Spending bill freezes agency budgets, employee pay

The House Wednesday evening approved a $1.093 trillion continuing resolution for the rest of fiscal year 2011 that would freeze the pay of federal non-military employees for two years and cap discretionary spending at the fiscal 2010 level.

The measure, approved 212-206, now goes to the Senate, where Democrats are expected to try to replace the CR with an omnibus spending package that would include all 12 annual spending bills. The omnibus would include member-directed funding, or earmarks, while the CR does not include any earmarks.

The House catchall spending measure, introduced Wednesday, caps agencies' operating budgets at $1.1 trillion for fiscal 2011, level with last year's budget. The bill also includes a 1.4 percent pay raise for military personnel but freezes federal civilian salaries for two years, in line with President Obama's proposal last week to hold nonmilitary pay steady for 2011 and 2012. Workers still would be eligible for promotions and step increases.

The legislation does increase funding for veteran and military health care programs, however. The Defense Department would receive an additional $4.9 billion, including $1.56 billion to cover cost increases in its health initiatives. Veterans' programs would see a $3.7 billion boost.

Appropriators also granted agencies the power to transfer funds, with congressional approval, to avoid furloughs or workforce reductions and to support necessary programs. Another provision pushes forward Alaska's and Hawaii's transition to separate locality pay areas as required under the 2009 Non-Foreign Area Retirement Equity Assurance Act.

The Social Security Administration would receive $440 million above its fiscal 2010 budget. The bill adjusts funding to allow the agency to maintain staffing levels necessary to reduce the backlog of benefits applications and pending appeals.

Union leaders expressed frustration at the provisions included in the bill.

"While federal employees are mindful of the difficult economic challenges facing our country and willing to do their part to address it, it is wrong to single out this one group for sacrifice, particularly when the nation's wealthiest will apparently be receiving a deficit-exploding tax cut," National Treasury Employees Union President Colleen Kelley said.

American Federation of Government Employees National President John Gage called the proposal arbitrary and foolish.

"This really puts federal employees between a rock and a hard place," he said. "Agencies can't operate at all without a budget, but the spending freezes in this bill will make it even harder for employees to get their jobs done."

Senate lawmakers are working on a separate measure that provides additional funding. According to an Associated Press report, the House could take up the proposal on Wednesday. Congress has not approved any individual appropriations bills for fiscal 2011.