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  • CBO Sets the Record Straight on Federal Pay

    The Congressional Budget Office (CBO) released a report yesterday showing that federal employees receive substantially more compensation than similarly skilled workers in the private sector. National media, from The New York Times to National Public Radio, reported this “news.”

    The CBO report was spurred in part by two years of work conducted by The Heritage Foundation and the American Enterprise Institute (AEI) on federal compensation. We have repeatedly argued that the average federal employee makes more than similar private-sector workers and that Congress can cut costs by reducing this premium. Last year we testified before Congress to that effect.

    While CBO’s work is not perfect in our view, and some differences between us remain, both CBO’s methodology and its conclusions are broadly similar to our own.

    Regrettably, many critics on the left harshly dismissed our findings, arguing that Heritage’s work could not be trusted. These critics are now, by extension, critics of the CBO’s conclusions.

    For example, Office of Personnel Management Director John Berry described our work as “a misinformation campaign.” The National Federation of Federal Employees called it “lies.” “Scapegoating” was the preferred term of the International Federation of Professional and Technical Engineers.

    Colleen Kelley of the National Treasury Employees Union said that Heritage and AEI put forth “self-serving, self-created data.” ThinkProgress declared that our work was “littered with errors.” Economic Policy Institute President Lawrence Mishel said that the idea that federal workers are overpaid is “a conservative myth.”

    We could go on and on. And all of these bad words were used about research that simply followed the example set by 30 years of academic literature!

    The CBO is not the final word on an issue. As we noted, some differences between our approaches exist, and we will discuss them in an upcoming WebMemo. Heritage’s prior critics, however, must now either redirect their same harsh invective at the CBO or—much better—acknowledge the validity of our conclusions.

    Posted in Economics [slideshow_deploy]

    One Response to CBO Sets the Record Straight on Federal Pay

    1. Pragmatic says:

      Interesting. This is a much better analysis than what has been put forth by Heritage (at least Heritage chooses to promote the wrong talking points, which are easily dismissed as propaganda). I be more interested in hearing more reasons for why this is and some reasonable policy corrections (other than archaic slashes in federal employee pay).

      I think one of you promoted the idea of a job security op-out which would lead to high pay but less job security. That would be interesting to hear more about. I have a feeling that a lot of federal wages become overinflated due to the continued increases in salary and the fact that people never leave.

      I would urge Heritage to take the high road on this as well and avoid scapegoating federal employees and instead focus on the policy issue at hand. It is so disappointing to listen to your "economists" talk trash on federal employees instead of realizing that these are only people responding rationally to the incentives provided to them (just like the rich taking advantage of legal tax loopholes).

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