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Washington, D.C.—The National Treasury Employees Union (NTEU) has joined in a letter to Senate and House Financial Services Subcommittee leaders strongly supporting a lowering of the cap on the maximum allowable compensation paid by the government to non-Department of Defense contract employees.

At present, the cap is $763,029; the letter supports a reduction to $400,000 as called for in the Senate’s version of the fiscal 2013 Financial Services Appropriations Bill (S. 3301). NTEU President Colleen M. Kelley has been a leader in the effort to lower the cap.

“While private sector companies can pay their employees whatever they believe those employees are worth,” President Kelley said, “there is simply no supportable rationale to have taxpayers pay this exorbitant sum.”

S. 3301 would both lower the cap and extend it to virtually all contractor employees; currently government contractors can charge taxpayers almost $765,000 for the salaries of their top five most senior employees, more than double what it was in 1998. Employees of government contractors outside of the top five can and do earn taxpayer-funded amounts in excess of the current benchmark.

Along with NTEU, the letter was signed by other federal union leaders and officials of various public interest groups. It was sent to Sen. Richard Durbin (D-Ill.) and Sen. Jerry Moran (R-Kan.), chair and ranking member of the Senate Financial Services Appropriations Subcommittee; and Reps. JoAnn Emerson (R-Mo.) and Jose Serrano (D-N.Y.), chair and ranking member of the House Financial Services Appropriations Subcommittee.

In the letter, coalition members wrote that with budget cuts and sequestration looming, “It is fiscally irresponsible to allow private contractors to charge escalating and exorbitant rates to the government.” They added that not only has the compensation cap on government contracts more than doubled since 1998, the increase over the past dozen years in allowable government compensation to contractors has outpaced inflation by 53 percent.

The savings from lowering the cap are estimated to total at least $5 billion a year, nearly 10 percent of the $55 billion budget reduction required by the Budget Control Act.

The coalition pointed out that the increase authorized by the Office of Federal Procurement Policy in April 2012 alone represented a 10 percent increase in allowable compensation for contractors, while military personnel—“the brave men and women actually risking their lives in defense of our nation”—saw an increase of less than 2 percent and the pay of other federal employees was frozen.

The writers urged lawmakers to ensure the final version of the fiscal 2013 financial services appropriations bill includes this reduction in the maximum allowable compensation for contractor employees. “It is grossly unfair to expect working people to pay for inflated salaries for contractor employees,” they wrote.

NTEU is the largest independent federal union, representing 150,000 employees in 31 agencies and departments.