Reagan Freezes Salaries of White-Collar U.S. Workers : Decides Against 5% Cut

President Reagan today froze salaries of federal white-collar employees at their present levels for the fiscal year beginning Oct. 1, in line with the budget adopted by Congress.

Reagan originally had proposed a reduction of 5%.

The office of the federal pay agent, which is required by law to compare federal pay with that in the private sector, said it would take a 19.15% increase to bring federal employees up to the pay of comparable workers in private employment.

White House spokesman Larry Speakes said this would have added $20.6 billion to the federal deficit.

The President’s Advisory Committee on Federal Pay recommended an increase of 4.7%.

White collar federal workers got a 3.5% raise last year.

The President announced his decision in favor of a freeze in a message to Congress.

In his message, Reagan said he was freezing salaries based on “economic conditions affecting the general welfare.”

Speakes said the President’s determination could be changed only if it were overridden by both houses of Congress.

Administration and congressional officials had been talking since last year about the need to hold down federal pay to help cut the deficit, and the President’s action freezing salaries had been expected.