The Drive for Federal Efficiency

Happy Easter to all! *** Downsizing of the federal government occurred under Vice President Gore in the mid-1990’s. This was a Democratic administration that was willing to get tough on crime, bring efficiency to government, and “end welfare as we know it”. Washington, DC does not remember this downsizing. In fact, the city flourished and rejuvenated as federal agencies moved out of untaxed federal real estate and into leased office space; and income-constrained federal employees moved into contracting roles with generous payscales. In that era, the economy as a whole was bifurcated. In the Old Economy were massive corporations with significant physical assets (airlines, utilities, and manufacturers), often unionized, with administrative bloat worthy of the “railroad era”, as one business author put it. In the New Economy were nimble, fast-growing companies, that encouraged employee ownership and initiative (and not in a passive, DRIP-shares kind of way). Many of these businesses were in finance, technology applications, and retail. The federal government, which swelled in size during the 1960’s, was a creature of the Old Economy. Many federal employees, hired prior to 1983, were enrolled in defined-benefit pension plans. Federal job titles were, to a greater extent than today, were highly siloized; cross functional training didn’t exist then. Great Society initiatives had put large numbers of scientists, analysts and other thinkers on the federal payroll, employees whose job performance was hard to evaluate on a year-to-year basis, and whose productivity was just as difficult to ascertain. Under Al Gore’s scalpel, great efficiencies could be achieved. The cost of Research and Development, and the endless count of federal studies could be quantified by issuing contracts instead of paying general-scale (GS) employees to scintillate on topics of interest. The Federal Government hired smarter. President Obama’s “insourcing” drive during the Great Recession focused on hiring recent graduates, who had difficulty finding private-sector employment. In comparison to “career” feds, they were inexpensive and generally motivated. One thing that did not change was the bureaucracy involved in agency-based grants to the various states. Attorneys and compliance specialists were required both on the giving and receiving sides, and often at the local level, too. These stipulations applied even for miniscule grants of $20,000 or less. Indeed, the bureaucracy- the gap between Congressional appropriations and the funds being used to move dirt, was more stifling in more austere budgetary environments. Witness the number of smaller private colleges opting out of federal student loan programs; in addition to philosophical differences over issues such as Title IX, it was no longer cost-effective to accept federal money. The truth of “inefficient” federal employees got spun into “lazy” feds by politicians unhappy with the strings attached to their hometown grants, such as DEI requirements. Remember the author who criticized corporate bloat? One of his recommendations was to trust but verify; approve the travel vouchers and purchase requests, then let the audit process catch errors. Few politicians want to turn off the spigot of federal funds issued by the agencies in downtown DC. They just want to cut out the middlemen. Let’s retool those middlemen for new careers in the states (as New York, Maryland, and Virginia are encouraging) or in the charitable foundations of billionaires who benefit from this federal efficiency drive.