Study Calls for Fed Worker Pay Cutbacks

May 18, 2006 ( - A Washington, DC-based libertarian think tank has called for lawmakers to freeze the pay and limit the benefits given to federal workers to help slash the federal deficit.

In its report, Federal Pay Outpaces Private-Sector Pay. The Cato Institute said there was room for those cutbacks since, by 2004, average federal worker compensation was almost twice that seen in the private sector, Reuters reported.

Citing Bureau of Economic Analysis data, the Cato research pegged the average federal worker wages and benefits in 2004 at $100,178, compared to the private sector figure of $51,876. Wages and benefits for the federal government’s 1.9 million civilian workers in the executive branch costs almost $200 billion annually

Chris Edwards, Cato director of Tax Policy, also noted that the federal government currently offers both a traditional defined benefit pension plan and a 401K program and questioned whether it needed both. “A lot of comparisons of private and public pay often don’t look at the benefit structure and the benefit structure is exceptional,” Edwards told Reuters.

In addition to the compensation cutbacks, Edwards also suggested that the government move to the private sector the 100,000 jobs now held by federal workers expected to retire. He said that would allow departments to shrink in size without incurring extra costs from layoffs or buyouts.

He said workers’ skills were more likely to be put to best use within the private sector than they would be in an ever-growing government sector.

The report is here .