CBO Sets the Record Straight on Federal Pay

Jason Richwine / James Sherk / January 31, 2012

The Congressional Budget Office (CBO) released a report yesterday showing that federal employees receive substantially more compensation than similarly skilled workers in the private sector. National media, from The New York Times to National Public Radio, reported this “news.”

The CBO report was spurred in part by two years of work conducted by The Heritage Foundation and the American Enterprise Institute (AEI) on federal compensation. We have repeatedly argued that the average federal employee makes more than similar private-sector workers and that Congress can cut costs by reducing this premium. Last year we testified before Congress to that effect.

While CBO’s work is not perfect in our view, and some differences between us remain, both CBO’s methodology and its conclusions are broadly similar to our own.

Regrettably, many critics on the left harshly dismissed our findings, arguing that Heritage’s work could not be trusted. These critics are now, by extension, critics of the CBO’s conclusions.

For example, Office of Personnel Management Director John Berry described our work as “a misinformation campaign.” The National Federation of Federal Employees called it “lies.” “Scapegoating” was the preferred term of the International Federation of Professional and Technical Engineers.

Colleen Kelley of the National Treasury Employees Union said that Heritage and AEI put forth “self-serving, self-created data.” ThinkProgress declared that our work was “littered with errors.” Economic Policy Institute President Lawrence Mishel said that the idea that federal workers are overpaid is “a conservative myth.”

We could go on and on. And all of these bad words were used about research that simply followed the example set by 30 years of academic literature!

The CBO is not the final word on an issue. As we noted, some differences between our approaches exist, and we will discuss them in an upcoming WebMemo. Heritage’s prior critics, however, must now either redirect their same harsh invective at the CBO or—much better—acknowledge the validity of our conclusions.