Federal Worker Pay Freeze | featured news

President Obama told congressional leaders Tuesday that he is extending a two-year pay freeze for federal employees until at least next spring because Congress has not agreed on a budget for the next fiscal year.

The House is scheduled to vote Wednesday on a new bill that would freeze the salaries of federal employees, lawmakers and congressional staffers for another year.

The proposal would pay for extending a payroll tax holiday and unemployment benefits in part through changes to Medicare and a pay freeze for federal workers.

President Barack Obama will announce a two-year pay freeze for federal employees Monday, a move White House officials say is the first of many difficult decisions that must be made to reduce the nation's mounting deficit.