Budget chief won’t rule out more proposals affecting feds

Federal employees could be called upon to sacrifice further in the name of deficit reduction, according to a top Obama administration official.

Office of Management and Budget Director Jack Lew did not rule out the possibility of more proposals affecting government employees during budget negotiations. "I can't say nothing else will happen regarding the federal workforce," he said during remarks Tuesday at the nonprofit Partnership for Public Service. Lew was speaking to agency managers about the current fiscal environment. The Partnership and the consultancy Booz Allen Hamilton released budget reduction recommendations and strategies for the administration and Congress based on lessons learned from the Clinton-era reinventing government initiative and massive downsizing at agencies during the 1990s.

Last week, President Obama released a deficit reduction proposal that recommends increasing the amount that federal employees contribute to their pensions by 1.2 percent over three years beginning in 2013 -- a rate of 0.4 percent annually during that time. Civilian federal employees are under a two-year pay freeze through 2012, and several lawmakers have introduced legislation that targets government pay and benefits.

Lew called the president's proposal to raise employees' pension contribution rates "measured." He also emphasized that the administration will continue to seek budget savings while maintaining a strong federal workforce and delivering the best services possible to taxpayers.

"Federal workers are at the heart of what we do, and I think they deserve a lot of gratitude for what they do, and that's not always what they get," he said.

The budget director said federal employees often understand the need for sacrifice when it comes to belt-tightening, but attacks on their work ethic lower morale and make the burden especially hard to bear.

Lew said the administration wants to give senior leaders the flexibility to make strategic cuts during the upcoming budget cycles to come up with a package that is right for their agencies. He said he envisions OMB providing more counsel and less direction to agencies as they go through the difficult task of crafting leaner budgets. This will place a burden on agency leaders, Lew acknowledged.