In addition, a yearly adjustment of paychecks based on the region of the country where a worker is posted - the "locality pay increase" - was due to take effect.
The federal budget deficit has grown 16 percent this fiscal year, the result of a combination of Trump-supported tax cuts and military spending, as well as increases in mandatory spending programs like Social Security, Medicare and Medicaid.
But Trump's pay freeze comes even as he touts a booming economy.
Federal unions also pushed back against the pay freeze, and presidents of both the American Federation of Government Employees and the National Treasury Employees Union urged Congress to uphold the pay raise. Mark Warner, D-Va., called it "the latest attack in the Trump Administration's war on federal employees".
Among the factors the president can consider: economic growth, unemployment, various measures of inflation and the budget deficit.
"They have already endured years of little to no increases and their paychecks can not stretch any further as education, health care costs, gas and other goods continue to get more expensive", added Tony Reardon, national president of the National Treasury Employees Union.
In July, the House effectively approved the proposal, although the Senate later passed a bill that includes a salary increase. "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 said.
Trump put the cost of the raises associated with high-cost areas at $25 billion.
Congress can override the president's pay freeze through legislation. Accordingly, I have determined that it is appropriate to exercise my authority to set alternative across-the-board and locality pay adjustments for 2019 pursuant to 5 U.S.C. 5303 (b) and 5304a.
While Trump has yet to propose reducing spending on big-ticket items such as defense or entitlements, he is trying to trim the decicit by changing how federal employees are paid. "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". Now neither of those hikes will take effect.
"The president estimates that the 2019 federal employee pay raise he's scrapping would've cost $25 billion".
Trump is not anxious about the effect of freezing federal pay on the government's ability to be successful in "recruiting, retaining and rewarding high-performing Federal employees and those with critical skill sets".