Obama's 2014 budget called for limits on all contractors, including a $400,000 -- the salary of the U.S. president -- limit for top contractor executives.
The House Armed Services Committee is to take up a 2014 National Defense Authorization bill next week and plans to debate compensation limits for defense contractors, The Hill reported Friday.
Unions representing federal workers have sought lower caps, arguing they would help reduce the budget deficit and ease pressure on the government to lay off full-time employees.
"Tying the cap to the president's salary provides a reasonable level of compensation for high value federal contractors while ensuring taxpayers are not saddled with paying excessive compensation costs," Office of Management and Budget procurement administrator Joe Jordan said in an OMB blog.
However, the Professional Service Council opposes the legislation. PSC President Stan Soloway told The Hill Thursday the proposal would hurt the government, particularly in the high-tech sector.
He said the group is open to freezing the cap at $950,000 and examining the formula for future increases.
"If you follow compensation rates at billion-dollar companies or large non-profits you know that is not exorbitant," he said.
Selecting the president's salary is "arbitrary" and that total compensation including benefits doesn't represent an "apples-to-apples comparison" to the president's salary.
In his blog, Jordan said the cap only would limit "the how much the government will reimburse the contractors for the services of those executives," which Soloway said is a false distinction.
Rosie O'Donnell unveils nearly 50-pound weight loss
Iranian woman stops the execution of son's killer