With economy stumbling, Obama hails auto industry bailout
Washington Post Staff Writers
Tuesday, November 30, 2010; 12:46 AM
President Obama on Monday announced a two-year pay freeze for most of the 1.9 million civilians who work for the federal government, as he tried to address concerns over a mushrooming deficit and placate Republicans who have targeted the workforce for big cuts.
"Getting this deficit under control is going to require some broad sacrifices, and that sacrifice must be shared by the employees of the federal government," Obama said in a White House speech. He called federal workers "patriots who love their country" and said the cut is not just "a line item on a federal ledger." But he said he is asking federal workers to sacrifice for the country as "they've always done."
The president's proposal comes just before a fiscal commission he appointed is scheduled to issue a final report Wednesday on how to staunch deficit spending. The panel's leadership has recommended a three-year pay freeze for most federal workers.
The freeze, which must be approved by Congress, would be the first two-year halt to federal raises in modern history. With health insurance premiums for civil servants set to jump 7.2 percent on average next year and a federal transit subsidy to be cut by half Dec. 31, the plan will amount to a pay cut for many workers.
But the freeze is a largely symbolic move to address a federal deficit that will top $1 trillion next year. It is estimated to save just $2 billion over the next year.
"You could always count on your increase," said Danielle Swain of Manassas, an analyst for the foreign export service of the Agriculture Department who is nervous about the cut to her commuter-rail subsidy. "If you don't get a bonus, this is all you get. They're picking on the government because they assume we sit around and don't do anything. Well, it's not true."
The last freeze to federal pay came in 1986, and it was for one year. President Bill Clinton proposed skipping the 1994 raise but was rebuffed by Congress.
Obama's proposal would apply to nearly all federal civilian workers, including 600,000 in the Washington area, for 2011 and 2012. Defense Department civilians would be included but uniformed military personnel exempted. The government would save $5 billion over the two years, White House officials said; the savings would grow to $28 billion over five years because future salary increases would be set from a lower base, said Jeffrey Zients, deputy budget director and the government's chief performance officer.
Civil servants still will be eligible for bonuses and promotions to higher pay grades. However, John Berry, the government's personnel chief, said the White House has told federal managers to ensure that bonuses are "truly performance based" amid what he expects to be a declining pool to reward good workers.
Federal employees were scheduled to receive a 1.4 percent across-the-board raise in 2011.
Rochelle Diamond, a program analyst for the Agriculture Department, said that raise would have been insignificant anyway. But on principle, she's mad that Republicans have, in her view, pushed the president to take aim at federal workers. "I look at those Republicans who are forcing his hand, and I think, 'We should be looking at what they make and start there,' " Diamond said.
The move comes amid a festering debate over pay and benefits of federal workers that became an issue on the campaign trail this fall. Congressional Republicans and other critics have said the workforce is being shielded from an economic downturn that has left millions of Americans at private companies facing layoffs and pay cuts.
For months, administration officials and critics have battled over whether federal workers, on average, make more than their private sector counterparts. Government officials defend public-sector pay and say that the way critics have calculated averages is misleading.
Obama froze senior White House officials' pay for a second year and froze all political appointee pay in 2010. Congress voted itself a pay freeze for members in 2011.
Zients said the president announced the salary freeze onMonday ahead of a Tuesday deadline for submitting pay plans to Congress. Obama hopes to avoid a potential fight with the GOP next year on federal pay by promoting the move as a sign of his willingness to work with Republicans, who will take over the House and gain more power in the Senate in January.
The GOP and the leaders of the bipartisan deficit panel have pledged deeper cuts, including furloughs, reductions to bonuses and the size of the workforce, and scaling back retirement pay and the use of contractors.
"It will be hollow if we see a net increase in the federal payroll," Rep. Jason Chaffetz (R-Utah) said of the pay freeze, noting that the government's plans to continue hiring and to hand out bonuses "are not going to reduce the costs to the taxpayers." But Chaffetz, who is slated to head the House subcommittee that oversees federal pay, called the plan "a good start."
White House officials frame the initiative as part of a broader series of moves to reduce the budget deficit. Officials said other strategies, including some that might affect federal workers, would be rolled out when the administration releases its budget proposal next year. "We will evaluate other proposals beyond federal workers, all the different various proposals from the fiscal commission and others, as part of our 2012 budget process and be rolling that out across the next couple of months," Zients said. He called the freeze "the first of many difficult steps ahead."
Federal unions and employee groups criticized Obama, a serious break between organized labor and an administration that has relied heavily its support. Unions cited data from the Bureau of Labor Statistics that suggest the pay gap between federal and private salaries grew last year in favor of the private sector. John Gage, president of the American Federation of Government Employees, called the plan a "superficial, panicked reaction to the deficit commission report."
With rare exceptions, executive branch employees can't bargain over pay. The freeze would not affect Postal Service workers, whose salary is set by contract.
White House officials played down any concern that the proposal would reduce agencies' ability to recruit new talent. "I'm confident . . . that this freeze will not get in the way of our efforts to bring in the best and brightest," Zients said.
Some liberal groups said the freeze won't reduce the deficit or gain Obama the GOP's cooperation. "This is another example of the administration's tendency to bargain with itself rather than Republicans, and in the process reinforces . . . the myth that federal workers are overpaid," said Lawrence Mishel, president of the Economic Policy Institute, a liberal think tank, said.
According to a Washington Post poll last month, 52 percent of Americans say they think federal workers are overpaid, a view held by nearly six in 10 Republicans and about seven in 10 conservatives. Far fewer Democrats, independents, liberals and moderates agreed. Among Americans, one in 10 of those polled say federal workers should be better compensated. Still, of those who have interacted with a federal agency employee, three in four report that the experience was positive.
JUST AS OBAMA ASSAULTED THE LEGALS OF ARIZONA TO EXPAND THE MEX INVASION = NEW LA RAZA DEM VOTERS, AND “CHEAP” LABOR, HE HAS ASSAULTED THE AMERICAN WORKER IN ALL 50 STATES!
OBAMA WORKS FOR WALL ST, HIS BANKSTER DONORS, AND ILLEGALS! ONLY!
These same corporations, as fronted by the U.S. CHAMBER OF COMMERCE, demand amnesty, open borders, and a steady flow of “cheap” labor illegals from Mexico! Americans are handed the bills for pay for their heavy anchor baby breeding, welfare, crime tidal wave, bi-lingual.
Most of the FORTUNE 500 are generous donors to THE MEXICAN FASCIST PARTY of LA RAZA, that demand Mex supremacy!
US corporations squeezing more output from workers and paying lower wages
By Patrick O’Connor
12 August 2009
12 August 2009
US Labor Department data released yesterday showed productivity up 6.4 percent in the second quarter, the largest gain since 2003 and higher than economists’ forecasts of 5.5 percent. Over the same period, workers’ compensation fell sharply.
The Bureau of Labor Statistics explained that productivity—which measures hourly output per employee—increased “due to hours worked declining faster than output.”
In other words, big business is using the rise in unemployment to extract greater output from employed workers through speedup and other forms of intensified exploitation.
Nonfarm productivity rose 6.4 percent as a result of output declining by 1.7 percent and total hours worked plummeting 7.6 percent.
Data also showed that real hourly employee compensation fell by 1.1 percent in the second quarter, or by 2.2 percent on an annualized basis. The combined impact of declining wages and rising productivity brought unit labor costs down by a huge 5.8 percent in the three months from April to June.
In manufacturing, quarterly productivity rose 5.3 percent, a result of output falling by 9.9 percent and hours by 14.4 percent. In the durable manufacturing sub-category, the output and hours decline was even greater—16.5 percent and 19.6 percent respectively.
The recent productivity boost, unlike that seen in previous periods, has involved no developments in productive technique. Mark Vitner of Wells Fargo Bank told Dow Jones Newswire that the second quarter gain “is almost entirely the result of cost-cutting, not improved ways of producing goods and providing services.”
Several commentators frankly admitted that the productivity boost was the product of intensified pressure on the working class. In a comment for Dow Jones’ MarketWatch, Tom Bernis wrote: “Anybody lucky enough to hang onto his or her job in this recession is working flat out to keep it. That’s one take on the latest US productivity numbers...
“The severity of the recession has pushed the hours worked to levels not seen since the mid-1990s, even as units of output have risen nearly 40 percent. So, with the economy essentially in ‘idle,’ it takes far fewer workers to keep things moving than nearly a decade-and-a-half ago. That’s good news for profits, but not so good for the unemployed.”
Ian Shepherdson, chief domestic economist for High Frequency Economics, added: “These are spectacular numbers and help explain why so many recently reporting companies have beaten earnings estimates.”
Bloomberg News highlighted DuPont, the third-biggest US chemical company, which last month announced a better-than-anticipated $417 million second quarter profit. This was achieved after outlining a strategy to cut fixed costs by $1 billion, partly by laying off 2,500 permanent workers and 10,000 contractors. “Our aggressive actions to improve productivity and reduce costs across the company are paying off,” Chief Executive Officer Ellen Kullman declared.
According to Time magazine’s Justin Fox, a recent report by the Goldman Sachs portfolio strategy team compared current corporate profits with previous periods. In an extraordinary finding, the researchers concluded that if financial companies, auto producers and utilities are excluded, corporations in the S&P 500 index had higher profit margins during the worst of the current crisis than they did during any point of the mid-1980s economic boom.
This conclusion points to the class character of the Obama administration and the social interests being served by its policies.
The economic policies advanced by successive Democratic and Republican administrations over the last three decades produced significant productivity increases at the same time that average real wages stagnated or declined. This led to an unprecedented shift in national income distribution, away from wages towards corporate profits, massively increasing social inequality.
These tendencies are accelerating, with the Obama administration, on behalf of the major corporations and banks, advancing a sweeping economic restructuring agenda aimed at permanently driving down workers’ wages and conditions. Every aspect of the administration’s agenda—from the bailout of the banks, to mass layoffs and wage and benefit concessions in the auto industry, to sweeping cuts in health care for workers and retirees—is directed towards protecting the ruling elite’s wealth at the expense of the majority of the population.
Obama sent a clear signal to big business with the restructuring of the auto industry. The federally supervised bankruptcy of General Motors and Chrysler involved the destruction of large sections of each company’s productive capacity, the elimination of tens of thousands of jobs, and the imposition of wages and conditions equivalent to those last experienced in the industry in the 1930s. This set the stage for an economy-wide corporate offensive against jobs, wages, and conditions, the initial results of which are reflected in the latest productivity and labor cost data.
WSWS.ORG… GET ON THEIR FREE NO ADS E-NEWS!
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Obama proposes two-year pay freeze for federal workers
By Lisa Rein and Perry Bacon Jr.Washington Post Staff Writers
Tuesday, November 30, 2010; 12:46 AM
President Obama on Monday announced a two-year pay freeze for most of the 1.9 million civilians who work for the federal government, as he tried to address concerns over a mushrooming deficit and placate Republicans who have targeted the workforce for big cuts.
"Getting this deficit under control is going to require some broad sacrifices, and that sacrifice must be shared by the employees of the federal government," Obama said in a White House speech. He called federal workers "patriots who love their country" and said the cut is not just "a line item on a federal ledger." But he said he is asking federal workers to sacrifice for the country as "they've always done."
The president's proposal comes just before a fiscal commission he appointed is scheduled to issue a final report Wednesday on how to staunch deficit spending. The panel's leadership has recommended a three-year pay freeze for most federal workers.
The freeze, which must be approved by Congress, would be the first two-year halt to federal raises in modern history. With health insurance premiums for civil servants set to jump 7.2 percent on average next year and a federal transit subsidy to be cut by half Dec. 31, the plan will amount to a pay cut for many workers.
But the freeze is a largely symbolic move to address a federal deficit that will top $1 trillion next year. It is estimated to save just $2 billion over the next year.
"You could always count on your increase," said Danielle Swain of Manassas, an analyst for the foreign export service of the Agriculture Department who is nervous about the cut to her commuter-rail subsidy. "If you don't get a bonus, this is all you get. They're picking on the government because they assume we sit around and don't do anything. Well, it's not true."
The last freeze to federal pay came in 1986, and it was for one year. President Bill Clinton proposed skipping the 1994 raise but was rebuffed by Congress.
Obama's proposal would apply to nearly all federal civilian workers, including 600,000 in the Washington area, for 2011 and 2012. Defense Department civilians would be included but uniformed military personnel exempted. The government would save $5 billion over the two years, White House officials said; the savings would grow to $28 billion over five years because future salary increases would be set from a lower base, said Jeffrey Zients, deputy budget director and the government's chief performance officer.
Civil servants still will be eligible for bonuses and promotions to higher pay grades. However, John Berry, the government's personnel chief, said the White House has told federal managers to ensure that bonuses are "truly performance based" amid what he expects to be a declining pool to reward good workers.
Federal employees were scheduled to receive a 1.4 percent across-the-board raise in 2011.
Rochelle Diamond, a program analyst for the Agriculture Department, said that raise would have been insignificant anyway. But on principle, she's mad that Republicans have, in her view, pushed the president to take aim at federal workers. "I look at those Republicans who are forcing his hand, and I think, 'We should be looking at what they make and start there,' " Diamond said.
The move comes amid a festering debate over pay and benefits of federal workers that became an issue on the campaign trail this fall. Congressional Republicans and other critics have said the workforce is being shielded from an economic downturn that has left millions of Americans at private companies facing layoffs and pay cuts.
For months, administration officials and critics have battled over whether federal workers, on average, make more than their private sector counterparts. Government officials defend public-sector pay and say that the way critics have calculated averages is misleading.
Obama froze senior White House officials' pay for a second year and froze all political appointee pay in 2010. Congress voted itself a pay freeze for members in 2011.
Zients said the president announced the salary freeze onMonday ahead of a Tuesday deadline for submitting pay plans to Congress. Obama hopes to avoid a potential fight with the GOP next year on federal pay by promoting the move as a sign of his willingness to work with Republicans, who will take over the House and gain more power in the Senate in January.
The GOP and the leaders of the bipartisan deficit panel have pledged deeper cuts, including furloughs, reductions to bonuses and the size of the workforce, and scaling back retirement pay and the use of contractors.
"It will be hollow if we see a net increase in the federal payroll," Rep. Jason Chaffetz (R-Utah) said of the pay freeze, noting that the government's plans to continue hiring and to hand out bonuses "are not going to reduce the costs to the taxpayers." But Chaffetz, who is slated to head the House subcommittee that oversees federal pay, called the plan "a good start."
White House officials frame the initiative as part of a broader series of moves to reduce the budget deficit. Officials said other strategies, including some that might affect federal workers, would be rolled out when the administration releases its budget proposal next year. "We will evaluate other proposals beyond federal workers, all the different various proposals from the fiscal commission and others, as part of our 2012 budget process and be rolling that out across the next couple of months," Zients said. He called the freeze "the first of many difficult steps ahead."
Federal unions and employee groups criticized Obama, a serious break between organized labor and an administration that has relied heavily its support. Unions cited data from the Bureau of Labor Statistics that suggest the pay gap between federal and private salaries grew last year in favor of the private sector. John Gage, president of the American Federation of Government Employees, called the plan a "superficial, panicked reaction to the deficit commission report."
With rare exceptions, executive branch employees can't bargain over pay. The freeze would not affect Postal Service workers, whose salary is set by contract.
White House officials played down any concern that the proposal would reduce agencies' ability to recruit new talent. "I'm confident . . . that this freeze will not get in the way of our efforts to bring in the best and brightest," Zients said.
Some liberal groups said the freeze won't reduce the deficit or gain Obama the GOP's cooperation. "This is another example of the administration's tendency to bargain with itself rather than Republicans, and in the process reinforces . . . the myth that federal workers are overpaid," said Lawrence Mishel, president of the Economic Policy Institute, a liberal think tank, said.
According to a Washington Post poll last month, 52 percent of Americans say they think federal workers are overpaid, a view held by nearly six in 10 Republicans and about seven in 10 conservatives. Far fewer Democrats, independents, liberals and moderates agreed. Among Americans, one in 10 of those polled say federal workers should be better compensated. Still, of those who have interacted with a federal agency employee, three in four report that the experience was positive.
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FAIRUS.org
FEDERATION FOR AMERICAN IMMIGRATION REFORM
FAIR CHARACTERIZES THE OBAMA, AND LA RAZA DEMS PLAN FOR AMNESTY AS FOLLOWS:
That's why, throughout 2009 FAIR has been tracking every move the administration and Congress has made to undermine our immigration laws, reward illegal aliens and burden taxpayers.
- Foot-dragging on proven methods of immigration law enforcement including border structures and E-Verify.
- Appointment of several illegal alien advocates to important administration posts.
- Watering down of the 287(g) program to limit local law in their own jurisdictions.
- Health care reform that mandates a “public option” for newly-arrived legal immigrants as well as illegal aliens.
* MEXICANOCCUPATION.blogspot.com
OBAMA’S CONTEMPT FOR THIS NATION’S SECURITY, BORDERS AND PEOPLE on behalf of his LA RAZA “THE RACE” VOTERS
Sen. Jeff Sessions, R-AL, said it appeared the Obama administration is "nullifying existing law" and suggested Morton may not be the right person for his post if he fails to enforce federal immigration law.
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