Under current law, federal employees were set to receive a 2.1 percent across-the-board pay increase as well as location-based increases beginning on January 1, 2019, but Trump said he is eliminating those raises and wants performance-based pay implemented for federal civilian workers.
"We must maintain efforts to put our nation on a fiscally sustainable course, and federal agency budgets can not sustain such increases", Trump said.
Mr. Trump informed House and Senate leaders in a letter sent Thursday.
"We can not balance the budget on the backs of our federal employees and I will work with my House and Senate colleagues to keep the pay increase in our appropriations measures that we vote on in September", she continued.
Trump said he was nixing a 2.1 percent across-the-board raise for most workers as well as separate locality pay increases averaging 25.7 percent.
Congress could effectively override Trump's decision by including a pay raise in a spending bill, as long as the president signed the measure into law. States Trump won in 2016 - including Florida, Pennsylvania and OH - also rank high on the list of states where federal employees work.
Trump's decision does not affect pay for military personnel; instead, US troops are due a 2.6 percent pay increase next year.
It's not clear how much money the pay freeze would save.
Trump's 2019 budget proposal, released earlier this year, included a pay freeze for civilian federal workers.
"Accordingly, I have determined that it is appropriate to exercise my authority to set alternative across-the-board and locality pay adjustments for 2019".
President Trump wrote Thursday that federal agency budgets could not sustain a planned pay increase for most civilian employees.
He said the 1.9 percent pay increase would "help prevent workers from falling further behind next year and help federal agencies recruit and retain the high-caliber workforce that the public expects and deserves".
It is a harsh indictment of President Trump's values that he is freezing workers' pay to offset his multi-billion-dollar tax cuts for millionaires and billionaires.
Trump also said federal employees' compensation should be performance-based as opposed to automatic. "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".