Obama Calls Again for Capping Government Contractor Pay - the Federal Eye
The Obama administration is renewing its push to cap the pay of government contracting executives as the House prepares to vote on a bill that would freeze federal and congressional salaries.
Certain federal government contracts permit government contracting firms to bill federal agencies up to $693,951 annually for incurred costs, including employee salaries, meaning many contractor executives and some highly-skilled contractors earn more than top-earning federal employees and President Obama. Since 1995, Congress has tied the contractor pay cap to compensation levels for the nation’s top-earning business executives — a figure that has ballooned in the last two decades.
In December, lawmakers voted to expand the cap at most agencies to cover all government contractors, including highly-skilled engineers and scientists that also earn top pay.
But the changes don’t go far enough for Obama, who proposed last fall that the fiscal “supercommittee” cap the amount of money agencies pay to government contracting executives at $200,000, on par with the amount earned by top career federal employees.
The proposal was ignored, and the White House is trying again.
“Taxpayers are being forced to reimburse contractors at a rate which has outpaced the growth of inflation and the wages of most of America’s working families — as well as the growth of federal salaries,” Lesley Field, the acting White House official for government contracting, said in a White House statement and blog post set for publication Tuesday.
“Just as the Government must be prudent in paying its employees, it must also not overpay contractors,” Field added, noting that Obama’s proposal does not limit how much contractors pay their top earners — only how much agencies would reimburse them.
White House officials said their renewed push on the cap comes as the Office of Management and Budget prepares to raise it to nearly $750,000 in the coming weeks, in line with the congressional mandate to maintain parity with the private sector. Raising the cap would not be necessary if lawmakers vote to cap executive compensation in the next few weeks, the officials said.
Officials stressed the push is not tied to Republican plans to vote Wednesday on a bill capping federal salaries. Ahead of the vote, House Republicans released a new Congressional Budget Office report Monday that concluded that the federal government pays slightly more in average wages and significantly more in benefits than the private sector.