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Why Obama is taking a pay cut

In solidarity with the federal employees receiving reductions in pay as a result of the sequester, the president has opted to return 5 percent of his salary to the government this year. Defense Secretary Chuck Hagel will also return a portion of his salary. 

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President Barack Obama speaks at the Denver Police Academy in Denver, Wednesday, April 3, 2013. He plans to give back 5 percent of his paycheck in solidarity to the federal employees affected by the sequester.

AP Photo/Susan Walsh

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President Barack Obama plans to give back 5 percent 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.

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Obama earns $400,000 a year. The official said the president decided on the 5-percent reduction, which would total $20,000, because it would be similar to the level of cuts to non-defense government agencies.

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Defense and non-defense 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 Defense Department official said he would return part of his salary in an amount equal to pay lost by civilian employees.

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

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, 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.

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