Obama cutting own pay in solidarity with federal workers

WASHINGTON (REUTERS) - President Barack Obama plans to give back 5 per cent of his pay in a gesture of solidarity with government workers who must take unpaid leave as a result of deep spending cuts that went into effect last month.

The president's self-imposed pay cut would be effective from March 1, when the spending cuts began, and would last through the end of December, an administration official said on Wednesday.

Mr Obama earns US$400,000 (S$495,000) a year. The official said the president decided on the 5 per cent reduction, which would total US$20,000, because it would be similar to the level of cuts to non-defence government agencies.

Defence and non-defence discretionary spending has shrunk across the board as a result of reductions under a process known as sequestration. To maintain critical functions, many agencies are making workers take unpaid leave, or furloughs.

The president's gesture comes after the top Defence Department official said he would return part of his salary in an amount equal to pay lost by civilian employees.

Defence Secretary Chuck Hagel will give back the equivalent of 14 days worth of pay to the government, about US$10,750, his spokesman said on Tuesday.

Mr Obama's decision was first reported by The New York Times.

Sequestration was originally designed as an outcome so harsh that budget negotiators would find another way to narrow trillion-dollar deficits.

However, Mr Obama would not back away from his insistence that any spending cuts be paid for in part by higher tax revenues, while Republicans, who had conceded higher tax rates on the rich in budget deal in January, refused to agree to any tax hikes.

The US$85 billion in overall cuts went into effect after the two sides reached impasse.