Trump is cancelling pay raises for US federal workers because it would cost the government $25bn next year. The GOP tax law is going to cost the government 8 times that much in 2019.

Alex Wong/Getty ImagesPresident Donald Trump

  • President Donald Trump announced that most civilian federal workers will not receive pay raises in 2019, saying he made the move because of fiscal constraints.
  • Trump said the pay raises would cost the federal government $US25 billion, and cancelling the raises will “put our nation on a fiscally sustainable course.”
  • At the same time, the tax reform law passed by Trump and Republicans in Congress is projected to add $US190 billion to the federal deficit in 2019.

Most federal civilian employees won’t be getting a pay raise in 2019 following a declaration from President Donald Trump.

Trump cited the cost of the raises, $US25 billion, as reason for the cancellation.

“We must maintain efforts to put our nation on a fiscally sustainable course, and federal agency budgets cannot sustain such increases,” Trump said in a letter to House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell.

There may be some pay raises on a performance basis, but across-the-board increases won’t happen, Trump said.

“In light of our nation’s fiscal situation, federal employee pay must be performance-based, and aligned strategically toward recruiting, retaining, and rewarding high-performing Federal employees and those with critical skill sets,” Trump wrote. “Across-the-board pay increases and locality pay increases, in particular, have long-term fixed costs, yet fail to address existing pay disparities or target mission critical recruitment and retention goals.”

According to a report from the Congressional Budget Office (CBO), the tax reform law touted by Trump and passed by the GOP will add $US1.9 trillion to the federal deficit over the next 10 years, including reduced revenues and debt service payments. That means the law is adding about $US190 billion a year to the deficit.

The CBO also estimated that due in part to the tax law, the annual US federal deficit would exceed $US1 trillion by 2019.

Additionally, the White House’s Office of Management and Budget projected that the tax bill will add $US230 billion to the federal deficit in 2019 – almost 10 times the cost of the canceled raises.

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