What the next round of federal cuts should look like
Federal employees are kidding themselves if they believe that President Barack Obama's two-year pay freeze is the last of the cuts in what they're paid and how they work.
Obama and Congress have created a freeze with more holes than a piece of Swiss cheese--meaning it will soon require additional, more significant measures to create real savings. Although many federal employees will be hit by this initial freeze, particularly if they are new to their jobs, a substantial number will actually get higher pay as the byzantine personnel system automatically moves them up and across the 15-level, 10-step pay system.
And ever was it thus. Past pay freezes have saved little money, while injecting enormous uncertainty into the hiring process and undermining morale among the many federal employees who show up every day to make a difference. Pay freezes have also have produced more than their share of grade creep. Managers are sentient human beings after all--if they want to keep valued employees, they often promote them into higher layers. And if they want to keep their employees happy, they can always create new supervisory positions, spread bonuses equally across all employees, and let time work its will. Obama and Congress did nothing to prevent these maneuvers.
The new House majority knows it. They know that the freeze is mostly symbolic, and have already announced a series of proposals for banning end-runs. Federal employees will no doubt come under a much tougher freeze within months.
More significantly, Republicans are working on proposals to reduce federal employment from 2.1 million to 1.8 million. Already endorsed by the Simpson-Bowles deficit commission, the job cut would use a "2 for 3" formula to wield the ax. Under this attrition-based strategy, for every three employees to leave government, only two would arrive. Republicans are also talking about halving employee vacation time, imposing an across-the-board pay cut and raising health insurance co-pays.
However, these aren't golden solutions either. The "2 for 3" approach is particularly short sighted. It would decimate the federal government's front lines where attrition is highest. Senior employees have a well-documented history of staying put during economic downturns. As the Partnership for Public Service recently reported, most exits come at the entry level where turnover in the first two years of service is currently more than 20 percent.
The result of this random-shooting downsizing is obvious. There will be fewer inspectors on the oil platforms and bridges; fewer at the meatpacking plants, pharmaceutical companies, construction sites and toxic waste dumps; and fewer in the workplace.
There will also be fewer auditors at the Internal Revenue Service, nurses at the Veterans hospitals, claims specialists at the Social Security Administration, regulators at the Securities and Exchange Commission, researchers at the National Institutes of Health and Centers for Disease Control, truth-tellers at federal Offices of Inspector General, and on and on. Pay freezes and hiring cuts work their will at exactly the wrong levels of government.
This is no way to achieve a more accountable, effective and productive government. It is also an affront to the faithful execution of the laws.
There is a much more effective way to achieve durable personnel savings. Instead of using blunt instruments, Congress and the president could harvest every vacant position for further evaluation. They could force agencies to pull the vacancies up to the federal Office of Personnel Management for review, and provide the authority to eliminate the least important posts.
Finally, they could create a presumption in favor of filling every front-line vacancy possible. The most important jobs are on the front lines where services are delivered, regulations are made and oversight takes place, while the least important are toward the top where information and complaints disappear, and micromanagement reigns supreme.
Congress and the president could easily set a "1 for 2" or even a "0 for 1" formula for cutting the least important jobs, but a "2 for 1" formula for filling front-line vacancies. The total number of federal employees might not change a bit, but the total cost would drop dramatically.
Moreover, federal jobs should not be the only ones subject to such a review. Presidential appointments should be on the block--they often produce the same delays and inefficiency that come from middle- and lower-level micromanagement. And contractor jobs should be subject to the same review.
The problem is that such a deliberative process would require, well, deliberation. Designing the harvesting and review process would take time. But once implemented with full force, and with the baby boomers retiring in droves over the next ten years, this process could work wonders for actually pushing resources down to the bottom of government. Moreover, it would save money. After all, higher-level management jobs are much more expensive than lower-level delivery jobs.
Ultimately, headcount is a useless target for budget cutters. It is not the number of federal employees that matters, but their performance and responsibilities. The federal government needs enough employees to do the right jobs and the resources to do the jobs right. By getting rid of jobs that don't matter or are simply getting in the way of high performance, Congress and the president could actually restore a measure of public confidence that the federal government is spending its money wisely to honor the promises it makes.
December 14, 2010; 9:45 AM ET |
Federal government leadership
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