Public Unions Urge Private Pay Cuts
The National Defense Authorization Act for Fiscal Year 2013 has been passed by the House and reported out of committee in the Senate. In an October 18 letter, a group of ten public employee unions and public interest groups pushed for the Senate to amend the bill to lower the maximum amount that the Department of Defense can pay for contractor compensation. The amount is currently $763,029 and the proposal would reduce it to $230,700, a seventy percent reduction.
The arguments made for the proposal include
- The rapid increase in contractor compensation levels, well beyond the rate of inflation
- the actual salaries of the President, the Secretary of Defense and other officials that oversee Federal departments and agencies are much lower than the current contractor compensation limit
- the small increases in pay given military personnel versus the large increases in contractor compensation
- potential savings to DoD of $5 billion, nine percent of the total mandated budget cuts for DoD
The Project on Government Oversight suggests that the budget savings could be much more.
The amendment would not prevent contractors from paying their employees whatever salary they choose. It would limit the amount of compensation that could be reimbursed under DoD contracts.
The Professional Services Council, a spokesman for DoD contractors, opposes the change. The PSC states that such limits restrict a contractor’s ability to hire and retain the most qualified candidates. Particular note is made of the hiring needs in the cyber security field.
The Washington Post adds some details to the reasons for the letter. Compensation for federal employees has been frozen for two years while the contractor compensation cap has been increasing. The interest in the amendment by the public employee unions is natural.
This entry was posted on Friday, October 26th, 2012 at 3:26 pm and is filed under American Economy, Politics, American Politics, Military, Original writing, Original writing, Reporting. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
