By SCOTT AMEY
Compensation was a hot topic this week--here's a recap of the biggest developments:
Monday: The Congressional Budget Office (CBO) released a study that found that federal employees, on average, are paid 16 percent more than employees in the private sector with the same education.
Tuesday: The White House blogged that the contractor executive compensation cap of $693,951 should be reduced to a "level on par with what the Government pays its own executives – approximately $200,000."
You might recall that in 2011, the FY 2012 National Defense Authorization Act (H.R. 1540) included a provision that extended the reimbursable compensation cap to all defense contractors (with a large loophole for top-talented scientists and engineers that is ripe for abuse). This might sound good, however the cap is expected to jump to approximately $750,000 (see p. 21) in 2012. Although, one might question that cap because it was based on “commercially available surveys of executive compensation,” which included the “5 most highly compensated employees in management position.” With the new cap applying to defense contractor employees, it seems top-heavy to use the old formula.
So what would it look like if everyone's worst case scenario comes about? Angry government employees will flee or be forced out of the government, only to be replaced by more expensive, mediocre contractors who will be barely able to feed their children or send them to college. As a result, jobs will be lost, money will be wasted, contractors will shun government work, programs will suffer, and the remaining unhappy or inadequate blended workforce will be working on Uncle Sam’s most innovative and cutting edge programs. Stay tuned!
Punxsutawney Phil predicted six more weeks of winter, but around DC is it going to remain hot.
Scott Amey is POGO's General Counsel.
Image of Johan Christian Claussen Dahl landscape via Wikimedia Commons.