September 1, 2009 10:37AM # Obama to Seek Cap on Federal Pay Raises --- SHARE *USA Today* [reports](http://www.usatoday.com/news/washington/2009-08-31-cola_N.htm?csp=34) that President Obama is seeking a cap on federal pay raises: > President Obama urged Congress Monday to limit cost-of-living pay raises to 2% for 1.3 million federal employees in 2010, extending an income squeeze that has hit private workers and threatens Social Security recipients and even 401(k) investors. > > > …The president’s action comes when consumer prices have fallen 2.1% in the 12 months ending in July, because of a massive drop in energy prices. **The recession has taken an even tougher toll on private-sector wages, which rose only 1.5% for the year ended in June — the lowest increase since the government started keeping track in 1980.** Private-sector workers also have been subject to widespread layoffs and furloughs. Last week, economist Chris Edwards [discussed](https://www.cato.org/2009/08/24/federal-pay-continues-rapid-ascent/) data from the Bureau of Economic research that revealed the large gap between the average pay of federal employees and private workers. His [call to freeze federal pay](http://www.usatoday.com/news/washington/2009-08-31-cola_N.htm?csp=34) “for a year or two” received attention and criticism, ([FedSmith](http://www.fedsmith.com/article/2098/federal-pay-gap-private-sector-growing.html), [GovExec](http://blogs.govexec.com/fedblog/2009/08/its_august.php), [Federal Times](http://www.federaltimes.com/federal-times-blog/2009/08/25/overpaid-feds/), [Matt Yglesias](http://yglesias.thinkprogress.org/archives/2009/08/are-government-workers-overpaid.php), [Conor Clarke](http://correspondents.theatlantic.com/conor_clarke/2009/08/why_do_federal_workers_make_so_much_money.php)) to which he has [responded. ](https://www.cato.org/2009/08/26/federal-pay-response-to-the-critics/) As [explained](http://www.youtube.com/watch?v=Myo6dqSp8EE) on CNN earlier this year, the pay gap between federal and private workers has been widening for some time now: ##### Related Tags [Government and Politics](https://www.cato.org/government-politics), [Tax and Budget Policy](https://www.cato.org/tax-budget-policy) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).