Government employees are bracing for news of an upcoming debt deal. Regardless of what happens in the next few weeks, their lives are about to change.
And not in a good way.
No matter what Congress and President Obama agree to in the final days leading up to the August 2nd debt ceiling deadline, federal workers will take a hit, The Washington Post reports.
Post columnist Joe Davidson broke down each likely scenario, and any way you cut it—a default, the Gang of Six compromise, Cut, Cap and Balance—the feds will be forced to make major sacrifices.
Let's look at some of the options: If Congress completely fails to raise the debt limit, the Treasury Department won't have the cash on hand to meet at least 40 percent of its payment obligations. That could easily leave federal workers in the lurch.
"The pain will be particularly severe if House Republicans prevent a debt ceiling agreement by continuing to say no to any compromise involving increased tax revenue," Davidson writes.
If, for instance, the Gang of Six plan to cut trillions over ten years ever sees the light of day, Davidson reports that would likely extend the pay freeze for federal workers. The plan would cut 300,000 government jobs over the next decade. Even in the "best case" scenario, he adds, a long-term deal will drastically increase the amount federal workers pay into retirement.
That's not necessarily a bad thing, some budget analysts (who don't work for the federal government) say. Despite the pay freeze, federal pay rates have risen dramatically over the past few years, outpacing the private sector by thousands of dollars.
A USA Today review last year found that federal workers earned an average of "$67,691 in 2008 for occupations that exist both in government and the private sector." When you add benefits into the equation, the gap widens even more. Federal employees received an average of $40,785 in benefit compensation in 2008 compared to $9,882 for non-government employees.
If the pace of debt negotiations are any indicator, that all could change very quickly.