OMB chief calls reports federal employees are overpaid ‘misleading’

Reports that federal employees are overpaid relative to their private sector counterparts are "misleading," Office of Management and Budget Director Peter R. Orszag said Tuesday.

Speaking at a Government Executive Leadership Briefing, Orszag addressed recent media reports showing that for certain occupations, average salaries are higher in the federal government than in the private sector.

"I think the key thing to remember about that is the federal workforce is more highly educated than the private workforce," Orszag said. "Roughly a third of the private workforce has a college degree, for example, [while] well over 50 percent of the federal workforce [does]."

Orszag also noted that "as people gain more experience, pay tends to increase," and the federal government has a highly experienced workforce. "Basically the entire delta between private sector and public sector federal government average pay can be explained by education and experience," he said.

"While there may be some remaining disparities," Orszag added, "I think some of the more dramatic newspaper stories I've seen about that disparity are somewhat misleading."

Orszag said Obama administration officials considered freezing federal pay in the fiscal 2011 budget proposal, but ultimately decided against the idea.