of borrowers on the edge of foreclosure, there are many more fundamental problems with reducing the principal home loan balances which include:
I’ve been reading a lot about the future tax implications given the large amounts of government spending and contracting corporate and consumer tax base. All this means is that tax considerations should play a much more central role in people’s thinking as they’re making critical financial decisions. At the end …