Government Bonuses

Federal Employees Rake in Millions in Added Pay and Bonuses

On top of competitive salaries and benefits, federal employees are eligible for millions of dollars in bonuses. Daniel Stone reports on whether the perk has gotten out of control.

06.06.12 8:45 AM ET

The list of perks for government employees can be long. They enjoy competitive pay relative to their field and top-shelf benefits. Unchallenged by a competitive industry and unmotivated by a bottom line, federal workers often work fewer hours. And Uncle Sam’s rate of job security is considered stunningly high; employees have a higher likelihood of dying on the job than of being fired.

Add to the list performance bonuses for a job well done. Or in some cases, just for doing one’s job.

Long fixtures of the private sector, end-of-year bonuses have the power to incentivize efficiency or workplace innovation. But federal records show that bonuses are an added benefit for many government employees. And the standards for receiving the boost in pay have in some agencies been reduced over time.

Last year, the federal government awarded $439 million in bonuses to employees across every executive agency. Many of the checks come in the amount of several hundred dollars, according to data from the Asbury Park Press. But some government workers have collected tens of thousands of dollars. The Department of Veterans Affairs last year paid three top officials more than $32,000 on top of their base salary of $160,000, $174,000, and $180,000, respectively. A senior engineer with the Department of Homeland Security received $57,163, more than a third of his annual salary. Each of the two agencies handed out more than $61 million in bonuses internally.

There are two classes of government bonuses. Executive bonuses go to top agency officials who might otherwise find more competitive compensation in the private sector. The other kind goes to civil servants and tends to be more modest. Executive incentives have defenders around Washington, including the Senior Executives Association, an interest group representing many top government officials.

But the later kind are the type that The Washington Post and Sen. Claire McCaskill (D-Mo.) have focused on this week, specifically targeting the General Services Administration. The agency has given its employees more than $10 million in bonuses over the past few years. More than $1 million of that money went to embattled employees who were part of the agency scandal last month involving expensive government conferences. Some resigned in the wake of the allegations.

“Missouri families who don’t have the luxury of getting multiple bonuses every year would be outraged at the way this agency is spending taxpayer dollars,” said McCaskill in a statement. The senator began investigating government bonuses at GSA in 2010 and ramped up her inquiry after the agency’s questionable behavior was brought to light.

The spendthrift Heritage Foundation, known for its conservative advocacy, doesn’t see federal bonuses as inherently bad. They can sometimes be a great use of money, says Heritage senior economist James Sherk. “There’s a very good reason to have bonuses,” he says. “We should shift the distribution of pay less toward the base pay and more toward bonuses. You want the flexibility to give top performances a boost in their pay to improve the efficiency. But you don’t want to have high base pay for everyone.”

The Office of Management and Budget defends the use of bonuses. Moira Mack, a senior spokeswoman with OMB, an arm of the White House, says they offer the government the “flexibility to incentivize excellence and productivity in a targeted way.” But the public doesn’t always get to know just what work is being rewarded. Many of the reasons behind the pay bumps—$33,000 to an unnamed Department of Justice official last year, for instance—are not disclosed publicly.

Cognizant of frustration at Washington over government spending levels, President Obama has confronted bonuses, reducing the awards by $43 million since 2010 and eliminating entirely bonuses for political appointees. The White House also set a cap to reduce spending on awards for career staff, saying the effort has saved $200 million in taxpayer money.

Still, some spending watchdogs think the qualifications should be even higher, including stricter oversight of the bonus program to ensure the money isn’t simply a salary supplement. Says Leslie Paige, an analyst and spokesperson for the Washington-based Citizens Against Government Waste: “During the kind of profound and worsening fiscal crisis we are experiencing at the moment, no bonuses should be awarded unless they are directly related to shrinking the cost of government and delivering visible, quantifiable cost savings to taxpayers.”