Donald Trump on Thursday announced that he would cancel a scheduled 2.1 percent across-the-board pay increase for federal workers, as well as locality pay increases.
“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,” Trump wrote in a letter to the Speaker of the House and the President of the Senate.
Trump’s 2019 budget proposal sought to freeze federal pay, but the Senate Appropriations Committee included a pay bump in its spending plans for 2019. The House version of the bill did not include such an increase, and sought reductions to spending on federal pension plans.
In the letter, Trump said a 25.7-percent pay raise for localities, as well as a 2.1-percent pay increase for across-the-board pay, both scheduled for January 2019, would add billions to the federal deficit. Specifically, he pointed to the scheduled locality pay raise as costing $25 billion.
“We must maintain efforts to put our Nation on a fiscally sustainable course, and Federal agency budgets cannot sustain such increases,” Trump wrote in the letter.
The federal deficit has exploded under Trump, with the advent of the GOP tax law that is projected to cost $1.9 trillion over the course of a decade, as well as a bipartisan spending deal that increased discretionary spending by nearly $300 billion in 2018 and 2019.
The move comes just nine months after Trump signed his $1.5-trillion tax cut bill into law and five months after he signed a mammoth $1.3-trillion spending bill.
Democrats and other critics of the tax cut bill attacked it as a gift to corporations and the wealthy, with little to help average Americans.
The combined effect of both bills is expected to send the government’s budget deficit toward the $1 trillion mark next year, according to an analysis by the Congressional Budget Office. Deficits would grow to $1.5 trillion by 2028, the report projected, and could exceed $2 trillion if the tax cuts are fully extended and if Washington doesn’t cut spending.